Luxury home listings can be fun to look at whether you can afford to buy a luxury home or not. But, these days, whether or not you can afford to buy a luxury home may have a lot to do with where you’re looking. In fact, according to a new analysis from the National Association of Realtors’ consumer website, the gap between a luxury home and a typically priced home can be relatively small. Nationally, luxury homes are about three times more expensive than a median-priced home, but that can change from one local market to the next. For example, the luxury market in Orlando is only about twice as expensive, while in parts of Connecticut a luxury home can be five times the price of the area’s median. Anthony Smith, senior economist at the website, says large gaps aren’t necessarily bad. “Big gaps between luxury and typical home prices aren’t automatically a warning sign,” Smith said. “They often point to markets that are highly segmented, where luxury behaves differently from the rest of the housing market. In those places, even small shifts, at the high end can create noticeable changes in luxury pricing without spilling over to the median home price.” (source)
