The world is taking notice of the luxury market, and it isn’t the vision we were once used to.
With a new generation of tech money, people are looking to put their money elsewhere than in
home ownership. Homes still remain an important symbol of success, its just that buyers are
rethinking how and were to put their investment. Within the US, many cities are seeing tax law
changes and the once booming foreign market is taking notice. In the last year, foreigners were
not as as active in buying real estate in the US. When researching why, both politics and local
city governances were responsible for the change. It is important to note, the luxury market has
not stopped, it has merely slowed down, as tastes in a new generation have changed. It is the
agents responsibility to guide the conversation with their sellers on how to position their home to
match these changes.
In areas where bigger and better homes once flourished, many are sitting idle or being torn
down to match the changing needs and landscape of major cities. High taxes in cities are
causing buyers to rethink specific locations. It also shows opportunity to developers, to turn
once owner occupied buildings into rentals. With the landscape of fortune 500 companies
moving many offices into big cost effective cities, such as Chicago, developers see the
opportunity for an increase in the rental market. On the flip side, you also have your millennials
choosing to buy 3 and 4 bedroom condos to raise families in the city. The culture is changing,
and the big home in the suburbs is seeing itself sit for a bit lately.
We aren’t here to tell you luxury homes are not selling, they are. The market has just shifted in
a way to where they just are not selling as fast as they once were. It is the responsibility of the
agent to set the expectations to the seller so they understand today’s buyer. Successful agents
must be on top of these changes to help market the luxury homes in their area to match the
demand of what the current buyer is looking for. The market has shifted towards a buyer market
where inventory is high, and has been sitting for longer than 4 months. Prices at this point
aren’t really being slashed too much yet. It’s just the time where you would see multiple offers
appear, has dwindled down. When the feds cut interest rates in the US back in July, we had
some hope of turning cities back into a multiple offer cities. To which, some saw success, just
not in the luxury market.
Despite a booming economy, the recent tax changes and political doings of the President of the
United States, have really turned the luxury relate estate market into what it is today. We are
going to keep politics out of this conversation, but recent tax laws and a lack of security from the
foreign market has contributed to the downfall of the luxury market. If you are a seller in this
market, be sure to work with an agent who can market above the haze and get your property in
front of the right buyers. What used to work, no longer works. If you are a buyer, you have an
increasing amount of inventory to choose from, so pick an agent who can work to get you what
you truly want. The good news, real estate is a long term play. The market doesn’t stay the
same for long, and this is just a season. It is good to be informed so you can play your hand
and still win the game.