As the economy recovers, luxury properties are very much in demand, particularly in large urban areas. Homes or vacation properties worth $1 million or more are selling quickly, often at or just below asking prices. And they’re taking the housing markets in many areas along with them.
It’s been a long haul. While in the largest North American cities the luxury market never totally disappeared, during the worst of the recession many buyers were holding on to their properties. The result has been a shortage of inventory, which is pushing prices up. As of mid-October, the S&P/Case-Schiller home price index showed major growth in the average sales price of homes across the U.S.
Foreign investors have also been spurring on the market for luxury properties, as Asian buyers, in particular, look to North America to invest: Many are putting their money into the real estate market.
As noted, luxury buyers usually look to large urban areas to purchase homes, while those looking for a getaway often look north to cottage country, or south to warmer climes. Areas located near big cities offer the best of two worlds: These neighborhoods provide easy access to transit and highways for commuters and nearby shopping, restaurants, and entertainment venues, as well as good schools, safe communities, park-like settings, and elegant homes.
According to recent research, upscale purchasers still believe home ownership is a great investment. So luxury homebuyers are prepared to spend time, money, and energy on a house that reflects who they are.
While size matters, it’s increasingly less important than upgrades and amenities such as larger lots, pools, and high-end landscaping. Outdoor living rooms, chef’s kitchens, spa bathrooms, and spacious garages are also important. As owners renovate and re-build, the economy receives a boost. Small wonder the luxury market has a stimulating effect on real estate markets and the economy in general.