2020 Luxury Market Forecast
At the end of last year, many homeowners found themselves with more equity in their homes than they expected, while at the same time their wages were on the upswing. Uniting those two factors has sparked more than a few homeowners to think about making a move to a larger or more luxurious home. That being the case, now is a perfect opportunity to take a look at the forecast for the 2020 luxury market.
Three Things to Think About in the 2020 Luxury Housing Market
1. Prices
The U.S. economy is strong today, with buying opportunities throughout the luxury end of the market. Thomas Veraguth, Strategist at UBS Global Wealth Management, says in Barrons.com,
“There’s a good link between luxury real estate prices and [economic] growth.”
Available inventory is a key element that can impact home prices. In the upper price range, there are more homes available per buyer than in the entry-level market. This makes moving up to a luxury home a very real option for many buyers.
2. Activity in the Market
With more buying opportunities at the higher end, we should start to see an increase in activity. The same article states,
“Affluent home buyers will start to come out of the woodwork as they find rising luxury rents less appealing and sellers get even more negotiable on price.”
Buyers looking in the luxury market are taking the opportunity to negotiate on price in a segment where there are more choices, too. According to the Luxury Market Report, homes sold for an average of 96.94% of the list price in December.
In addition, the sustained low-interest rates mean that Luxury Buyers are also getting more for their money.
3. Buyers Are Coming Back
Keep in mind, many buyers are sellers too, especially those looking to move up. Homeowners with an entry-level home can take advantage of the inventory shortage at the lower end of the market, thus driving higher sales prices for their current homes. Combined with growing equity in the homes they’re listing, it’s a great time for those who are ready to make a luxury move.
The extra equity and greater purchasing power are bringing many buyers back to the market. The same article mentioned that,
“We’ve already seen buyers who’ve been on the sidelines for two years tread back into the market.”
Bottom Line
If you’re considering entering the luxury market, 2020 is shaping up to be a great year for those who are ready to make that move. Let’s get together to set your real estate plan for the year.
