Luxury real estate is generally doing so well right now that it’s outpacing the broader housing market, though the pandemic is also creating permanent changes in the way high-end consumers think about property, according to Leverage Global Partners CEO Eric Balog.
Balog took over the top spot at Leverage in May after spending nearly three decades working in finance, startups and investing. Since then, he has been tasked with guiding the company, which provides agents with a global network generally focused on high-end real estate, through the unprecedented times of a pandemic.
But while the pandemic has certainly been disruptive, it does not appear to have sapped consumers’ appetite for luxury real estate.
“I would say that broadly, in the U.S., we’re seeing luxury up across the board,” Balog told Inman. “And it strikes me that that’s because there’s historically low inventory, and historically low interest rates combined with that.”
There are exceptions to this trend. The high-end market in New York City, for example, is seeing some softening. But Balog said that overall luxury generally is thriving.
“What we are seeing is, if you look nationwide, there seems to be a constant level of demand,” he continued. “So if the market has cooled in New York a bit, the buyers are emerging elsewhere in the country. The transactions are still happening in aggregate across the U.S., it’s just that they’re getting more concentrated in certain regions than others.”
Balog added that mountain towns in particular have been the big winners of this trend.
“Nothing is outpacing the mountain towns of the Mountain West right now,” he explained.
This trend, in which buyers are moving from historic job centers to lower density areas has been well documented and much debated during the pandemic. In Balog’s case, he said he doesn’t see an “exodus from urban centers,” but rather a rising shift in which buyers prioritize quality of life concerns and accordingly “people are taking one more step further” from major cities.
Balog also expects preferences to permanently shift thanks to the pandemic.
“I do believe that there’s a lasting impact to this,” he said. “Perhaps for the first time in their lives, some people are reevaluating their priorities and determining how their personal space should reflect those priorities. I think a piece of that will always remain.”
Among other things, Balog also said that foreign buyers remain interested in the U.S. real estate market. That’s significant because the pandemic has significantly reduced global travel, and while other industry experts argued in May that foreign buyers wouldn’t disappear, it was always unclear how exactly the situation would play out.
But Balog said that from what he’s seeing, foreign buyers are now “focusing more on the financials than on the qualify of life elements” when choosing to invest in real estate. Either way though, he added that “we are still seeing interest from foreign buyers.”
“I think that our early data suggests that volume will return to previous levels,” he said, though he added that prolonged travel restrictions could impact demand.
Overall though, Balog’s comments further hint at real estate’s remarkable recovery over the course of the pandemic. Though the market did slow down in the early stages of the outbreak, the following months saw agents becoming increasingly busy, and the explosion of bidding wars.
Balog’s observations in the time since he took over as CEO of Leverage further show that even at the higher end of the spectrum, the market has surged back to life.
“It’s outpacing the broader market,” he ultimately concluded of luxury real estate.