As housing needs change, some buyers turn to luxury properties to find their dream home. For some, that means a spacious waterfront house. For others, it means a condo at a desirable city address, close to the arts, entertainment, shopping and dining they enjoy.
If you own a luxury home, that interest raises a practical question: Could selling fit your plans? If you are buying, the question is just as personal: What does a luxury home need to offer to be right for you?
Start by understanding what defines this category, what a luxury market report says about buyer demand, and what you should ask before making a move.
What Makes a Home a Luxury Property?
According to Investopedia, a luxury home is not defined by price alone. Location is also an important factor, along with some of the finest features available in the home itself.
That definition leaves room for different kinds of properties. Luxury does not have to mean one particular home style or setting.
A Desirable Location
A condo at a sought-after city address can qualify as luxury housing. So can a spacious home on the water. Access to high-end activities and amenities, including arts and entertainment, shopping and dining, can also be part of the appeal.
Rather than focusing only on the asking price, ask what draws you to the location. Is it the waterfront setting? The city address? The ability to enjoy the activities nearby?
These questions bring the definition back to your own needs. Which parts of the location would you actually use and enjoy, and which simply sound appealing in a listing description?
High-End Features
The home itself also matters. Luxury properties boast some of the finest features available, not just a desirable address.
When considering a property, separate the features you truly want from those you could do without. What would make the home feel like the right fit? What would you miss if it were not there?
The point is simple: Evaluate the location and the home together, rather than treating price as the entire definition of luxury.
What the Report Says About Luxury Home Demand
The Institute for Luxury Home Marketing’s Luxury Market Report described a substantial increase in luxury home purchases across the two-year period it examined.
According to the report, North America recorded the fastest growth in demand during the first year of that period. Demand continued to increase, and the report also cited higher sales volume in an April year-over-year comparison.
Those findings describe the period covered by the report. They should not be read as a statement that demand is equally strong whenever you decide to buy or sell.
For a homeowner, the useful takeaway is a question to investigate: How much interest is there in luxury properties in your area when you are ready to make a move?
What Was Behind the Increased Interest?
The same report connected heightened luxury housing demand with growth in the number of people reaching a particular level of wealth.
It described two groups contributing to that interest: people newly entering the high-net-worth category and existing affluent buyers seeking additional properties.
More People Reached the Wealth Threshold
In the first year examined, the number of individuals with more than $5 million in net worth grew by 2.2%. In the following year, that growth reached 19.8%.
The report said the total increase brought more than 660,000 additional individuals into that high-net-worth bracket. It identified this expansion as a contributor to increased interest in luxury housing.
These figures help explain the demand described in the report. They are historical findings, not a forecast of how many buyers will be interested in a particular home.
Existing Affluent Buyers Added Properties
The report also pointed to existing affluent buyers who wanted to diversify their real estate holdings and add properties to their portfolios.
Combined with the expanding high-net-worth population, that interest helped explain the sharp increase in luxury property demand during the period studied.
In other words, the report did not attribute the increase to just one group. It described both newly wealthy individuals and established affluent buyers as part of the picture.
What to Consider Before Selling a Luxury Home
If you are thinking about selling your current house or changing your real estate portfolio, strong demand could make listing worth considering. The original opportunity is straightforward: Selling may be appealing when buyers are actively looking for properties like yours.
But do not assume that a broad report answers the question for your home. Before deciding, ask for a discussion focused on your area and your plans.
- How strong is demand for luxury homes in my area?
- How does my home fit the luxury category through its location and features?
- What would I want to accomplish by selling?
- Am I planning to buy another home or change my property holdings?
- What information do I still need before deciding whether to list?
Use those questions to guide the conversation, rather than starting with the assumption that you should sell simply because luxury housing has experienced strong demand.
What to Consider Before Buying
If changing needs have you looking at luxury housing, return to the reasons you started searching. Are you looking for more space, a waterfront setting, a desirable city address or access to particular activities?
Write down your priorities. Then compare each property with that list. Does the location match what you want? Do the home’s features reflect your needs? Are you drawn to the property itself, rather than just the luxury label?
Your Next Step
Luxury housing brings together location, high-end features and the goals of buyers whose needs or property plans are changing. The report provides context for increased interest, but your decision deserves a conversation about your own situation.
Make a short list of what you want your next move to accomplish. Then reach out to Ed Parcaut to discuss your homeownership and mortgage questions, and what to explore before buying or selling a luxury property.
