Midwest sees rise in local buyers dominating hot luxury housing markets

Midwestern cities are experiencing a surge in their luxury housing markets as local buyers take advantage of urban living at more affordable prices. According to the Wall Street Journal/Realtor.com Housing Market Ranking, St. Louis led the list of the hottest luxury markets in the U.S. for the third quarter, followed by Portland, Maine, and Detroit.

"The main theme is affordable luxury," said Joel Berner, an economist with Realtor.com. "It’s ‘have your cake and eat it too’—have a luxury home in an affordable metro. You get the perks of an upscale neighborhood, without paying Miami and Malibu prices to get it."

The quarterly index evaluates key housing market data alongside economic vitality and lifestyle metrics for 60 active luxury metropolitan areas in the U.S., where luxury is defined as the top 10% of each market.

St. Louis and Detroit share similarities, notably in price. The median listing price for a luxury home was $700,000 in St. Louis and $750,000 in Detroit, significantly below the national average for this segment. Demand from local residents accounts for over 50% of interest in these areas.

Austin Black II, a broker in Detroit, noted increased demand across various types of luxury housing. "In several historic neighborhoods, they’ve seen home sales over $1 million," he said.

Economic growth and robust employment markets are driving investment and optimism among residents in both cities. "More people are seeing that potential in the city," Black added.

Kaffa Abounader from Compass remarked on St. Louis's market dynamics: "The St. Louis market is active, but it’s still a seller’s market."

Environmental factors also play a role as Midwestern metros show resilience against natural disasters compared to coastal markets.

Minneapolis ranked ninth with a median luxury listing price near $1 million.

Southeastern cities like Charlottesville and Atlanta also appeared on the list with significant median listing prices.

Two Utah metros—Salt Lake City and Ogden-Clearfield—saw rising luxury prices last year. Nashville ranked fourth after leading last quarter.