We’re halfway through 2019, so what better time than to look at how some of the market predictions made at the beginning of the year are faring in this month’s Luxury Market Report.
While this report seeks to give an overall view of the luxury market and concurs that luxury real estate is firmly entering into a year of changing demand, it is still important to recognize that individual markets must be viewed separately too – certainly one of the most significant observations is that there are many markets in the ‘change’ process and the trends described above are causing a variety of influences that are often in contradiction to current expectations.
PREDICTION #1: GOVERNMENT REGULATIONS WILL NEGATIVELY IMPACT THE MARKET.
FALSE: In late 2018, many were predicting that government regulations along with tax increases, would negatively impact the high-end housing market. However, the reality is that so far in 2019, government regulations have not had the largest impact on the luxury market in either the U.S. or Canada. Instead, the greater influence has been the impact of global uncertainty, changes in purchasing decisions, and relocations to avoid high local taxes that have caused the most significant changes in spending habits and location desirability.
PREDICTION #2: DEMAND FOR LUXURY CONDOS WILL INCREASE.
TRUE: Luxury condominiums have proven to be one of the strongest sectors in today’s luxury market. Early predictions of steady demand in most markets, with downtown cores showing the strongest growth, have proven to be correct. The combination of young professionals looking for live-work-play lifestyles, global entrepreneurs using wealth from their businesses, and baby boomers leveraging equity from their single-family residences to purchase luxurious full amenity condos are the main drivers in this market.
PREDICTION #3: HIGHER SQUARE FOOTAGE EQUALS HIGHER PRICE TAG.
FALSE: While large palatial homes are still in demand, it’s not to the extent that meets the new ultra-wealthy’s criteria for numerous homes that offer ‘smart’ technology and design. These homeowners still want homes that offer plenty of space, privacy, and protection, but with today’s technology, this can be achieved in homes half the size. Instead, features such as smart home automation, unique designs, and custom spaces are achieving extraordinary price tags.
The Institute's Luxury Market Report is your guide to luxury real estate data and trends for North America. Produced monthly, this report provides an in-depth look at the top residential markets across the United States and Canada. Active Members of The Institute receive exclusive access to a deep-dive report with analysis on all of the included markets.
ABOUT THE REPORT
The Institute has analyzed a number of metrics — including sales prices, sales volumes, number of sales, sales-price-to-list-price ratios, days on market and price-per-square-foot — to provide Institute Members with a comprehensive North American Luxury Market report, and where data is sufficient, individual luxury market report overviews including single-family homes and attached homes.
We recognize that there are spectacular luxury properties in nearly every corner of North America. Our report is compiled from the most active markets that offer a wide enough statistical range to show trends over time. As conditions change, some markets may emerge and warrant inclusion, while other markets may soften and be removed from the report.
The active and sold data has been compiled by various sources, including local MLS boards, local tax records, and REALTOR.com. Data is deemed reliable to the best of our knowledge, but is not guaranteed.
Article content from The Institute of Luxury Home Marketing
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