Here is the May 2022 National Luxe Real Estate Report by the staff at RE Luxe Leaders. Each month we take a look at the US Luxury Real Estate Stats. Admittedly the numbers skew in luxury from pocket to pocket, but keeping an eye on the trends in a year over year, three, five and ten year gives us some very interesting insights.
We are still seeing a huge surge in the luxury real estate marketplace. As inflation markers tick up, those with wealth are parking cash in areas with higher yields. Real estate has been a huge beneficiary of this trend. We continue to see a migration of money from the higher tax and more restrictive states to lower tax states.
Year over year stats have the top of the national market up 18.30% to an average price of $496,254. The Executive Class Luxe is performing at 22.22% year over year. The Luxe Class of $2 million + is performing at 22.88%. Uber Luxe, those properties over $5 million, is performing at 24.22%.
We are seeing a softening of demand with inflation and rising interest rates in the lower price ranges. However, the softening is taking us from a frenzied market to one that is less so. Inventory is increasing and prices will start to moderate into a slower growth curve.
When we take a look at the various areas, we see longer term growth trends favor the coasts. Three year luxe averages are up 33.04%. Five year luxe real estate averages are trending at 44.10%. Ten year luxe real estate averages are up 72.07%.
Year over Year National Luxe Real Estate Report Map:
National forecasts for the next 12 months are expected to continue to grow in the double digits according to the data scientists. Most of this being driven by two macro trends. The first is demographic driven. The Millennials are entering their peak homebuying years. As a note, this group represents the largest segment of the population and the only group to outnumber the Boomers.
The second trend is money. The US printed approximately 30% of all the cash in the history of the country as part of Covid relief measures. Trillions of dollars poured into the hands of American in one form or another. The Fed took an aggressive stance, pushing interest rates to all time lows. Right now, we have an abundance of cash flowing, and no incentive to save it. When that dynamic happens, prices go up. Demand is outpacing supply in almost every sector. Real Estate is seen by many in the Luxury and investment spaces as “safer than cash” at the moment.
Luxe trends have us expecting 30%+ price appreciation in some key areas in the US. Our money is on both coasts of Florida, Austin, the Carolina coasts, Nashville, and the Idaho/Montana state lines. Of course, this is speculative. I won’t share our secret sauce, but I will say it’s our best educated guess based on a plethora of factors we think are relevant.
National Luxe Real Estate Forecast Map:
If you are interested in a deeper dive in your area, let us know. We love talking about luxury, both generally as well as the individual pockets and the unique drivers behind each one.
Here are the April 2022 Luxe Real Estate Report numbers for the data geeks:
2022-04 Luxe Report Data
We use the national data for the top 1/3 of each market in the US. While we generally recognize luxury at the property level, this report looks for area trends.
We divide and define the US National Luxe Real Estate into three categories:
- 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.