As 2019 is quickly coming to a close, we can’t ignore that we’ve already firmly stepped foot into a new era of luxury real estate. Our November Luxury Market Report shows that while there is still a slow-down in upper-tier price ranges across most markets, there’s a small boom happening in secondary cities where taxation rates are more favorable.
These changes have also led buyers and investors to focus on diversifying their real estate portfolios more than ever, and luxury real estate agents can surely capitalize on their interest in purchasing a variety of homes in a variety of markets more than ever before.
November’s real estate market trends show an overall buyer’s market
Congruent with October’s report, November’s real estate market trends lean in the buyer’s favor with a 14.57% sales ratio and the median sales price down $17,500. However, attached homes are selling for 98.2% of their listing price, which aligns with the rise in popularity of luxury condos across many markets as millennials and baby boomers continue to downsize.
Investors are now taking their chances on secondary markets
Throughout the latter half of 2019, we have seen luxury buyers shift their interests towards secondary markets, such as Denver, St. Louis, Austin, Seattle, Charlotte, and Richmond (VA) to name a few. This shift appears to be one of the direct effects of changing taxation laws in major luxury markets such as Los Angeles, New York City, and have been driving today’s luxury buyer into areas where tax rates are more affordable.
What is somewhat unexpected, is that luxury investors have followed suit and are also beginning to focus their investments in secondary markets as well. In fact, real estate market trends all over the world are mirroring this interesting transition and cities like Frankfurt, Manila, and Taipei are landing in the top five most favorable luxury markets according to luxury real estate consultant Knight Frank.
As agents are adapting to real estate trends in the luxury market, understanding the changing preferences of investors will be one of the most valuable assets they can offer their luxury home sellers.
In addition to seeking investments outside of traditional luxury markets, investors are also strategically partnering with each other more frequently to maximize diversification while minimizing risk.
The desire for technology can’t be ignored
When luxury real estate agents look at what is motivating today’s luxury home buyer, there are a few real estate market trends that can’t be ignored. As other reports have revealed, health and wellness are a couple of those trends. However, this month’s report made it clear that today’s luxury buyer is also highly motivated by technology, whether that means having access to smart home technology or being in an area that is fueled by technological opportunities.
When working with luxury home sellers who may have outdated amenities, it is becoming increasingly necessary to modernize their homes before listing to avoid sitting on the market.
Today’s buyer overwhelmingly favors quality over space, and part of that quality is provided by the ease that comes with smart home infrastructures and other highly-optimized amenities. Familiarizing yourself with these will help you better understand the lifestyle that you’re selling to these clientele.
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Source: Luxury Insights