Forbes, December 2019 - Ellen Paris Contributor
Here’s the 2020’s update on the luxury residential market. Look to Millennials to give the luxury segment a boost over the next decade as their wealth increases along with the desire to own luxury real estate. According to coldwellbankerluxury.com’s, A Look At Wealth 2019: Millennial Millionaires, “By 2030, Millennials will hold fives times as much wealth as they have today and are expected to inherit over $68 trillion from their predecessors.”
Around the U.S. high-end golf and country club communities are investing major dollars in renovations and upgrades to include wellness and spa facilities and expansive first-rate fitness centers to appeal to Millennial buyers.
Luxury residential real estate is very market-centric. Defining luxury varies around the country and the world. Stephanie Anton president of Luxury Portfolio International, the luxury marketing division of Leading Real Estate Companies of the World is well versed on global luxury markets. “From speaking with our Members, the luxury market is softening but it’s not as bad as the media portrays it. I don’t think anyone feels the luxury market overall in 2020 will get worse, though we probably won’t be seeing major improvements.”
Anton points to the election year coming up which does create a kind of wait and see attitude in the high-end market. One segment that did well last year according to Anton is the luxury and ultra-luxury resort market. Affluent international and U.S. buyers often pay cash when they decide owning a $5 million condo in Miami or Aspen would be fun for the family. “Those consumers want large and luxury properties and are willing to pay for them,” Anton adds.
Sotheby’s International Realty is long associated with luxury properties. Philip White, president of Sotheby’s confirms how the luxury market differs from location to location. “I run 43 offices in 12 markets and they are not the same. Based on the last three months, we see real estate values correlate with the stock market.” In February 2019, Ralph Arias of ONE Sotheby’s International sold the most expensive single-family to date for over $50 million on Miami’s exclusive Indian Creek Island.
“Because of the tax laws now we are seeing a lot of wealth moving to Florida which has increased transactions for us. I do think we will see more of that in 2020 which creates additional opportunities for us to do deals,” White notes.
Ryan Gorman, Coldwell Banker’s incoming CEO talks about luxury market segments moving forward. “We see ongoing global appeal in Beverly Hills and Miami with the ultra-high-end, being a buyer’s market. Sellers in those markets need global exposure with astute pricing.” As Gorman points out often luxury buyers are not local so making a strong first digital impression is key.
Diane Cookson, the #1 Agent at Prominent Properties Sotheby’s International Realty Saddle River, New Jersey office and a top Bergen County Realtor knows the luxury market there well. “I see buyers looking for homes that are new construction or totally redone. Those are the properties that will most likely receive multiple offers and some over asking price in 2020.” Upper Saddle River’s luxury market is in the $1.2 to $4.5 million range while Saddle River where most properties are on at least two acres run from around $1.5 to $11 million according to Cookson. “I’m positive about the luxury market for 2020 especially where we see new construction that puts the seller in the driver’s seat.”
Whether you’re a buyer or a seller in the luxury market 2020 holds opportunities.