Despite a lull in the overall housing recovery, high-end homes are seeing a strong sales surge. Whether fueled by foreign buyers or cash-heavy, investment-hungry Americans, multimillion-dollar homes are seeing the biggest annual sales jump of any other housing segment.
Homes priced above $1 million represented just 2.5 percent of overall sales in July, according to the National Association of Realtors, but their volume jumped 8.5 percent from a year ago. Sales of the lowest-end homes fell by just as much. While the ultra-rich have always had a soft spot for real estate, their love affair is only heating up now.
"In the very high end, $35, $40, $50 million, it makes sense for them to buy because of carried interest [a rule in the U.S. tax code that lets managers of some types of investment funds pay a lower tax rate than most people]—or it's foreigners with all that cash—or it's the stock market's very high valuations," said Dolly Lenz, CEO and founder Dolly Lenz Real Estate, and CNBC contributor. "The $147 million purchase in the Hamptons, that was a carried interest purchase, a hedge fund guy."
Lenz recently represented News Corp. Chairman Rupert Murdoch in a reported $57 million purchase of four floors atop a Manhattan condominium tower.
In June, Ryan Serhant, a real estate broker and a regular on Bravo's "Million Dollar Listing New York," put a $118.5 million penthouse on the market in Manhattan's Battery Park.
While New York City may rank among the nation's most expensive real estate markets, it only comes in sixth on a global list compiled by London-based Knight Frank, a residential and commercial real estate consultancy. Los Angeles and Miami came in at 13 and 14, respectively.
High-end buyers tend to be concentrated on the coasts and in vacation destinations like Colorado and Utah. In Miami, especially, foreign buyers rule the condominium market.
"Miami's ultra-luxury condo market—where prices start at $10 million—is performing better than the overall luxury market from a price perspective," noted Peter Zalewski, a principal with the Miami real estate consultancy CraneSpotters.com. "The recovering economy and the surging stock market in the United States combined with economic and social strife overseas in places like Argentina, Russia and Venezuela are working to create competition for ultra-luxury real estate in popular but stable international destinations like Miami."
There are currently 45 Miami condos priced at or above $10 million on the market, according to Zalewski. In the first seven months of the year, five units in that price range sold.
—By CNBC's Diana Olick.