Luxury Real Estate Report: July 2023 – Navigating the Luxury Real Estate Landscape
At RE Luxe Leaders, we’re passionate about digging into the data to spotlight trends that empower you to make savvy business choices. Interestingly, we’re observing a tale of two markets as opposed to one national trend. The luxury market power centers are evolving, driven by the migration of wealth over the past year.
As a seasoned leadership consultant in the realm of real estate, our work at RE Luxe Leaders revolves around unearthing valuable insights from data and translating them into strategic action. Today, we want to share with you some intriguing findings from our recent analysis of the luxury market. What we’re seeing is not a single, uniform national trend, but rather a tale of two distinct markets, each with its own unique dynamics. Over the past year, we’ve observed a fascinating shift in the epicenters of the luxury market, driven primarily by the migration of wealth.
Unmasking the Pinnacles
Our journey begins with a look at the luxury housing landscape as of June 2023. Jupiter Island stands out with an impressive price of approximately $15,950,078, making it the city with the highest luxury housing prices. Hot on its heels are Hunts Point, Golden Beach, Atherton, and Manalapan, all boasting prices well above the $12 million mark.
Tracing the Footsteps of Growth
Moving beyond the surface, we uncover the growth patterns in luxury housing prices from January 2000 to June 2023. Here, Paia takes the lead, showing an astounding growth of approximately 938%. Telluride, Kilauea, Huntleigh, and Stone Harbor follow, all with growth rates soaring above 700%.
However, not all cities have seen such exponential growth. Kenilworth, Winnetka, Hunting Valley, Purchase, and The Village of Indian Hill have experienced relatively slower growth, with rates ranging from 26% to 71%. Despite being slower, these growth rates are substantial, bearing testament to the progress made over two decades.
The Two-Sided Coin of the Luxury Market
Our Luxury Real Estate Report reveals that the top of the national market has experienced a year-over-year decrease of 2.13%, with an average price of $529,335. This dip is largely due to fluctuations in California’s Ultra High-end market. While the Executive Class Luxe shows a year-over-year performance at -2.18%, the Luxe Class (properties valued at $2 million+) reveals a decline of -2.18%. Properties over $5 million are witnessing a drop of -2.2%. However, it’s important to remember that these trends vary widely from region to region and coast to coast.
New Horizons in the Luxury Market
In a promising development, 145 new areas crossed into the executive luxury threshold over the past month, indicating that the luxury market is stabilizing and prices are starting to climb again. Additionally, 31 new regions recently crossed the $2 million+ threshold, reflecting the continued wealth migration into these burgeoning power areas. Six new areas crossed the $5 million mark this last month. These are significant numbers not seen before.
A Look at the Bigger Picture
Long-term data offers even more reasons for optimism. The three-year average growth rate for luxury real estate stands at an impressive 35.46%, the five-year average hits a remarkable 42.66%, and the ten-year average is at a robust 77.82%. These statistics clearly show that luxury properties have consistently outperformed lower price ranges in terms of percentage return.
A Few Insights on the International Luxury Market
Current research on the international luxury real estate market offers several key insights. The core definition of luxury has significantly changed over the past few years, and ultra-high-net-worth individuals are now a significant driving force in the luxury home buying market. These individuals, with their diversified investment portfolios, will continue to have significant influence in the market in the coming years.
The intrinsic value of purchasing real estate has never been higher, with wealthy buyers being motivated by lifestyle changes and opportunities in the current market environment. We anticipate a high volume of international buyers, a growing influence among younger millionaires, and a continued appetite for secondary homes.
Ownership of multiple homes, both in the U.S. and abroad, is becoming a trend among wealthy individuals. 72% of wealthy buyers said their future home purchase would be a second residence, vacation home, or rental property. Notably, Gen-X and millennials are leading the way in this trend. Furthermore, the propensity to own a home abroad is on the rise due to the strength of the U.S. dollar and rising costs of U.S. living. Europe, Central America, and Asia are among the increasingly popular locations for these buyers.
Additionally, the number of global millionaires is at its highest point in history and is expected to surge by 40% by 2026. Major U.S. markets and traditional centers of wealth, continue to be a significant draw for affluent international buyers. Cities in Asia, such as Singapore, Beijing, and Guangzhou, have regained their position in the top global cities with primary and secondary homeowners as borders have reopened.
When it comes to the factors influencing the choices of luxury real estate buyers, property location, home condition, and amenities rank as the highest priorities. Open floor plans, bespoke architectural elements, neutral color palettes, and tech-friendly homes with automation systems, energy-efficient appliances, and electric vehicle charging stations are among the top trends.
Navigating the Luxury Real Estate Landscape
In the luxury real estate market, it’s all about identifying opportunities and staying one step ahead. By closely monitoring trends and leveraging the insights we’ve shared here, you’re positioning yourself for growth and success in this thrilling industry. Remember, in real estate, as in life, the key to success lies in understanding the terrain and charting your path with confidence and foresight.
Luxury Real Estate Report: Diving Deeper: Keynote Insights
Recently, we conducted a keynote presentation where we delved deeper into these trends. If you’re interested in gaining valuable insights from our research and analysis, you can access it here.
Looking for our latest 12 month forecast down to the zip code? Follow this link
Year over Year National Luxury Real Estate Report Map:
Here are the July 2023 Luxury Real Estate Report numbers for the data geeks:
Methodology for RE Luxe Leaders Luxury Real Estate Report
The data used in the report is focused on the top one-third of markets in the United States, and is collected on a monthly basis. The data is used to identify trends in luxury real estate at the area level, rather than focusing on individual properties. The report aims to provide insight into luxury real estate trends across the country, by analyzing data from the most affluent and desirable markets in the United States.
We divide and define the US National Luxe Real Estate into three categories for our Luxury Real Estate Report:
- Executive Class. Areas where properties currently average sold prices of $750,000 and higher.
- Luxe. Areas where properties currently average sold prices of two million dollars and higher.
- Ultra-Luxe. Areas where properties currently average sold prices of five million dollars and higher.
Luxury Real Estate Report: Parting Thoughts
We hope that the information provided is helpful in guiding you on your journey to building a thriving real estate business.
As luxury real estate consultants, coaches and advisors for Proptech, Fintech, Brands, Brokerages, Teams and Elite agents, we are confident that our resources, insights and strategies can help you achieve your goals.
Remember, success in the luxury real estate industry starts with knowledge and strategy, and we are here to provide you with both.
Here are some links to our more popular resources:
- Real Estate Insights from our luxury real estate consultants to help you out position your competitors
- Downloads and Tools To Accelerate the Growth of Your Real Estate Business from our amazing luxury real estate coaches
- Exclusive Luxe Real Estate Reports and Forecasts to give you an edge
- Luxury Real Estate AI Tools we have specifically trained to make your life easier