The Institute’s Luxury Market Report is your guide to an analysis on the trends and comparative data on the top-residential markets throughout Canada and the United States.
This month’s report reviews the current statistics for the luxury market. It shows a market that has remained consistent during 2019, with increasing inventory in the last few months being fairly typical and expected at this time of year.
In reviewing the major trends of 2019 the broad trend reveals that there is a significant move towards finding a more holistic approach to living. Savvy homeowners, luxury real estate professionals, developers, architects, and designers, are all reporting a significant importance on being placed on the infusion of a healthier cadence into our every day working and living environments.
Luxury is now about creating experiences that afford the feeling of luxurious well-being and the report includes four major trends that have influenced the current real estate market
- Migration to New Markets
- New Groups of Influence
- Health & Wellness
- The Natural Way – Design Impacts
In conclusion, The Institute’s analysis of these market trends and shifting buying interests shows that are lucrative real estate niches, but also still recognizes that there will always be long-term money-makers.
For homeowners looking to sell their luxury home in today’s market, we recommend working with a realtor who can capitalize on the preferences of current investors. By carefully focusing on the lifestyle-specific niche your property offers, in line with trends, it can be marketed effectively to connect with the right potential buyers.
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As the year draws to a close, November’s statistics reveal that the luxury market remains solid, prices stable, and the median length of time, as well as the selling price to list price ratios, remain consistent. Inventory is increasing but this is reflective of both the time of year and ultra-high-priced luxury properties selling at a slower rate than in previous years.
The luxury segment of real estate is often described as being a minor part of the whole industry, but is readily recognized as being a major influencer in creating trends and providing a barometer to changes for the industry. This month we are taking the opportunity to report on some of the key trends in 2019 that are responsible for creating and maintaining today’s affluent influence.
While each market certainly has its own nuances, an overall trend has become very apparent in the luxury market – it’s all about finding a more ‘holistic approach to living.’ Savvy homeowners, luxury real estate professionals, developers, architects, and designers, are all reporting a significant importance to be placed on the infusion of a healthier cadence into our everyday working and living environments.
Luxury is now about creating a comfortable experience that affords the feeling of luxurious well-being. These trends have certainly impacted real estate across North America, and it is anticipated that their influence will be far-reaching into 2020s and beyond.
Migration to New Markets
This year saw a continuation and escalation of real estate investment into 2nd and even 3rd tier markets. Cities such as Dallas, Houston, Denver, Seattle, and Las Vegas may have been on the radar in 2018 but 2019 saw communities such as Jacksonville, Charlotte, Nashville, Cincinnati, Boise, and Kansas City added as markets of growth.
A combination of affordable property values, lower taxes, new job opportunities, and a more sustainable lifestyle has resulted in migration away from the major metropolises to these secondary markets. As reported last month this trend is now global.
The broad picture indicates that the affluent are diversifying their portfolios. They are investing in both major cities and these new markets, but with clear differences being the smaller size of the properties they are purchasing and the amenities on their list of requirements.
It must be recognized that the affluent are an integral part of the movement to these new markets, after all, they are often the instigators looking to maximize the potential revenue for their corporations, personal businesses, or start-up entrepreneurial ventures.
Properties now need to be more than stopping off locations for a week here and there, they have to offer the full home experience allowing executives to live, play and work – and bring their family and pets with them too!
New Groups of Influence
This year there has been a growing acknowledgment of the power of the millennials. This group, which is anticipated to overtake baby boomers in numbers by the end of 2019, is also a generation set to inherit the greatest wealth by 2030. According to a recent report by Coldwell Banker Global Luxury, this figure is estimated at nearly $68 trillion.
Millennials may have initially been slower to accumulate wealth and partake in homeownership than previous generations, likely due to the 2008 recession. But research now shows over 92% of millennial millionaires are homeowners who recognize that real estate is a way to build wealth. Their influence will continue to be profound and is already being translated when we look at the significant changes in the types of properties, locations, and amenities in demand.
Terms such as Hipsturbia have arisen, as downtown cores have become too expensive, so they have been replicated in many suburban communities. The concept of live/work/play in a vibrant, evolving neighborhood has proven to be a success – especially amongst the millennials.
At the opposite end of the spectrum, baby boomers are also wielding their influence as life expectancy has risen by 25 years during the past century. Scientific advances in medicine and healthier lifestyles have resulted in a generation who is still independent. Research shows that a return to downtowns, even hipsturbia communities, and multi-family properties saw a significant increase in demand from this demographic. This group is selling their larger suburban properties and looking for city convenience, with walkability and amenities in easy reach.
Health & Wellness
In the midst of a world where speed and instant gratification are at a touch of a button – there has been a growing recognition for a need to find time for relaxation in a home that embodies a sense of wellness.
Consumer demand for wellness in their homes and communities has grown exponentially as well as globally in 2019. The increased attention paid to tackling today’s uniquely modern problems such as poor air, water and lighting quality, sedentary lives, unhealthy diets, stress, social isolation and loneliness, pollution, nature-deprivation, has created powerful opportunities.
Leading builders, developers and affluent investors in real estate recognized that this was not just a hot new trend but a growing necessity that needed to be incorporated into both our lives and work environments.
As a result, there has been an increased emphasis to build real estate that is eco-sensitive, providing environments that offer well-being, natural elements, and healthy amenities.
From custom-designed homes and new condominium buildings to planned residential communities, the inclusion of wellness structurally as well as in the design, features and amenities has fast become synonymous with the “rule rather than the exception” especially for affluent in their real estate choices.
The Natural Way – Design Impacts
In keeping with the importance of living holistically, 2019 integrated the ‘less is more attitude’, with a shift to more multi-functional spaces. 10-car garages were transformed in shareable space for ‘toys’ for outdoor activities, gyms and swimming pool areas were re-energized with the addition of calm spaces for meditation and yoga.
Plants became significant again with big, bold plants in homes, terraces and rooftop gardens. So too, did the use of big, bold colors as splashes of vibrancy on natural palates, but with a recognition to creating a sense of balance. Bold was paired with neutral hues of white and grey as either statement pieces or accents.
One of the biggest nods to holistic wellness was the integration of natural woods, textures, and terra cotta colors, which were added to walls and increasingly to ceilings – adding character or that ‘wow’ factor to the 2018’s monochromatic modern finishes.
Perhaps in appreciation to our society’s change towards gender bias, the inclusion of mixing masculine and feminine elements within a room to achieve a balance became a strong designer theme. Dark tones, bold designs, and heavy leather were mixed with light colors, clean lines, and delicate fixtures.
Trends for 2020 forecast a continuation of these trends with neutral colors moving from cooler shades to warmer tones, two-tone color palates that incorporate the yin and yang of life, and geometric patterns becoming featured on walls and ceilings, all the while maintaining a sense of balance.
The art of selling and buying in this market needs a critical and analytical approach, understanding the realities and setting expectations accordingly will ensure that goals are achieved. The most lucrative real estate niches largely depend on market trends and shifting buying interests, but there are always long-term money makers.
For homeowners looking to sell their luxury home in today’s market, we recommend working with a realtor who can capitalize on the preferences of current investors. By carefully focusing on the lifestyle-specific niche your property offers and highlighting amenities in line with trends, it can be marketed effectively to connect with the right potential buyers.