Sotheby’s International Realty recently released its 2021 Luxury Outlook Report. Taking a deep dive into high-end residential markets both nationally and internationally, Sotheby’s research offers insights into luxury real estate for today and the future.
Bradley Nelson, chief marketing officer of Sotheby’s International Realty shares his views. “Throughout 2020, there were several articles written about the mass exodus from big cities, but our research revealed that this was not necessarily the case. While the pandemic did bring on a boom in both the suburbs and secondary markets such as the Sun Belt, Rocky Mountains, and the Caribbean, to name a few, there wasn’t a rise in inventory in urban cities, including Manhattan.”
Consider Nelson is referring to the truly high-end markets. “This meant that people weren’t giving up their home in the city, instead they saw an opportunity to speed up the process of buying their dream home in a second or third location,” Nelson said. Think Miami, the Hamptons, and Aspen to name a few locations high-net-worth (HNW) individuals bought additional residences in.
Sotheby’s research surveyed Sotheby agents who “transact in the US$10M+ price category around the world.” Sotheby’s also sought data from Credit Suisse, the Luxury Institute, and the National Wellness Institute. In addition, art and luxury experts weighed in on luxury trends.
Key luxury real estate findings included:
- 63% of respondents said they expected luxury home prices to rise over the next three years.
- Trophy home buyers remain heavily concentrated in the U.S. and China.
- The most important amenities for luxury buyers today are private outdoor space or nearby parks and additional square footage for remote work and, education.
One trend the report confirmed is HNW individuals are investing in large compound type properties. Think the Kennedys. These properties tend to be second or third homes where multi-generational families including adult children and grandchildren can gather safely with lots of room for individual privacy.
They are buying large California vineyard properties, estates in the Hamptons, large ski properties in Colorado, and sprawling Oceanfront mansions in South Florida. According to the report “sales of million-dollar single-family homes in Palm Beach County more than doubled in the fall compared with 2019.”
The platinum-plated Rocky Mountain ski resort towns are seeing major increases in year-round HNW residents. Consider the total sales volume in Aspen hit a record high of more than 1.5 billion in 2020’s third quarter. According to Zillow the typical value of Aspen homes is $2,115.090.
As priorities for ultra-luxury luxury buyers changed due to the pandemic Nelson believes new “must-haves” are here to stay. “We found that since the pandemic has presented many with the opportunity to work remotely, luxury buyers are rethinking their preferences and taking the opportunity to purchase a home in their dream location.”
Here’s what those buyers now want according to Nelson. “Interest has been recalibrated for larger, greener properties with special features including multiple office spaces, gourmet kitchens, and outdoor entertaining space in secondary cities and countries with favorable tax and emigration policies. These preferences are likely here to stay for the foreseeable future.”
The takeaway from Sotheby’s 2021 report is that ultra-luxury buyers now have even more freedom to live where and how they desire.