What is the current state of luxury property?
The last three years were unprecedented in terms of luxury home sales, but we’re entering a period now that may be even better in terms of stability and sustainability.
Granted, the cost of money has increased, but a number of other factors point to a positive trend. One long-term effect of the pandemic is that it refocused people’s attention on real estate.
Obviously, a great deal of wealth has been created in recent years, the 2022 equity markets notwithstanding. It’s likely that we’ll see a boomlet behind the reopening of Asia. Plus a weak euro has drawn foreign property buyers to the EU. And in a lot of luxury markets, demand still outpaces supply.
Buyers are definitely a little more judicious now, which is good, but looking ahead several years, we believe we’re set up for a strong global luxury market.
How has it changed in the past year?
There is a more rational approach in the marketplace, and, again, that’s a positive. “A-plus” properties are still selling quickly and commanding, in many cases, record prices. But most properties aren’t perfect – whether it’s location, condition, design, etc. And those sellers are going to have to accept a commensurate discount.
That’s just a normal market. And we’re really encouraged by the level of activity we’re seeing this spring.
There were a lot of people predicting disaster in 2023, and we haven’t seen anything close to that. It’s been a very fluid, stable market in the luxury sector and even in the lower price ranges too.
How are you feeling about late spring/summer 2023 and beyond?
Looking ahead to late spring, summer and beyond, we’re optimistic.
Most encouraging is that demand appears to be stronger than the market was betting on at the end of last year. And to the extent that interest rates impact the high end, the resilience of buyers has been somewhat of a revelation.
People have adjusted more quickly to higher rates, understanding that it’s a temporary situation that can be actively managed.