The impact of the pandemic on shoppers’ definition of luxury today has sparked new trends and drawn attention to various markets moving deeper into 2021. This emerges from Coldwell Banker’s “The Report: 2021 Global Luxury Market Insights,” which was released on Wednesday.
In creating “The Report,” Coldwell Banker worked with the Institute of Luxury Real Estate Marketing, Wealth-X, and other third-party data sources to analyze a wide variety of data points such as median list prices of properties sold, median sales prices, median market and more. The company also spoke to 78 Coldwell Banker luxury real estate specialists in 65 global markets for local market insights.
The Realogy brand report describes how buyers’ reinterpretation of luxury as a place for family, health, space, security, privacy and access to nature has fueled the pursuit of properties such as megamansions, luxury developments and even private islands.
In fact, more than half of the luxury real estate specialists surveyed by the brand reported that square footage was # 1. 1 Convenience for shoppers who reverse the “less is more” trend observed in recent years. Sales for homes over 5,000 square feet grew 17 percent from 2019 to 2020.
Other luxury preferences that Coldwell Banker has seen over the past year include home offices, second homes, and the preference for single-family homes. In the meantime, the company has also moved many markets from buyers or balanced markets to sellers markets in 2020, a trend that is expected to continue into 2021. “Trailblazers,” a new luxury demograph the company recently identified, has also helped drive shoppers away from cities and towards cities – places like hidden gem towns and suburbs.
“2020 was a transformation [year] for the luxury real estate market, ”said Jade Mills, President of Jade Mills Estates and International Ambassador for Coldwell Banker Global Luxury, in a statement. “We saw record-low interest rates coupled with an all-time high demand for single-family homes, resulting in extremely low inventory levels and multiple bidding wars in several luxury markets. The emergence of a new wealthy population and a new type of homebuyer has fueled this growth, which has been fueled by lifestyle changes. “
“Many of the trends that we saw at the forefront in 2020 will continue to evolve in the years to come,” she added.
In 2020, four new regions emerged among the top 10 luxury market participants:
- King County, Washington: Home to Seattle, Bellevue, and the surrounding area, this market offered a perfect combination of pent-up buyer demand, limited inventory, and prime locations for buyers looking for more space. The combined sales quota of single family and townhouses in 2020, or the percentage of available listings sold, for that market was 37.7 percent.
- East Bay, California: As shoppers switched to remote working, this market picked up pace outside of dense, expensive San Francisco for both single-family and home sales. In response, the post-July sales quota rose over 100 percent, resulting in a sales quota of 67.7 percent for the year.
- Colorado Springs, Colorado: Millennials and overseas buyers flocked to this mountain town during the pandemic, resulting in a strong combined sales rate of 36.35 percent for single family homes and townhouses.
- Fairfax, Virginia: In this Washington, DC suburb, the demand for luxury townhouses soared, leaving just a month of inventory for those priced at $ 645,000 or more and less than a month for those priced at $ 1 million and up remained. The combined sales quota for single-family houses and townhouses was 24.3 percent in 2020 and almost 52 percent for townhouses alone.
In terms of rising secondary markets, Coldwell Banker identified Phoenix, Denver, and Dallas as the ones to watch in 2021. All three markets saw an influx of out-of-state buyers during the pandemic as work-from-home policies became more common buyers sought more spacious, affordable cities to live in.
California was a big feeder market for all three of these cities, but Denver and Phoenix (among others) also had many luxury buyers from Texas.
Surprise markets that exceeded the company’s 2020 expectations included Salt Lake City, Sacramento, and St. Louis, all of which benefited from buyers leaving other nearby congested, expensive cities as their priorities shifted during the pandemic.
“COVID-19 is definitely a big boost to the latest strength [in St. Louis]”Coldwell Banker Realty-Gundaker’s agent, John Ryan, said in the report.” After people were quarantined, they definitely felt the urge to move into life situations with more space and amenities. “
“The luxury real estate market showed resilience in a dynamic year as the market accelerated many ongoing trends that were already emerging,” said Craig Hogan, vice president of Luxury at Coldwell Banker, in a statement. “With these contemporary perspectives, our luxury real estate specialists can prepare for 2021 and continue to act as trusted advisors as many changing buyer trends and preferences persist.”
Email Lillian Dickerson