Luxury real estate is experiencing a shift out of neutral as we step into 2024. The market is brimming with renewed hope and enthusiasm among high-net-worth consumers, setting the stage for a renaissance in the world of luxury living. According to Coldwell Banker Global Luxury's "The Trend Report" and luxury consumer survey, there is an increased sense of optimism among luxury consumers, with over one-third believing that 2024 will be a better time to buy or sell a home compared to the previous year. Furthermore, a robust 68 percent of respondents agree that real estate is a safe investment.
Wrapping up 2023 strong
The luxury real estate market ended 2023 on a high note. In the fourth quarter, there was a remarkable surge in sales, with single-family homes experiencing a 4.2 percent increase and attached properties soaring by an impressive 14.2 percent compared to the previous year. New listings also saw significant growth during the same period, rising by 14.2 percent for single-family homes and 7.2 percent for attached properties. These figures signify a rejuvenated interest in luxury real estate and set a positive tone for the industry.
America: A Real Estate Investment Haven
For the global elite, U.S. luxury property remains a means of asset diversification and investment. International buyers in the top 5 percent of the market witnessed a substantial 25 percent growth in 2023, highlighting the enduring appeal of luxury real estate in the United States. The top international buyers came from China, Canada, and the United Kingdom, and the most desired U.S. cities for purchase are New York, Los Angeles, Miami, San Francisco, and Washington, D.C.
At the same time, wealthy Americans are exploring opportunities abroad. Nearly 40 percent of survey respondents plan to buy a home in a foreign location within the next year, and two-thirds of affluent consumers intend to purchase a home abroad within the next five years. Europe takes the lead as the top destination (29 percent), followed by North America outside the U.S. (28 percent) and the Caribbean (23 percent).
Social Media's Impact on Luxury Buyers
In the modern age of pixels and hashtags, social media plays a pivotal role in shaping the preferences of luxury homebuyers. Surprisingly, a staggering 73 percent of affluent consumers admit to being influenced by social media when deciding to purchase a particular home. Instagram, YouTube, and TikTok have emerged as the top social media platforms where luxury consumers seek dream home inspiration.
TikTok, in particular, has become a powerhouse for younger generations aged 18-24. Sixty-four percent of them acknowledge its influence in their desire to purchase a specific type of home. The platform's bite-sized videos and virtual walkthroughs have proven to be effective tools for millennials and Generation Z to connect with real estate agents and gain insights into the housing market.
Have-it-all Properties for Selective Buyers
In a world where compromise whispers uncertainty, luxury consumers stand tall, unwavering in their pursuit of perfection. Affluent buyers prioritize privacy, breathtaking views, and ample garage space as their desired amenities. Location is top-of-mind for 45 percent of luxury respondents, closely followed by price at 39 percent.
Today's discerning buyers seek properties that offer more than just the basics. They prioritize location, privacy, wellness amenities, lifestyle experiences, and cutting-edge technology. To meet these demands, four specific property types are expected to check all the boxes for selective buyers this year: "Of the moment" luxury homes, vertical country clubs, branded residences, and golf-lifestyle hybrid communities.
A Year of Optimism
After a challenging year marked by high interest rates, housing shortages, and conflicting consumer sentiment, the luxury real estate market is poised for a transformative journey. As we embrace 2024 as a year of optimism, the market stands ready for a new narrative guided by consumer confidence, dynamic trends, and evolving preferences. The threads of hope are weaving together to define the future of luxury living.
For a detailed exploration of "The Trend Report" and survey results, visit Coldwell Banker Global Luxury.