The Institute for Luxury Home Marketing is recognized as a leading source for providing statistical data and analysis on the luxury real estate market.
In the recent release of their annual Luxury Report, Coldwell Banker Global Luxury partnered with The Institute to garner clearer insights on the state of the luxury real estate industry during 2019. It was determined that the US remains not only the wealthiest country globally but also dominant in terms of the number of individuals who own that wealth. These findings were validated by research and reports released by Wealth X and Credit Suisse.
So the big question arose if these wealthy real estate investors have the opportunity to own a luxury property anywhere, what were the defining considerations in their choices?
15 diverse locations across five key luxury market types – feeder, vertical, urban lifestyle, evolving, and tourism – were chosen to determine what really influences the decisions of the affluent. Do lifestyle factors, such as activities or culture, or Is it proximity to amenities like upscale shopping and restaurants or does it ultimately come down to geographical advantages like schools and business accessibility?
These 15 markets and their statistics are showcased in more detail on pages 68 – 89 of The Report.
While statistics provide trends it was also important to assess each of the locales through the eyes of those with the local insight, knowledge, and understanding of the nuances of their individual markets. Coldwell Banker Global Luxury provided that local information by connecting with their independent sales associates to help reveal the answers.
1. FEEDER MARKETS
These are markets that attract the majority of their new homeowners from outside their immediate location. This mostly combines attracting second homeowners looking for a seasonal change or long weekend getaways as well as increasing numbers of new full-time residents.
Naples in Florida and Paradise Valley in Arizona are well-known luxury destinations for northern buyers fondly known as ‘snowbirds’, but 2019, there’s been a change in the demographic of their buyers – see pages 71-73 in The Report to find out more. Review the third market, Traverse City in Northern Michigan, find out why this location is attracting luxury buyers from as far afield as China and Europe.
2. VERTICAL MARKETS
As it sounds, these are markets that showed a significant increase in the growth of their vertical luxury residential buildings. Demand for luxury condos definitely saw a shift in 2019 as more people wanted to downsize, move back to enjoy the revival of downtown living and buy a property that offered a plethora of amenities as well as health and wellness benefits.
Three locations that showed some of the greatest changes in their luxury vertical living spaces were Chicago, Philadelphia and St Petersburg. See more about each of these markets on pages 75-77 in The Report.
3. URBAN LIFESTYLE MARKETS
Whether it’s a change in the culture, community or lifestyle that attracted new home buyers, there was a definite move back to living in urban areas during 2019. Both downtown cores and communities within the greater metropolis, now termed “hipsturbia”, saw significant changes with an increase in ‘on trend’ restaurants, bars, cafes, shows, events, activities, and sports which combined to create new vitality.
Nashville, always known for its music, became a mecca for luxury homeowners looking for a change of lifestyle. Detroit saw a renaissance through its college graduates and Brooklyn, NY saw gentrification that created many new desirable luxury neighborhoods. Discover more about these markets on Pages 79-81 in The Report.
4. EVOLVING MARKETS
Markets are constantly changing to meet new demands, however, 2019 can be defined by the diversity of markets that saw a shift in their provision of luxury properties. One of the biggest trends during last year was the migration of wealth to new markets.
Showcasing this diversity the report looked at three very different communities – see pages 83-85 in The Report. Minneapolis felt this keenly with the demand for luxury properties often outweighing the inventory. Bozeman in Montana, once a sleepy town, saw an influx of new inhabitants taking its population over the 100,000-mark. Even San Francisco in California, known for reinventing itself, saw its biggest transformation as new commercial and residential buildings rapidly changed communities such as Mission Bay.
5. TOURISM MARKETS
Tourism has long been a method that many communities use to derive their revenue. Changes in marketing a rental property through such companies as Airbnb and VRBO created new opportunities for investors looking to purchase a second home, both for the short and long term.
The Report on pages 87-89, looks at three diverse markets including The Hamptons, considered by the affluent globally to be the pinnacle of luxury ownership. Fort Lauderdale also recognized as a tourist destination, but one that is now leading the charge in attracting a new type of luxury buyer, to Savannah where new buyers are taking advantage of investing in this historic and art community at more affordable prices.
For further insights into these 15 luxury US Domestic Markets as well as other insights, trends and statistical information about the luxury real estate market during 2019, visit THE REPORT: Global Luxury Market Insights.
Additionally, The Institute’s comprehensive, downloadable monthly Luxury Market Reports will give you the insights you need to stay ahead of trends throughout the United States and Canada, and deliver a monthly analysis on over 80 different luxury markets in North America.