Luxury real estate agents should start 2017 with enthusiasm — they have reason to be optimistic about their sector.
This year will bring its share of exciting developments, innovative design, progressive trends and brand new technology to the high-end real estate market.
There is never a standstill in this upscale industry. Here are four reasons why it will flourish.
1. New mortgages
During 2017, it will be easier for buyers to finance their luxury real estate purchases.
Beginning this year, government-owned mortgage companies Fannie Mae and Freddie Mac will provide backing for larger mortgages for the first time in more than 10 years.
2. Foreign buyers
International buyers still want U.S. luxury property, and they are expanding their horizons.
Foreign purchasers continue to seek out luxury real estate in major American centers. Yet they are also showing interest in high-end homes in other metropolitan regions across the nation.
International buyers are going far beyond their own borders to find safe investments. Like any homebuyer, they look for affordable prices and the best return, including long-term growth opportunities.
Foreign purchasers crave the luxurious lifestyle and ultimate security that come with a high-end home in an affluent neighborhood.
This wealthy group is not expected to lose interest in U.S. luxury real estate anytime in the foreseeable future. Both Europe and the U.S. will continue to attract increasing amounts of foreign capital, especially from Asian buyers.
3. Historical growth
During the next 12 months, the ultra-luxury market should see more affordable prices.
Keep in mind that consistent and steady growth is a good thing. Indeed, this circumstance follows frequently behind periods of high asking prices and decreasing absorption numbers.
4. Post-election period
Following all the preoccupation and distractions that emerge during any election period, things return to a more leisurely pace after a campaign and its results.
The post-period becomes a time of restoration for the campaign-weary when one’s thoughts turn closer to home. A final resolution can restore certainty to a sector, and uncertainty can be replaced with new development.
Toward the end of 2016, there was a spike in contracts for New York City real estate valued at more than $4 million. According to the weekly Olshan Luxury Market Report, the last week of November recorded a $371.6 million year-high for contracts in the Big Apple.
As well, the Olshan Report for the first week of January noted that 26 contracts of $4 million or above were signed during that period in New York City.
This data makes January 2 through 8, 2017, the best first week of a new year in three years for ultra-luxury residential properties in New York City. In addition, more development is expected in the lower end of the luxury market.
Elsewhere in the nation at this time there is also a robust market, for example, in Miami. Of course, waterfront real estate enjoys consistent popularity, but now non-beachside mansions are equally attracting the eye of the luxury buyer.
Kevin M. Leonard is the founder of Luxury Agent and Valore Group. You can follow him on Twitter or LinkedIn.