During the COVID-19 pandemic, demand for luxury homes in popular vacation areas, particularly along the coasts, has surged. The newfound ability of many of these wealthiest buyers to work remotely, more baby boomers retiring earlier into their forever homes, and cheap mortgages fueled the rush into some of the most naturally beautiful communities across the nation. A fear of the cities coupled with the desire to spend more time outside as COVID-19 raged on also gave these markets a push…

So what are the hottest luxury real estate markets in the country with some of the most extravagant homes? The Realtor.com data team set out to find them. The most expensive 1% of homes for sale nationally had a median $5.5 million price tag in January—and that was up 16.6% year over year.

“We’ve seen a lot of demand in vacation and second-home spots—particularly on the coastlines, on the beach, lakes, and in the mountains,” says Frank Nothaft, chief economist at CoreLogic, a real estate data firm. He’s seen many affluent Gen Xers and baby boomers buy up real estate in these areas.

“Those who have been very successful, who kept their jobs, and [who] saw the stock market go through the roof cashed out their gains to use that as their down payments to buy a second home,” adds Nothaft.

Over the past two years, many buyers have sought out larger homes with offices and areas for their children to attend school remotely. These homes often cost more than smaller residences, and buyers found they were more willing to move once they weren’t tethered to a physical office.

“People explored these new areas and found they liked them,” says Jenny Lenz, managing director of Dolly Lenz Real Estate, a luxury real estate firm that does business across the country. “Houses are always preferable to condos, especially after COVID. You don’t have to share an elevator or a gym or anything. … [And] water views are always much more desirable than landlocked homes.”

Rock-bottom mortgage interest rates also helped to make luxury home purchases more appealing.

Worth noting: The concept of luxury real estate is somewhat in the eye of the beholder—and the marketplace. A high-end home in parts of the Southeast or Midwest might barely make it as a starter home in the priciest areas of the coasts.

To come up with its rankings, the Realtor.com data team took a look at the nation’s luxury real estate market in January—as well as some of the most mind-blowing properties for sale. Markets were ranked by the number of unique viewers looking at home listings as well as how long properties were on the market. (The faster homes move, the hotter the market.) Only the most expensive 1% of homes in these markets were considered in this ranking, and only prices for this small fraction of homes were provided in the story. Markets typically include the main city and surrounding towns and cities.

So where are the hottest luxury real estate markets with the most jaw-dropping views this year? Read More: https://www.realtor.com/news/trends/live-the-dream-these-are-the-hottest-luxury-real-estate-markets/