Exactly one year ago, large luxury homes for sale had a hard time garnering any interest from potential buyers.
But now? Well, it’s safe to say the pandemic has greatly influenced luxury buying trends and large luxury properties that offer plenty of space and amenities are back in popular demand.
Before the pandemic, common objections to these properties were that they were too “labor intensive” and “expensive” to manage. Yet with no certain end in sight to social distancing, the affluent are seeking these large luxury properties to make up for a lack of travel, group entertainment, and fitness clubs.
In addition to a surge in interest for large luxury properties, last quarter also ushered in a few other notable shifts.
Mortgage Rates Are Plummeting
Historically low mortgage rates are making it even easier for the affluent to afford their new interest in large luxury properties.
Chief Economist Danielle Hale of Realtor.com says these rates may have been the turning point for those who were on the fence before — especially since the affluent have endured far less job loss during the pandemic than homebuyers in the traditional market.
The topic of low mortgage rates is one that makes for valuable content to share with your email list and social media platforms, and gives luxury real estate professionals a reason to reach out to past clients who may have recently shown an interest in purchasing up.
We Have Entered a Seller’s Market
Overall, the luxury home market has stayed balanced throughout these past six months. Yet, as of October, we’ve landed squarely in a seller’s market.
In fact, luxury home sales are up over 62% compared to last year, with a 5% increase in average home price.
Numbers like these show the market has largely emerged from its nervous “pause” we saw throughout the second quarter and early third quarter.
In addition to more luxury home sales at higher prices, there has also been a shift towards purchasing luxury homes in less densely populated areas like Sacramento and Oakland in the United States, and Hamilton, Muskoka, Durham, and the Kawarthas in Canada.
For luxury real estate professionals who mostly represent buyers, this is a good time to get to know the other luxury real estate professionals in your area.
In one of our latest podcast episodes of Estate of Mind, luxury real estate expert Kofi Nartey points out how getting to know the other luxury real estate professionals in your area can help make negotiations smoother when it comes time to close.
With buyer demand outweighing inventory for the foreseeable future, networking with other luxury real estate professionals in your area can help secure better outcomes for you and your luxury buyers.
Investors Are Placing More Focus on Intrinsic Value and the Stock Market Is Thriving
As for real estate investments, investors are spending on real estate with family and wellness in mind versus merely a financial return on private property.
Further, the stock market has taken a positive turn and is expected to continue to thrive. Unsurprisingly, D.R. Horton, the largest homebuilder by volume in the United States, is experiencing an uptick in stock value of 45% this year.
These factors have created the perfect environment for luxury real estate professionals to share their expertise with clients. Keeping a close eye on real estate investment opportunities and offering your professional opinion is one of the simplest ways to stay top of mind in your sphere of influence.
Since in-person networking is still limited, other ways to share this information with prospects and clients are through video, livestreams via either Facebook or Instagram, or email correspondence.
If there are clients you haven’t touched base with in a while, these new investment opportunities are a topic that could help break the ice.
Be Ready for More Change
Although the luxury real estate market is lucky to have experienced positive effects over the last six months, it’s important to stay flexible and informed on what’s happening in your area.
Trends will continue to shift as the pandemic shifts, which means your marketing and networking approaches will shift as well. For instance, as travel becomes more widely available, desires for certain amenities may change, and some locations may become more or less desirable depending on tourism, safety protocols, and restrictions.
There Has Never Been a Better Time to Stay Connected to Other Experienced Luxury Real Estate Professionals
Becoming a Member of the Institute gives you access to some of the top producers in the industry and done-for-you marketing tools that provide you with a definite advantage.
The Institute also offers a wide range of resources for you to invest in yourself at any stage in your luxury real estate career — even if it hasn’t begun yet.
Visit your Membership Portal for brand new training sessions, as well as our book, Rich Buyer Rich Seller: The Real Estate Agents’ Guide to Marketing Luxury Homes, which is available for free to all Institute Members and also available on Amazon.