Markets & Economy

Luxury real estate and the stock market — a surprising discovery

The correlation is no temporary trend
  • Equities and high-end real estate have something in common.
  • Buyers' perception of the economy has a significant impact on the luxury real estate market.
  • Several factors can affect the future of luxury real estate.

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A quick increase in equities will affect different sectors of the economy. When stocks do well, other elements respond in a similar manner. For example, within the last seven years, the rise in equities led to an increase in sales of luxury real estate (properties with a value of a million dollars or more). The correlation between stocks and upscale property sales is not just a passing trend. This connection appears to be a constant in the modern market. Luxury real estate is not immune to the influences of an economy's financial state or consumer trends. A rise in luxury According to CoreLogic, a premier supplier of worldwide data, high-end property usually accounts for 1.2 percent of all residential sales. Yet by the stock market's peak in spring 2015, the percentage of luxury home sales had doubled -- and remained that way -- for the rest of the year. Obviously, confident buyers were a major force behind this renewed activity in luxury real estate. Increased wealth en...