What trends will dominate luxury real estate in 2022?
Luxury real estate hasn't lost its popularity despite any crises and pandemics, but the development and changes in the real estate industry leave their own impact on this direction. What should realtors and brokers know about the luxury niche in 2022? Consider the following market trends.
Supply vs Demand
Lots of real estate experts report that people experienced the lack of inventory this year and now they want to understand whether the equilibrium between supply and demand can be achieved in the future.
There is a viewpoint that this data is going to reach an almost equal rate later during the year. There will be an increase in the number of spring listings and a construction boom that will happen quite soon, so they will contribute to that as well.
Prices go up
People could see an increase in luxury real estate prices back in 2021 and the speed of this growth was one of the fastest for a century. Experts say about an increase of over 20% for a year or so. The median luxury home price for a home for one family has increased by almost $300k in comparison with a previous year, while attached homes have grown by over $130k.
The main question that interests real estate professionals sounds as follows: will such high prices become a norm for luxury real estate despite equalized supply and demand? Some experts still believe that this level up won't reduce prices greatly and they will remain quite high.
New luxury destinations
If earlier buyers were more interested in the real estate that could keep them in the center of all events, nowadays the shift has been made towards new areas not in close proximity to the cities. The majority of people have appreciated the opportunity to work from home, so they look for comfortable communities elsewhere. An interesting fact is that 38% of buyers have been from other states and countries.
Where do they prefer to reside? Mainly, these are states located along the Sun Belt including Florida, Arizona, South Carolina, Nevada. and others. The main reasons that encourage them to move are financial considerations like the absence of income tax, a more interesting lifestyle, and of course, a favorable climate.
Multiple ownership of homes
It is worth mentioning that there is an increase in the number of people who own several homes. Wealthy people whose net worth is over $5 million have 2 and more properties. There are also no distinct lines between primary and secondary places since all of them are used approximately equally, therefore, it does not prevent rich people from making next purchases. It has led to the ownership of homes not only in the US but also on other continents. Therefore, nowadays the top 5 cities where established people want to have property are London, Paris, Geneva, Singapore, and Beijing.
Focus on sustainability
One more important point that attracts luxury homeowners is going green and energy-efficient. They believe in a carbon free future, so all the considerations connected with the environment and making homes sustainable matter a lot for them. No wonder it becomes one of the key requirements to purchases made by successful people, so they pay more attention to homes that allow using energy efficiently, are LEED-certified, built from recycled materials, have roofs covered with solar panels, ones with special systems known as smart homes, and so on. Naturally, wealthy people can easily upgrade newly bought homes with all these benefits but their impact on the environment is still important for them. Therefore, they hope to get such homes ready for use from the market and feel absolutely eco-friendly in them.
Experts also say that soon 70% of all luxury homeowners will be representatives of younger generations and their contribution to the market growth is over 130%.
International buyers tend to come back
It's not a secret that foreign investors have always considered the US a good destination for investment. Many of them are attracted to LA, NY, Miami, and experts hope they will come back to the market in the nearest future. Professionals believe that they will be looking for homes in suburban areas with more open space and better privacy.
A specialist who deals with luxury property should understand not only what to expect in the market but also learn the needs of clients and try to meet their expectations as accurately as possible. For this purpose, they need to analyze every point on the list of requirements and compare them with global trends to keep clients interested. It's important to remember that buyers' preferences and concerns play the most important role, so they may be a key to the success of every order.