Luxury real estate in Los Angeles booms due to intense demand
Los Angeles topped the list for June’s 10 most expensive home sales, with Paris Hilton’s $63 million purchase of a mansion in Beverly Hills standing out.
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Everyone has a different idea of luxury. Some may see it as a luxury product or high-end service, while others think of it as an occasional splurge, a unique experience, or wellness.
However, there is usually only one definition of luxury in the real estate industry. It is a very expensive and elaborate house. And what was considered expensive has changed dramatically over the past decade.
According to Realtor.com’s recent “What Is Luxury” report, the threshold for what was considered a luxury home was $796,622 in 2016. And nationally, $1 million home listings were just outside the top 5% of homes during this top period and were in the top 10% of homes pre-pandemic.
Now in 2025, the threshold for a luxury home will rise more than 60% to $1.3 million, putting it in the top 10% of the most expensive homes in America, according to the report. Similarly, the top 5% of homes sold nationwide start at $2 million, and the top 1% nationwide start at $5.4 million.
These prices are 2.9 times, 3.6 times, and 12.6 times more expensive, respectively, than the national median listing price of $430,000.
“The $1 million home is still an important benchmark, but it’s not the indicator of luxury housing that it once was across the country and in many markets,” said Daniel Hale, chief economist at Realtor.com. “With or without a seven-figure price tag, luxury often means exclusivity or relative status in the local market. In many areas, luxury homes can fetch many times the price of a typical home in the area. Moreover, with the dramatic rise in home prices, Realtor.com data shows how dramatically the definition of luxury has changed over the past decade.”
The historically expensive New York metropolitan area does not rank in the report’s top 10 percent of areas with the highest starting prices for properties. However, the number of million-dollar properties was the highest in the nation, accounting for 11,980 properties, or 33.7% of all properties in the area.
And here, the top 10% of the most expensive listings had a starting price of $2.89 million.
“Today, $1 million may not be the threshold it once was, but it remains psychologically significant, accounting for the top 13% of homes nationwide. It is also quite prevalent in some metropolitan areas, and has long been synonymous with high-end living,” the report said. “These ‘classic’ luxury markets consistently rank among the highest in terms of million-dollar listings, and entry-level luxury home prices in these markets also reflect that prestige. In these regions, luxury homes are the norm, not the outlier.”
Maddie McGay is a real estate reporter for NorthJersey.com and The Record, covering everything that’s worth celebrating about living in North Jersey. Find her on Instagram @maddiemcgay or X @maddiemcgayy and sign up for the North Jersey Living newsletter. Have a tip, trend, or great home she should know about? Email MMcGay@gannett.com.
