As we reach the midpoint of 2024, it’s time to evaluate the luxury real estate market and assess its status at the end of June 2024.
This month’s Luxury Market Report delves into the key statistics, trends, and future expectations shaping the North American luxury real estate landscape – here is a synopsis:
Statistical Review
The North American luxury real estate market has largely returned to a seller’s market after a slow start to the year. June’s statistics, compiled by The Institute, reveal significant trends:
Single-Family Homes: Out of 150 markets analyzed, 95 are seller’s markets, 32 are balanced, and only 24 favor buyers.
Attached Properties: The market shows an even stronger bias towards sellers, with 59 out of 103 markets favoring sellers, 21 balanced, and 23 favoring buyers.
June 2024 saw a slight decrease in sales compared to June 2023—1.7% for single-family homes and 6.8% for attached properties. However, sales have surged since January 2024, rising by 174.5% and 107.7%, respectively. Compared to May 2024, single-family home sales increased by 7%, although attached property sales fell by 13.8%.
Despite typically slower months ahead, these figures indicate that the overall luxury market across North America is maintaining its strength, especially in terms of demand.
Inventory and Pricing
Inventory levels have continued to climb, with a 34.7% increase in single-family homes and a 47.2% increase in attached properties compared to June 2023. New inventory each month has also risen, with a 23.5% increase for single-family homes and 26.3% for attached properties compared to last June.
Low inventory remains a challenge in many luxury markets, with sellers hesitant to list their homes due to high interest rates. Buyers have become very specific in their expectations, willing to wait for the right property. This has resulted in a steady rather than volatile market.
Some luxury properties have faced downward pressure on prices, allowing buyers more opportunities to negotiate terms such as repairs or closing costs. Nevertheless, as of June 2024, the median sold price for single-family homes increased by 2.0%, and for attached properties by 2.9% compared to June 2023.
Price consistency indicates that the luxury market is still favorable to sellers. Despite discussions about a lack of sales, the sold price-to-list price ratio remains close to 100%. In June, single-family homes sold at an average of 99.09% of their list price, while attached properties sold at an average of 99.10%.
Considering demand, sales, and prices during the first half of 2024, the North American market has demonstrated an increasing resilience that few predicted at the start of the year.
Trends in Review
The luxury real estate market in North America remains robust due to several key factors:
Wealth Accumulation: Wealthy individuals and families have continued to accumulate significant assets, leading them to diversify their portfolios and preserve their wealth by investing in luxury real estate.
Increased Inventory: The increased level of new inventory entering the market has created more opportunities for buyers.
Demand for Luxury Properties: Despite rising inventory levels, the supply of luxury homes in many markets remains below demand.
Lifestyle Changes: Changes in lifestyle, work-from-home trends, and evolving expectations from a home continue to influence affluent buyers seeking new homes.
Customization and Sustainability: Buyers have been increasingly seeking homes that can be customized to their preferences, from personalized interior design and bespoke architectural features to adaptable and sustainable spaces.
Urban vs. Suburban: There is a division between buyers moving away from populated urban areas to suburban and secondary markets and those who continue to embrace living in urban centers.
These factors combine to create a robust and resilient luxury real estate market in the U.S., appealing to a broad range of buyers and investors both domestically and internationally.
Future Expectations
The luxury real estate market is expected to continue evolving and adapting to changing consumer demands, technological advancements, and economic factors.
The first half of 2024 has shown that the North American luxury real estate market remains strong and resilient, with robust demand, increasing inventory, and steady prices. As we move into the second half of the year, these trends are expected to continue, shaping a dynamic and evolving market.
Stay Ahead with The Institute
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