May 18, 2024

Hello, Saturday! Texas-based reporter Sami Sparber here with a special newsletter edition about our state's million-dollar real estate.

Situational awareness: Megan and Madalyn will be back in your inbox Monday.

Today's newsletter is 571 words β€” a 2-minute read.

1 big thing: Less luxury

A map showing the share of cities with typical home values above $1 million, by U.S. state. Hawaii has the largest share, at 25%. California is second at 21.8%, and New Jersey a distant third at 9.8%. States with the highest share of "$1m cities" tend to be in the West and Northeast.
Data: Zillow; Map: Erin Davis/Axios Visuals

Texas is one of three states in the U.S. with fewer "million-dollar cities" than a year ago, data shows.

Why it matters: Luxury real estate prices are rising elsewhere, largely because the wealthy are best positioned to buy in a market with low inventory and high mortgage rates.

Reality check: Competition is cooler in Texas' major metros, where the stock of homes for sale has bounced back faster than in other parts of the country.

State of play: Typical home values fell below $1 million in Sunset Valley and Volente near Austin, per a recent Zillow report, another sign of the metro's backslide from the pandemic housing boom.

  • Meanwhile, homes in Bellaire, a city within Houston, jumped into luxury territory.

By the numbers: Bellaire is among the 14 Texas cities where homes are typically worth at least $1 million, a tally that's down from 15 a year earlier, per Zillow.

  • Eight of the areas are in Dallas-Fort Worth, led by Westlake and Highland Park.
  • The list also includes three cities in the Austin area, San Antonio's Hill Country Village and Round Top, the antiquing haven tucked between Austin and Houston.

The big picture: Persistent demand for homes outside of downtowns is partly why the number of million-dollar cities nationwide climbed from 491 to 550 in the last year, says Stephanie Anton, a Texas-based president at The Corcoran Group.

  • The other side: Hyperlocal factors like low lake levels in Volente, which is nestled along Lake Travis, can temper housing demand, Anton tells Axios.

What they're saying: "For affluent consumers, real estate isn't just a shelter decision," says Anton, who compares their motivation to buy a new home with purchasing a designer handbag.

  • "It's about signaling who you are" and acquiring something unique.

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2. πŸ‘€ Texas headlines

Illustration: Sarah Grillo/Axios

πŸ€‘ About those rich neighbors: Gen Zers own over 6% of San Antonio's million-dollar homes. (MySA)

  • While that's on par with Austin, Zoomer shares are higher in Houston (15%) and Dallas (10%), per a recent report.

βœ‚οΈ Austin's ultra-luxury home sellers are slashing prices β€” and they're not happy about it. (Wall Street Journal)

  • Nearly 19% of $5 million-plus homes in the metro had their prices cut in March, the highest level in the nation.
  • Many sellers "don't want to let go of the number that they could have had during COVID," a luxury agent tells the outlet.

πŸ‘©β€πŸ³ Still the market: A $12.75 million Memorial mansion with a screened outdoor kitchen ranked among Texas' priciest pads for sale last month. (Houston Chronicle)

🎸 Related-to-famous-Texan news: The widow of ZZ Top's Dusty Hill recently sold a sleek College Station ranch for $6.4 million. (Mansion Global)

🏈 Plus, a luxury brokerage led by the nephew of Dallas Cowboys owner Jerry Jones is expanding into Fort Worth. (Dallas Business Journal)

3. πŸ“¬ Your outlook on homeownership

Illustration: Sarah Grillo/Axios

Heads up β€” we're writing next about Gen Z's homeownership aspirations.

  • Zoomers, what's your take on renting versus buying? Are you saving up for a down payment?
  • Homeowners, what's your advice for first-timers?

Email [email protected] with your name and neighborhood. We may feature your insights in an upcoming newsletter.

Our picks:

🀠 Sami is two-stepping in Fort Worth.

Thanks to our editor Ashley May and copy editor Bill Kole.