Luxury Real Estate Market Booms Due To Pandemic Lockdowns
In 2020, stock market surges, lower interest rates and remote working resulted in heightened demand in the luxury real estate market during the COVID-19 pandemic. According to a report from Redfin, US luxury home sales rose 60.7% year-over-year from September to November, numbers unseen since 2013.
The increase nearly quadrupled the growth observed during the first three months of the year and exceeded the 14.8% increase in sales of mid-priced homes and the 6.8% increase in sales of affordable homes. The trend can be linked to the number of wealthy homeowners who are working from home during the pandemic and who need more space.
According to Anne Miller, RE/MAX Vice President, large homes are back in vogue. “In past years, clients were looking for convenience. They wanted walkable areas, and communities built around outdoor spaces, dining and downtowns.
“In 2020, we saw affluent clients going back to wanting more space. The more space they have, the more opportunity and flexibility to create the exact home they want.” In addition to wanting ample room for a larger home office, health and wellness is a top priority to luxury home buyers. Larger homes allow buyers to have room for wellness areas like yoga studios and meditation rooms.”
The pandemic has also motivated many city dwellers to seek out more remote locations where homes are bigger and there is more outdoor space. In New York City, countless residents left the area last year as the pandemic shut the five boroughs down. Those in executive positions found it easy to work remotely and were interested in creating a comfortable space to share with their kids.
Miller says that many of the tech markets are registering a demand for upscale homes. Denver, Dallas, Houston and Arizona especially have generated greater interest in luxury home sales in the last year. Although California is a tech hotspot, like NYC, Miller believes that Californians are favoring areas like Boulder, which offer wide open spaces.
In addition, Mansion Global reports that Florida has seen dramatic growth in the luxury housing market. The demand for more outdoor space, larger homes and good weather have drawn home buyers to Florida during the lockdown. The trend is expected to continue throughout 2021, depending on how quickly the ongoing pandemic is tackled.
Source: Forbes
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