The unprecedented changes of 2020 have touched every aspect of people’s lives. Luxury real estate professionals have found themselves in the center of these changes as the affluent turn toward home this year.
Today’s agents bring indisputable value to their clients who depend on their knowledge and connections to make crucial life decisions for their families. Their ability to respond proactively to shifting needs, adopt new procedures for completing real estate transactions safely and pivot to virtual technologies suggests that they have an even more critical role to play in their clients’ lives and livelihoods, now and in the future.
From expertly guiding clients through the process of scouting new locations and properties to quickly integrating virtual showings and storytelling tools into their marketing strategies, the agent has proven to be an invaluable part of their clients’ lives this year — saving them time, money and anxiety.
The luxury real estate market started from a position of strength in 2020, after an exceptionally strong finish at the end of 2019. The Institute for Luxury Home Marketing reported that the end of 2019, according to Realtor.com’s Chief Economist Danielle Hale, saw million-dollar sales increase by 11.4% year-over-year and the overall entry point for luxury increased by 2.1% to $1.27 million.
The Institute for Luxury Home Marketing reported that at the end of the first quarter for 2020, the median price of a luxury property had increased to approximately $1.4 million for a single-family home and $900,000 for an attached property.
A short “pause” during April and early May 2020 was then followed by the start of a surge of pent-up demand in mid-May and June. Major lifestyle changes are thought to be responsible for a rise in demand for larger single-family homes in locations that can offer more space and greater freedom. The median price of a single-family luxury property increased 4.8% since January 2020, reflecting this shift in lifestyle preferences.
The number of sales has also grown exponentially each month since May, while the average days it takes to sell a property has continued to drop. This has been compounded by unprecedented low inventory levels, approximately 30% lower than the comparative period from May to August 2019.
Conversely, the number of sales for luxury attached properties during July and August are back to normal levels when compared to 2019 figures, despite becoming less popular at the start of the pandemic. Inventory numbers have continued to climb since April, but notably are still 12% lower month-over-month compared to the same period in 2019. This may point to the trend of the affluent keeping their metropolitan townhomes or luxury condos (for now), even as they purchase larger single-family homes in less urban areas.
For more on what’s driving these trends, read the complete 2020 report, “A Look at Wealth: Affluent Trailblazers.”