Luxury Homes on the Rebound
Contributing Writer: Thomas Schoenbeck
"Activity has begun to emerge from a short hiatus"
As expected, luxury homes in the US took an expected dive in March and April as most of the country came under statewide stay-at-home orders.
Domestic clientele decided to hold back, and with many other affluent countries facing similar restrictions, the pool of international buyers began to expectantly evaporate.
Sellers started to take their homes off the market, further eroding purchase opportunities. In recent weeks however, activity has begun to emerge from a short hiatus and industry leaders expect sales will begin rebound by this summer.
At the outset, some real estate experts predicted luxury home sales would drop by as much as 40%, but the Institute for Luxury Home Marketing finds the actual drop between 20% to 25% rate in comparison to the same time last year. Some agents in some luxury markets are experiencing pent-up buyer demand and believe there will be a surge of sales once consumer confidence takes hold.
As reported in Barrons, the overall housing inventory was down 4% in May compared to April, however the home demand in the million dollar and above range rose by 1%. As a result, home sellers are once again listing their properties. The uptick in sales can be due in part, purchasers are wanting to leave high population areas in search of quieter enclaves. While there will continue to be a demand for city properties, the demand for rural havens can't be overstated. Buyers tend to feel more secure in less populated locales and believe there is a certain stress level they can live without. Vacation homes will rebound, niche localities such as beaches and waterfront homes will most likely see a growing demand, and even those areas far removed from populated towns, will see a resurgence of activity.
For those looking for vacation spots, those move-in ready properties will move much quicker than before and those with updated amenities and high speed internet will be at the top of the list. As experienced during the recent pandemic, industries and business owners have learned they actually can work from home and with the same results as being in the workplace. Those buyers who can continue working in this manner, will need high speed internet and mobile access.