South Florida and other Sun Belt locations are joining the upper ranks of places with luxury housing:

Luxury homes in the South Florida metro sold for a median of $4.04 million in October, up 187.3% from a decade ago—more than double the national rise of 82.5%, and the fastest growth of any major metro…

Over the past five years, luxury prices in the metro rose 105%, the second-fastest increase among major U.S. metros and only slightly behind Miami. West Palm Beach has also been the nation’s fastest-growing luxury market for most of the past year, posting the highest annual price growth in nine of the past 12 months…

Eight of the 10 major metros with the fastest growth in luxury home prices since 2015 are in the Sun Belt, reflecting a broader, decade-long shift in where high-end homebuyers are choosing to put down roots.

Following West Palm Beach in the top five are Nashville (+171%), Phoenix (+165.7%), Las Vegas (+161%) and Miami (+148%).

The report cites two factors driving this luxury housing growth: changes related to COVID-19 and remote work plus changes in taxes in coastal states.

I wonder if several other factors are at play:

1. More housing construction in Sun Belt locations than other places. For example, if there is more space available and/or fewer obstacles to building expensive housing in one place compared to another, it could help increase luxury housing.
2. Certain scenes or communities are cool. Could some of this be about wanting to be in up-and-coming places? Are there certain amenities or quality of life options available in these Sun Belt locations that are harder to obtain elsewhere?
3. Even with remote work, personal connections matter. Are certain companies and/or jobs located in the Sun Belt? Could this be about living near certain other wealthy people or particular social networks?
4. Incentives offered by certain locations. We know communities and states give tax breaks to corporations. Are these options available to organizations connected to wealthy residents who then also move? Or are there any incentives for residential construction?

While these luxury housing shifts are underway, it does not sound like any of the traditional centers of the most expensive housing are disappearing soon – they are just not growing as much.