Luxury buyers Report in the U.S.

Shanna Mawer
Published by Shanna Mawer

July 2021 This six-month review will look at the Properstar luxury leads activity for international property from January to June 2021 in major markets, to give us some insight into the resiliency of the international real estate market and how its recovery and future activity may look. 

 

The demand for luxury housing worldwide is on the rise

We look closely at the United States luxury market in this article and consider:

  •  the state of the luxury market 
  •  foreign interest by country 
  •  who is buying and what are they seeking?

Many are awaiting the reopening of borders to enable luxury property buyers to finally close the deal that they have placed on hold.

 

Who is buying and why?

It is important to know the preferences of these investors. We have looked at this group so that as a Global Agent, you can capitalize on the preferences of foreign investors to ride the next wave – of luxury home sales.

 

The luxury buyer in 2021

Homebuyers are looking at larger properties that are farther afield of locations they would have considered in early 2019.  Consumer ideals of secondary and vacation homes have pushed interest to outside of urban areas.  The top three priorities for luxury buyers: 

  • Single family detached home – 97.5% 
  • Home is move-in ready – 37.5% 
  • The home is larger than their current home – 27.5% 

Affluent international consumers have realigned their priorities to spend more on real estate that gives them a sense of security, health, safety, and privacy. A focus on work, school, socializing and entertainment activities that occur from the home is a driver of consumer searches for the remainder of 2021.  The approaching release of pent-up international demand is set to spur sales activity across the luxury markets. Buyers have unprecedented access to cash and low-cost borrowing.

 

Global Agent Insight

More Chinese buyers are buying through virtual tours and meetings

 

Several factors are fueling demand for luxury homes;

  • a market with historically low-interest rates (still) 
  • household savings have increased last year due to reduced activity during the pandemic  
  • young buyers are eager to enter the property market 
  • pandemic-related health concerns have prompted older buyers to fast-track to their ideal  retirement home sooner

The luxury real estate market responded to a changing world with buyers wanting another home more than ever as they realized that they should have a second place to go. The upturn in the second-home luxury market is likely to remain for at least several years, and maybe permanently. 

 

What do luxury buyers want?  

Working from home and remote learning has allowed people the flexibility to enjoy the perks of a resort lifestyle and not just for vacations. Second-home markets will see an influx of clients ready to buy even in off-seasons. Considering the fervor of stock market gains, locked-in bargain mortgage rates, pent-up demand, and new consumer mindsets, the luxury market is poised to experience a very active season this summer.   Buyers have new requests for properties with a home gym or larger spaces. For example, property with a swimming pool is highly desired and clients also want to be in neighborhoods with a better walkability score. There have been more requests for properties with at least one home office and in many cases two.  With the increased interest in overseas property, luxury buyers have indicated that they prefer to be somewhere with more of an outdoor lifestyle, better weather, and access to swimming pools and beaches.

 

Global Agent Insight

Buyers are now more willing to renovate, as supply is limited

 


Foreign buyer interest  

Now that we have identified what luxury buyers are looking for and why they are purchasing property in this market, let’s look at the leads activity data from Properstar sources to find out more about where foreign luxury buyers are purchasing.  The U.S. and Turkey really know how to put opulence in their luxury properties, and we can see that the ultra-luxury (above 2.5M) price range options for foreign buyers in these countries reflect that, along with the availability of properties with larger footprints, that often include more land.

 

State of the luxury market in major markets 

About this time last year, the luxury real estate market found itself at a standstill, then things began to pick up again in the last half of 2020. We never could have anticipated the surprising ways that the luxury market flourished. Here, we look at the last six months of 2020 as compared to the first 6 months of 2021 in the luxury market.  The takeaway here is that all luxury property leads have increased in each of these markets.

 

Luxury real estate in the United States

COVID-19 has created winners and losers. Among the winners is the American luxury real estate market.  The luxury home market in the United States has undergone a marked change since the pandemic began in early 2020. The median list price has increased by $77,500 and the days on market have been reduced significantly – by about 23 days. Statistica

 

Who is looking at luxury property in the United States?  

As we entered 2021, we all held our breath to see what would happen to the world economy in general, as a world pandemic had changed markets, interrupted business activities, and altered consumer mindsets in almost every industry for most of 2020, on an international scale.  Our lead source data shows that foreign leads for luxury property in the United States come from:

 

When borders re-opens, a second boom in the North American luxury property market is expected to be fueled by a strong foreign buyer and investor presence.

 

The North American luxury market growth activity in the past year is mainly attributed to buyers from within its own borders in the past year due to pandemic restrictions. So, when international travel and immigration resumes, a second boom in the North American property market is expected - fueled by a strong foreign buyer and investor presence. Sotheby’s Spring Report 

 

Where are luxury buyers looking in the United States?

We analyzed the location of luxury home listings that were of special interest to foreign buyers.  The top five regions of interest are as follows:  We drilled down a bit further and discovered that luxury buyers searching in the top regions were interested in property in these cities/counties:  There has been a 15% increase in luxury property searches so far this year in the United States, as compared to the number of luxury home searches in the last six months of 2020.

 

What type of homes are luxury buyers seeking in the U.S.?

For home searches in the American luxury market, about 63% of buyers are looking at homes priced at over 2.5 million, while most luxury apartment searches (about 61%) are under 2.5 M.  What do luxury home buyers want the most in their American property? 

  • Open floor plans with superlative storage and multi-purpose rooms  
  • Technological innovations 
  • Opulent, commercial-grade kitchen appliances with ample storage 
  • Outdoor kitchens and pools 
  • Spa bathroom 

The epitome of a luxurious home is one whose amenities allow the owner to feel lavished upon or spoiled and many luxury properties in the U.S. can deliver.

 

Advertise globally 

This summer is slated to be an exciting time for luxury property transactions. Have you made sure to maximize your opportunity by becoming a Global Agent and utilizing Luxury promotions for your top listings?

 

Global Agent Insight

More Chinese buyers are buying through virtual tours and meetings

 

Luxury real estate developers are rethinking their designs to adapt to consumer preferences following the pandemic as the rate of new construction will begin to ramp up again.   From a resurgence in urban luxury condominiums to multi-generational influences, to general optimism, there are many factors that help explain how luxury home sales are selling in today’s economic environment.

 

Foreign luxury home-buyers will continue to come and there’s going to be even more of them.

 

Properstar’s consumer traffic data shows that the volume of searches for overseas properties has surged this year, as locked-down consumers had time to plan and search for luxury property.  We can help you attract these clients with our suite of products and services.  Can the market be sustained? Market observers and experts project that the luxury segment of the market could cool down over the next 12 to 18 months. There is no better time to promote your properties on Properstar.

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