Newer homes aren’t always perceived as better. That’s evident in many coastal markets, where buyers show a preference for older homes with character, even if they’re smaller.
Recent studies reveal a notable divide in the luxury real estate market. Properties in older coastal cities tend to be smaller and older, whereas newer, larger homes are available in expanding inland areas for lower prices, based on a report by Realtor.com®.
Iconic cities like New York City, Philadelphia, and San Francisco symbolize established luxury that’s steeped in history.
According to Anthony Smith, a senior economist at Realtor.com, luxury in these cities leans more toward historic neighborhoods and older architecture rather than new constructions. Homes built years ago retain value due to their location and unique qualities.
To put it plainly, many affluent buyers prefer living in prestigious cultural hubs like New York. They’re willing to sacrifice space and modern amenities for a desirable location, often settling for older, smaller homes that cost as much as sprawling properties elsewhere.
Luxury homes at the entry level, which define the top 10% of the market, have a baseline price of around $1,193,000, with median construction year around 2003, according to the January 2026 Luxury Homes Report by Realtor.com.
A typical home selling for $1 million to $2 million usually measures about 2,931 square feet and sits on the market for around 92 days.
However, in some pricey coastal markets, the average construction timeline falls between the 1970s to the 1990s, and luxury homes generally range from 1,600 to 2,000 square feet.
Smith points out that this size discrepancy reflects what buyers prioritize—land, neighborhood prestige, and closeness to jobs and waterfront spots take precedence over space or new buildings.
The West Coast leads in age of luxury homes
San Francisco features the country’s oldest luxury home inventory, with a median construction year of 1974.
In January, the typical entry-level luxury home in San Francisco was listed at $2.499 million, selling 78 days later, which is quicker than the national average.
Just 80 miles southeast is San Jose, California, where the top 10% of homes begin at $3.15 million and have a typical construction year of 1977. Alexander Kara, a local real estate agent, notes that this older luxury housing market draws many serious buyers.
Kara mentions that many clients are established families who appreciate larger lots and mature greens, opting for selective renovations to update interiors, rather than chasing new constructions.
He adds that investors and international buyers often target these older homes due to proximity to top employers and schools, which makes them prime for value appreciation through renovations.
San Jose’s impressive sales speed
It’s no surprise that luxury homes in San Jose, typically around 50 to 60 years old, are being bought up quickly, averaging just 19 days on the market last month.
Kara attributes this swift pace to “a perfect storm” of low inventory and high-spending buyers who aren’t overly affected by interest rates.
Similar to other coastal cities, San Jose experiences a fierce competition for quality listings, even during slower seasons like winter, according to Smith.
“You have tech and AI professionals whose earnings are rebounding, and they’re competing intensely for premium properties that hit the market,” Kara says.
He emphasizes that although demand is robust, the real shortage lies in the availability of luxury properties.
“We have clients who are pre-approved but are struggling to find inventory,” he explains, suggesting this market dynamics leaves little room for leisurely decision-making.
“The top homes often fetch prices close to or above their listing,” he notes. “Holding out for the ‘ideal’ deal can mean losing out to a more decisive buyer.”
What distinguishes San Jose from other markets, according to Smith, is the widespread wealth that extends throughout the housing sector; over half of properties in the city are priced above $1 million, significantly more than the national average.
Unlike newer Sunbelt cities with fresh developments, San Jose’s luxury market stems from decades of growth, frequently featuring homes from the 1950s and 1960s.
Many properties in the $1 million to $2 million range may seem smaller by national standards, but their value is defined by their strategic location, appealing to affluent families in Silicon Valley.
“High-end buyers can find homes with spacious backyards and excellent schools while remaining close to major job centers—a combo that’s pretty rare,” Kara concludes.
Other notable legacy markets
On the East Coast, New York City is also home to aging luxury real estate, with entry-level prices starting at $2.99 million, and many homes built in 1990 or earlier.
Urban areas like Honolulu, Hawaii, feature entry-level luxury homes priced around $2,375,000, with most constructed in 1992. Meanwhile, Key West, Florida offers luxury homes built in 1994 with starting prices around $5,295,000, capping off the list of areas with substantial older luxury markets.
Other cities with deep-rooted luxury real estate include: Los Angeles (1996), Oxnard (1997), Philadelphia (1997), and San Diego (1999), with Washington D.C. and Riverside, California having median construction years around 2000.
“A recurring theme in these older luxury markets is that, at the upper end, age takes a backseat to location and exclusivity,” Smith explains. “Established neighborhoods and limited land availability sustain market values, even for homes that are decades old.”
