A new report released by Luxury Portfolio International (LPI) found that the chaotic real estate market created by COVID-19 is slowly stabilizing.
Luxury buyers are focusing more on what is important to them—more convenient locations, making wise investments and living an affluent lifestyle.
Here’s the state of the luxury real estate:
Supply, demand and pricing are beginning to balance out after a couple of years of real estate market frenzy. Buyers still outnumber sellers, but the gap is shrinking.
According to the report, although half of respondents are still concerned that COVID-19 will again shake up their lives, they’re easing up on their sharp increase in demand for new houses throughout the pandemic, with 38% fewer buyers.
Meanwhile, 71% of homeowners are convinced their property will increase in value over the coming year. The number of sellers are rising meaning inventory should finally start to catch up with demand.
Years 2020 and 2021 saw luxury buyers heading to farther and farther remote areas to escape pandemic fears and restrictions and gain some much-needed space while spending a lot of their time at home.
Now we’re seeing a shift in consumers returning to the cities and suburbs they fled. Per the report, a full 77% of luxury buyers say their next home purchase will be within commuting range of a major city, and 55% say it will be in one.
While previous years saw buyers’ main purchasing concern as more indoor and outdoor space, many home-buyers now say their next purchase will be as an investment (35%) or in search of a better place to live, be it neighborhood (19%) or city (10%).
Expect to see the beginning of luxury market stabilizing with a still strong demand for luxury real estate.
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