Luxury real estate is not only about elegant surroundings, excellent amenities, expensive furniture, and a balcony with a view. It’s a lifestyle. Whether you’re purchasing the penthouse in a condominium building or a villa, it’s the experience you’re actually after.
This means proximity to prime shopping and dining areas, excellent schools, work places, safety, security and other perks. No matter the price tag, the privilege of residing in a luxury home of your choosing, in the location that you want, and with the amenities you require remains priceless as ever.
Here’s what to expect in the luxury real estate market in 2022:
Higher prices
Luxury inventory can’t meet demand. Prices of luxury homes rose by 14.7% in 2020 to 2021. Median prices for luxury properties sold in October 2021 rose 23% for single-family houses and 14% for attached houses.
Homes worth $1 million to $5 million sold 68.9% more during the first 10 months of 2021. Median number of days on the market dropped by 38 days – the biggest across all housing types. But none of these dampened the desire of luxury homebuyers from snapping up properties. The trend continues in 2022.
Continuous demand for South Florida real estate
The pandemic fast-tracked demand for luxury real estate along South Florida’s coastline as buyers from New York, New Jersey, and California sought better price tags in areas such as South Florida (which don’t require income taxes as well).
Buyers were also drawn by South Florida’s eternal sunshine, beaches, and outdoor lifestyle. No wonder South Florida’s home values rose more than 50% and Miami’s luxury homes skyrocketed 101.1% from 2020 to 2021. Miami rentals increased 31% from 2021 to 2022.
Beachfront homes, valued at $4,000 per square foot, are the hottest. Bigger condos and penthouses are also in demand since buyers view them as alternatives to single-family homes.
Low inventory
Housing inventory remains low as competition from rising demand for luxury properties continues to heat up. Another reason for the low inventory is the construction slowdown due to supply-chain issues. Fewer luxury homes were built and acquiring such properties became a challenge. Thus, even specialty properties such as private enclaves, well-maintained historical sites, and second properties are just as hot.
Relocations
Low luxury home inventory has hit big cities. This has shifted attention to emerging locations away from urban areas. Now that the work-from-home set-up is a lifestyle, most luxury property purchases will come from residents of L.A., Miami, and New York. These affluent buyers want less saturated markets.
Bigger spaces
Remote or hybrid work has led to more housing options and the need for multipurpose space. Walls are being knocked down and more rooms are being built in the name of expansion.
Shifting demographics
The market for luxury properties is getting younger. In fact, this generation of wealthy consumers will account for 70% of the luxury real estate market by 2025. This demographic has new priorities and preferences in high-end appliances, gadgets, elegant furniture and finishes. This tech-savvy generation, active users of social media, seek opulence because they see it in online platforms.
Sustainability
Green living is bigger than ever. More people are using natural materials like rock, timber, sand, and recycled materials for walls. LED lighting, solar roof panels, vegetable gardens, and features that mitigate climate impact while retaining that luxurious feel, are also on trend.
Smart homes
Smart home systems that lower emissions, save energy, and have net zero carbon, are on the rise. Remote-controlled appliances, smart thermostats, technology-driven lawn irrigation and security monitoring, light sensors, and insulated windows are other examples of sustainable practices.
Changes in square footage
Location is king when it comes to luxury homes. Amenities aside, one can buy a home more than twice the square footage in Miami than one can in New York. For instance, $1 million can buy a 915-square-foot home in Miami. The same amount can purchase only a 366-square-foot of luxury property in the Big Apple. Naturally, buyers are moving to states where they have more purchasing power while enjoying big city perks. They go where there are tax advantages.
Multiple residences
Almost 70% of those whose net worth is $5 million own two or more properties. Lines separating primary and secondary homes are blurred. The wealthy spend more time in secondary homes (especially in balmy South Florida) and buy new properties.
To help you find some of the best luxury homes in South Florida, call the The Telchin Group, LLC at 561.301.0249 or contact us here.