TAMPA, Fla. — Tampa is leading the nation in luxury home price growth, according to a new Redfin report, highlighting a widening divide between Florida’s high-end housing market and the rest of the market.
According to Refin, luxury home prices nationwide increased 4.7% year over year in May, compared with a 1.5% increase for non-luxury homes. The brokerage says affluent buyers have remained active despite elevated mortgage rates and economic uncertainty because they are generally less sensitive to borrowing costs and are more likely to pay cash or make substantial down payments.
Florida dominated the rankings, with Tampa posting the fastest luxury home price growth in the country, followed by Miami.
For luxury homeowner and developer Joe Ebanks, the demand is easy to see along Pinellas County’s Gulf beaches.
“Life living on the water? It’s beautiful,” Ebanks said. “I got the boat in the backyard, pool right off the water. We hop on the jet skis, ride around to the restaurants, go out to the beach or the barrier islands.”
Ebanks, who develops homes in Redington Beach, said the area’s combination of waterfront living, Florida’s lack of a state income tax and limited beachfront land continues to attract wealthy buyers.
“So you have where the luxury homeowner is moving down here for obviously for no state tax and for the lifestyle,” he said. “As developers we are looking into the long-term growth.”
He said many buyers purchasing multimillion-dollar homes are largely insulated from today’s higher mortgage rates.
“Somebody is buying a two-, three- or five-million-dollar house. They’re not really looking at the interest rates,” Ebanks said. “Most of them pay cash or with a large down payment.”
Ebanks also believes the market changed significantly after Hurricanes Helene and Milton.
He said updated FEMA rebuilding requirements and stricter building standards prompted many longtime homeowners to sell instead of rebuilding flood-damaged homes.
“You’re seeing a lot more luxury development popping up because, on this 27-mile stretch of beach property, lots are scarce,” Ebanks said. “People with money know that.”
In St. Petersburg, developer and house flipper Bruzensky Bois said the luxury market tells only part of the story.
“There’s two different tales that’s going on,” Bois said. “There’s the luxury homes that’s driving the market. People want to live here. The weather’s nice. It’s not as expensive as Miami, but it gives you that Miami feel.”
Bois said many working families continue to struggle because there is not enough “missing middle” housing, such as duplexes, quadplexes and other moderately priced options.
“There’s not enough missing middle housing,” he said. “There needs to be more density … to make it more affordable for the everyday work person.”
While luxury homes continue to appreciate, Redfin says the broader housing market is moving much more slowly, underscoring the affordability challenges facing many buyers as higher borrowing costs continue to weigh on demand.