This headline should say it all: “Welcome to the Mansion Economy. $10 Million Is Barely Enough.”
But Barron’s editor Andy Serwer, the author of the financial magazine’s recent post, writes that it was an assessment of San Francisco’s wildly priced housing market that had him “spitting out my coffee.”
What caused him to react was the how the market in a city where a home sold earlier this year for $56 million — and another in a neighboring community just went for $70 million — was described by Sotheby’s real estate agent Annie Williams to the San Francisco Standard in April.
Wanted: More ‘big, beautiful houses with views’
“As Marie Antoinette as this sounds, there really is a housing crisis at the upper end — a mansion shortage,” Williams told the news outlet. “Just as there’s a housing shortage for affordable housing, there are not enough big, beautiful houses with views for the demand that exists.”
The high-end real estate market isn’t confined to San Francisco, of course, although the Bay Area city seen only a few years ago as on the decline is now struggling to keep up with the demand for homes carrying eight-figure price tags thanks to the artificial intelligence boom.
Tuesday, National Public Radio reported San Francisco’s luxury market is so competitive that “even all-cash offers of $25 million and more have gotten outbid,” a situation local real estate agent Paul Kitchen called laughable “just because it is so ridiculous and so beyond the pale.”
In a market with a median home price of more than $1.7 million, Kitchen told NPR that a 1,600-square-foot, three-bedroom condo priced at $2 million is a steal for what’s considered an entry-level property purchase for families.
A common sense shortage?
Fifteen years ago, just three homes in the U.S. sold for over $50 million, Barron’s reported, citing a count by Jonathan Miller, a longtime real estate analyst and director of markets for StreetMatrix, a company that tracks home prices.
“Now we’re getting $100 million and some $200 million homes,” Miller told the magazine, with 45 homes selling above the $50 million mark nationwide last year. “Ten-million-dollar sales are a dime a dozen.”
Not quite. There were just over 1,600 homes sold for $10 million or more last year in the nation’s Top 10 “ultraluxury” markets, around $28.6 billion in sales, Barron’s noted, citing the real estate brokerage Compass.
The billionaire founder of Rockstar Energy made headlines in 2022 for breaking the record for Utah’s most expensive home sale when he bought a 17,567-square-foot mansion on a Park City ski slope for $39.6 million.
Two years later, an even larger mansion in Deer Valley with a private ski gondola “sold in the high $50 million range,” according to The Wall Street Journal. Called “the most expensive house in Utah history” in 2024, the new build was originally listed at $65 million.
While acknowledging the “mansion mania” could be interpreted as a sign of a housing bubble about to burst, Barron’s Serwer concluded that “more to the point, it seems the shortage here may not be so much in mansions as it is in common sense.”