Estate Management

Part
01
of one
Part
01

Secondary Homes - Valued at 10 Million Dollars and Above

While there is no publicly available information to fully answer your question, we've used the available data to pull together several key findings. Though the number of homes worth $10 million or more is not a matter of public record, we triangulate the number of "super luxury" homes worth $5 million or more at approximately 129,000, of which as many as 15,000 may be second homes. However, most of these are pricey because of their locations rather than because they are sprawling estates, and there are as few as 1,000 estate managers in the entire US. These managers earn $90,000 to $300,000 per year, with under $200,000 being more common. Below you'll find an outline of our research methodology to better understand why the information you've requested is publicly unavailable, as well as a deep dive into our findings.

METHODOLOGY: SUPER-LUXURY MANSIONS

We began our research with the US Census Bureau. While it was doubtful at best that they would have information about second homes, knowing how many high-value owner-occupied houses exist in the US and whether they were growing or shrinking in number would at least frame our research. Unfortunately, the Census Bureau only tracks home values up to "$1,000,000 or more" in value, but this still gave us a couple of data points that would prove useful in our ultimate triangulation.
First, there were only about 2.07 million homes worth $1 million or more in 2017, up from 1.65 million in 2012 and comprising 2.7% of all owner-occupied houses. Second, the total number of homes during that time barely budged, growing from 75.5 million to 75.8 million, so we understand this apparent growth to indicate rising home values, a supposition supported by Zillow's Home Value Index.

Another report found in Mansion Global indicates that the "growth rate of super luxury homes—those valued at $5 million or more—is outpacing homes valued at $1 million or more" by a rate of about 2%. However, getting into the meat of the article, we find that this growth rate likewise has far more to do with appreciations in value than with new construction. As noted by Cheryl Young, a senior economist at Trulia, as people start to look for homes in low inventory, high-income areas, "homes that were $1 million or $2 million years ago, people can get $5 million for now."

Meanwhile, in other areas of the country, super-luxury home prices are falling. For example, lakefront mansions on the North Shore area of Chicago sold for "at least $10 million" in 2015, but the highest price garnered in 2018 was only $7 million. We hypothesize that the reason why there is so little data on home values above the $1 million range is that prices are so subjective and change so quickly that attempting to collate the data is frustrating at best, costly, and only of value to a handful of organizations.

To try to confirm or deny that hypothesis, we attempted to locate Trulia's original report for more information, but it was not archived in their public research section. It may have been taken down, but since a sweep of the Internet Archive also failed to locate it, we suspect that it is available only through Zillow's paid resources for real estate agents. We next explored Zillow Research's public data tables. We found that while these provided detailed information on average home costs in different markets and the inventory of for-sale homes, Zillow did not provide a complete count of houses, let alone segmented by price range.

Since the requested information does not appear to be published in the public domain, we next attempted to triangulate the answer.

TRIANGULATION: SUPER-LUXURY MANSIONS

Since the number of $10 million-plus houses is not a matter of public record due to the nature of the market, we will use the available data to triangulate the number of "super luxury" mansions worth $5 million or more. The Mansions Global article provides the critical data point that in the 100 largest metro areas, 4.3% of homes were valued at $1 million or more and 0.28% were valued at $5 million or more. Expressed as a ratio, this means that homes worth $1 million or more are 0.62 as likely to occur in the entire US as in the top 100 cities (2.7% / 4.3%). If this ratio holds true for super-luxury homes (those valued at $5 million or more), then we would expect 0.17% of all homes in the US to reach this value (0.28% x 0.62). Multiplied by the Census Bureau's estimate that there are approximately 75.8 million owner-occupied houses in the US, 0.17% gives us a total of approximately 129,000 super-luxury homes in the nation (rounded to the nearest thousand).

This does not, of course, tell us how many of these homes are worth $10 million or more. It also does not provide insight into how many of these homes are so expensive due to their location in a major city rather than because they are sprawling estates in need of management. It is, however, the best possible estimate given the limitations in the data.

Another report attributed to the Census Bureau estimates that there are 9 million second homes in the US, which is about 3.5% of the nation's 252 million housing units (including rentals). Dividing 9 million second homes by the 75.8 million owner-occupied homes, second homes account for 11.8% of all owner-occupied houses in the US. Assuming for the sake of our calculation that this percentage holds true in the case of super-luxury housing, there are approximately 15,000 (129,000 x 0.118, rounded) super-luxury second houses in the US. Again, this count is for homes valued at $5 million or more; the number of sprawling estates in need of full-time managers cannot be determined from the available data — and as will be explained, the actual number of estate managers suggests that the true answer is far smaller.
As an aside, the article cited for the percentage of second homes attempts to estimate the number of vacation rental property management companies. We did not pursue the question of whether such companies would manage super-luxurious rental properties as that is outside of the criteria for this report. However, if they do at the same ratio as they do other second homes, as many as 6,600 super-luxury mansions (15,000 x 44%) could be managed by vacation rental companies instead of privately-employed estate managers.

ESTATE MANAGER NUMBERS

Determining the number of currently-employed estate managers proved difficult. This is not a job category tracked by the Bureau of Labor Statistics. We next studied the sites of several organizations which provide estate managers and other staff to their clients:

None of the above companies divulged any information about how many staff members, let alone how many estate managers, they had in the field. Nor did they provide any information on how many estates need management, though two did provide some useful salary information (see below).

Finally, we found a 2012 article in the Real Deal which states that "there are about 1,000 estate managers keeping the many houses — city, beach and country — of the nation’s elite." While we normally restrict ourselves to sources published within the past two years in order to ensure that we bring our clients the most up-to-date information available, attempts to locate anything more current through the aforementioned sources or other trusted media sources fell through. However, given our previous observation that the number of new super-luxury mansions has changed due to price fluctuations rather than new construction, we hypothesize that the number of estate managers has likely remained stable over the last five years.

ESTATE MANAGER SALARIES

The Starkey International Institute states that estate managers earn a salary that ranges from $90,000 to $300,000 while the Domestic Placement Network claims that $100,000 to $200,000 is more typical. Both of these estimates accord with a 2014 Wall Street Journal article which claims that the "job can pay upward of $200,000 a year, but bosses can be prickly." (Note that most of the article is paywall-locked, but those with a subscription may find more information on estate managers therein.)

CONCLUSION

There are perhaps 15,000 second homes in the US with a value of at least $5 million, but many or most of these second homes are priced due to location rather than size. Indeed, the fact that there are as few as 1,000 estate managers in the whole country suggests that the number of sprawling estates may not be much more than that. There are at least five agencies vying to fill the few open slots in addition to other estate staffing needs, suggesting that any new entrants to this field would find it difficult to gain a foothold.
Sources
Sources