Pretty Interesting News for the Luxury Market
Although luxury real estate has experienced somewhat of a “softening” recently (particularly in more remote locations where sellers sometimes wait years for their properties to sell and often at steep discounts or through an auction) in the last few weeks we are starting to see a little surge in interest in many luxury communities and properties. Buyers are now finding that they can work “from anywhere” and are looking for healthy communities with a lot of open space - Montecito and Santa Barbara here we come!
Thinking of Buying or Selling a Home?
No matter your price point, if you are a buyer or seller in today's real estate market, shopping for a home and selling is suddenly done differently - virtual showings, gloves, masks and safety protocols, e-signing documents and lots and lots of communication.
But despite the new normal, we are seeing a lot of real estate activity, listings and showings are increasing everyday and the “experts” are even predicting that real estate will lead the economic recovery.
The luxury market has suffered along with the rest of the real estate industry, but that suffering has not been distributed equally. Already we know, for example, that demand for remote listings has risen while interest in places like Brooklyn has fallen off.
But as the country slowly lumbers toward reopening, numerous real estate professionals believe that luxury, in particular, isn’t going to just bounce back to what it was before. Instead, agents who spoke to Inman envision the pandemic fundamentally reshaping both the locations that luxury buyers are willing to consider, as well as the types of properties they want to inhabit. Everything, from the parcels to the finishes is experiencing a sea change. And while the pandemic may be temporary, its reshuffling of the luxury real estate world very well may not be.
Semi-remote, amenity-rich housing may come out ahead
Probably the most apparent trend to emerge out of the pandemic is a growing interest among luxury real estate consumers to look for properties in attractive areas that are at least somewhat removed from major population centers.
“The Hamptons are going crazy,” Craig Hogan, Coldwell Banker’s vice president of luxury, told Inman. “They’ve got agents getting 15 calls a day.”
Virtually everyone who spoke to Inman for this story described some version of that pattern.
“I have had so many New Yorkers call me about this listing because I think they want to get out of the city right now,” Kristin McFeely, a Compass agent in the Philadelphia area, said of an 11-acre country estate that she currently represents. “I’m feeling like buyers now want a little more space.”
Nash offered a similar take, pointing to Quail Creek as an example of the kind of property that has become even more appealing during the crisis.
“I think people who are stuck up north right now are saying, ‘if I’m stuck I’d rather look out the window at palm trees,” he explained.
This trend may seem obvious, but the way real estate professionals actually see it playing out is less so. For example, it doesn’t mean that everyone wants a bunker in the middle of nowhere. Quite the opposite, in fact.
“I think everyone right now loves the idea of community,” McFeely said.
She went on to say that the kinds of luxury properties that may thrive could end up falling somewhere in between urban and remote. They’ll have nearby restaurants and walkability and good schools and a sense of community. They just won’t be in some of the denser parts of the country.
Carrie Wells — a Coldwell Banker agent working in Aspen, Colorado — strongly agreed, saying that out-of-state buyers are gravitating to her market right now but many want to be in town rather than in a more remote setting.
“I hear it from my clients,” she said. “They’re really looking forward to being able to be with others. People get excited to see one another.”
Along those same lines, many agents who spoke with Inman expect to see high-density units suffer. Nash, for instance, believes that the Florida market will thrive as the pandemic winds down, but expects Miami condos to take a hit.
“I don’t think that the condo market goes away, but I think there may be a pause,” he said. “Because people have been quarantined in such a small space and it seems like there’s been such a concentration in those big dense metropolitan cities, those buyers might be leaning towards not duplicating a purchase down in Florida in a dense building.”
Michael LaFido, a consultant and broker with properties in the Chicago area, made a similar observation about his own market.
“I think you’re going to see some negative effects there,” he said of urban apartment and condo units. “I think you’re going to see supply that’s currently on the market sit.”
Perhaps ironically, McFeely also thinks suburban tract housing — which dominates some wealthy markets — may also lose ground because it lacks the walkability and amenities that people long for while in isolation.
“I do think those McMansion neighborhoods are less appealing now,” she added.
Many agents who spoke with Inman also expect the rise in telecommuting will accelerate these trends, potentially allowing more people to leave pricey metro areas and move to smaller cities or towns.
“That hedge fund manager, or that corporate attorney has now adapted and has been just as productive as they were sitting in an office with 200 people. I think this has proven that you can be productive and not be in Manhattan.” Nash said