Newer doesn’t always mean better—and that’s why buyers in expensive coastal markets are drawn to heritage properties that offer character and charm. Even if the houses are small.
There is a distinct divide in the luxury housing market: listings in aging coastal metros often skew older and younger, while growing inland communities offer newer, larger homes at lower prices, according to the latest Realtor.com® Luxury Housing Market report.
Some of America’s most prestigious cities, including New York City, Philadelphia, and San Francisco, are synonymous with history-based luxury.
“In these big cities, luxury housing isn’t defined by newly built or master-planned communities, but by mature neighborhoods, older buildings, and homes built decades ago that have maintained land value and scarcity rather than updated,” said Realtor.com’s chief economist. Anthony Smith.
Simply put, some affluent homebuyers place a premium on living in culturally prestigious neighborhoods like New York City and are willing to trade-off size and newness for location—often opting for older, smaller homes at prices comparable to Southwestern mansions.
Nationally, entry-level luxury—defined as the top 10% of the market—starts at $1,193,000, for the median year built in 2003, according to the January 2026 luxury home report from Realtor.com.
The average home in the $1 million to $2 million price range measures 2,931 square feet and spends 92 days on the market.
In most expensive coastal markets, however, the average year build dates to the 1970s to 1990s, and luxury homes average around 1,600 to 2,000 square feet.
“That size gap underscores the big difference in what consumers are paying,” notes Smith. “In these metros, value is driven more by land, neighborhood prominence, and proximity to jobs or waterways than by square footage or new construction.”
The West Coast leads the oldest stock of luxury homes
San Francisco is notable for having the number of oldest luxury homes in the country, with an average year of construction of 1974.
An entry-level home in Golden City in January came in at an asking price of $2,499,000 and waited 78 days for a buyer, which was two weeks faster than the national producer.
Located just 50 miles southeast of the heart of Silicon Valley and populated by a large crowd of tech workers and venture capitalists, San Jose, CA, where the top 10% of listings start at $3.15 million, has the second oldest listing, with a typical home built in 1977.
Alexander Kalareal estate agent based in the San Francisco Bay Area, tells Realtor.com that San Jose’s older luxury housing stock has a strong following among house hunters.
“Many of my buyers in this segment are solid families and upscale buyers who value large lots, mature trees, and wide driveways over new construction, and are comfortable doing selective remodeling to get the modern, open interiors they want,” says Kalla.
“We also see investors and international buyers targeting this estate because they can add value through renovations to properties that are already built and are close to major employers and top schools.”
San Jose’s breakneck sales pace
Perhaps unsurprisingly, the city’s 50- to 60-year-old luxury homes are flying off the market, selling in an average of 19 days last month.
Kalla says this rapid market pace is accompanied by “perfect storms of inventory shortages and deep-pocketed buyers who are not very sensitive to mortgage rates.”
Like other cities with high-demand coastal properties, San Jose has a strong inventory, so every reasonably priced listing that hits the market creates a frenzy among buyers—even in the winter, when most markets are down, according to Smith.
“Additionally, you have local high-income tech and AI professionals whose shares and compensation have rebounded over the past year, so they’re willing to compete for rare, move-in-ready housing in neighborhoods,” Kalla added.
Kalla notes that while consumer demand is strong, the San Jose bottle is a luxury offering.
“Currently, I have many clients who are fully approved and I cannot enter into a contract because there are not enough goods to market,” he said. This place leaves no room for buyers to take their time to make a decision or try to negotiate a discount.
“The best homes tend to sell quickly and for close to list price or more,” adds the agent. “If you wait for the ‘perfect’ deal, you often end up watching the right house go to the best prepared buyer.”
What separates San Jose from other high-end markets, according to Smith, is that the wealth is baked into the broader housing stock rather than concentrated at the top. More than half of all city listings are valued at more than $1 million, nearly five times the national share.
Unlike Sun Belt markets that boast new categories, San Jose’s luxury offerings are the product of decades of development, with a large percentage of innovation dating back to the 1950s and 1960s.
Most properties in the $1 million to $2 million range are small by national standards, highlighting that value is driven less by size and more by location sought by Silicon Valley’s highest-income households.
“High-end buyers can live in neighborhoods with large backyards and top-ranked schools while being a short drive to major campuses and downtown job centers, a rare combination even in California,” Kalla said.
Some prominent legacy markets
On the East Coast, New York City ranks among the oldest luxury markets, with prices starting at $2.99 million and 90 percent of the older homes, built in the 1990s.
It was followed by Urban Honolulu, HI, where entry-level luxury homes are priced at $2,375,000 and the median year of construction was 1992. Key West, FL, rounded out the five oldest high-end markets, with the average luxury home built in 1994 and priced at $5,295,000,000.
Other markets with aging luxury goods include Los Angeles (1996), Oxnard, CA (1997), Philadelphia (1997), and San Diego, CA (1999). Washington, DC, and Riverside, CA, tied for tenth place in average construction years in the 2000s.
“These older luxury markets highlight a common theme. Ultimately, age is often part of the landscape and scarcity,” Smith said. “Established properties, limited developable land, and consistent buyer pools help support prices and profitability even when the underlying homes are decades old.”
