October is Luxury Month at Inman. All month, we’ll be talking to top producers from across the country, offering advice on how to join their ranks, and more. That all leads up to Luxury Connect at the Aria Hotel (Oct. 25-26, 2021, join us) and the live presentation of the Inman Golden I Club honorees for this year.
From Los Angeles to London, in the past year, real estate markets have experienced unprecedented demand. As cities opened up and people strived to return to their “normal” lives, the luxury sector continued to boom.
At the end of 2020, Forbes reported luxury home sales were up over 60 percent from the previous year. As a luxury real estate agent, navigating clients through bidding wars and record-low inventory requires skill, knowledge and confidence.
Whether you are an agent aiming to break into the luxury market or an established agent with a thriving business, here are three things to know about the current luxury market.
1. High demand into winter
Thanks to the low interest rates and newfound flexibility of remote and hybrid working schedules, luxury buyers are continuing to upgrade to larger homes and seek multiple properties to suit their particular needs.
While many flocked outside major cities at the start of the pandemic, as people return to the office (at least part-time), there will continue to be a strong interest in both primary and second-home markets.
The tight-inventory luxury markets across the nation will only continue to fuel fierce competition. While fall and winter usually mean less market activity, there seems to be no slowing down this year.
As a luxury agent, it’s your responsibility to stay up to date on all market shifts and trends, and serve as an invaluable resource to clients. Stay informed by consistently reading market reports and data from reputable sources.
If you represent a client on the sale of their home, study your market’s latest inventory, and brush up on market comparisons. Within all price points, inventory is extremely tight, and prices will continue to appreciate as a result. Pricing should reflect the current inventory and level of demand.
2. The return of the international buyer
While many markets have remained strong over the last year, the return of the international buyer will only increase the activity luxury markets are experiencing.
With travel restrictions decreasing, and the U.S. continuing to be a draw as a solid financial investment, the rise of foreign investors will lead to a busy upcoming season and new year. As travel restrictions continue to lift, this winter will likely bring investors from overseas, which will only further drive competition and price increases.
With a new potential crop of buyers, luxury agents should encourage their clients to prepare well in advance, including checking in with everyone involved in the buying and selling process — from the financial team to legal counsel.
Encourage clients to be patient through the process but prepared to make an offer. Remember, cash remains advantageous over financing. And the simpler the purchase agreement, the higher chance your client will come out ahead.
3. The need for turnkey properties
Today, given the high construction costs and a shortage of materials, encourage sellers to make their homes as turnkey as possible. In the high-end market, buyers seek homes that are updated and even fully furnished.
This allows luxury buyers an easier transition to and from their city and country homes. Keep this in mind as you guide clients through putting their homes on the market.
Strategic interior improvements will ensure a more positive first impression and increased interest from buyers. As buyers seek more flexibility in a home than ever before, consider staging a listing to show off the potential of every room.
Can the guest room be turned into a wellness studio? Can the garden be elevated to enhance the outdoor space and connection to nature? As a luxury agent, keep ahead of what buyers search for most in a home and prepare clients accordingly.
Keeping these indicators in mind will allow you to become an invaluable resource to clients. As agents navigate these unprecedented times, stay educated and informed about everything happening in your market. Staying ahead of market trends will keep you ahead of the competition.