Not all luxury markets in North America are created the same, but this month’s Luxury Market Report reveals that outside influences such as global economic uncertainty, social trends in desirability and financial considerations do affect the affluent’s buying decisions.
Trying to predict what will happen in the luxury real estate market is a hard task, especially as the market is ever evolving with both global and local influences creating new opportunities and challenges.
Taking a look at three very different cities we evaluate their differences but ultimately recognize that their key similarity lies in understanding how they must adapt to this transitioning market, in particular with regards to new buyer trends.
Comparing 3 luxury markets in North America
1. Vancouver, British Columbia
The local situation: For eight years leading up to 2016, Vancouver’s real estate prices surged to a point that made purchasing a home within the city untenable for local residents. As a method of taming the marketing, the local government passed extra home buying legislation in 2016 that targeted foreign investment and nonresidents who were considered to be the cause of the luxury market explosion.
The impact: Luxury sales dropped 26% in the $1 million price range and a staggering 49% for the $4 million plus during 2018. Nearly two years later, the lower end of the luxury market is faring better, while the upper end’s price points are still soft. So creating awareness of the opportunity and accepting this new paradigm has now become an integral part of this marketplace’s growth.
2. Chicago, Illinois
The local situation: Chicago, considered to be the city of steady real estate growth, reported in 2018 that the luxury market of $1 million plus grew only 1.7% compared to a big year of 10% in 2017, and the forecast of a slower 2019 has proven true to date
The impact: Sellers in more established homes should recognize that their home could be considered dated by today’s standards. Most affluent buyers are looking for turnkey properties with all the modern accouterments. The market is competitive in this regard, so presenting your property concisely and in a way that clearly emphasizes its best features immediately is crucial to success.
Download this month’s Luxury Market Report for an in-depth look at the top residential markets across the United States and Canada.
3. Scottsdale, Arizona
The local situation: Scottsdale, a popular place for retirees looking for great weather year-round, which makes it an easy choice for luxury retiree buyers who are looking for a hotspot to relax in. The lower cost of living and easy recreation in the city has also meant that it is experiencing an increasing influx of new homeowners from California, Seattle, Chicago, and New York.
The impact: Buyers in these areas are looking for smaller homes with plenty of storage and properties that will include very little maintenance for older buyers. Buyers are looking for a decent amount of amenities and properties that are completely renovated.