November Luxury Market Report

Did you ever think you would find yourself reading an article on "Pandemic Real Estate Trends"?

This year has been full of surprises.  The Luxury Real Estate market is fortunate to have seen steady growth for 2020.

Rather than fall apart, the luxury real estate market quickly adapted to the situation.  There is now a clear pandemic real estate trend emerging.  The real estate pandemic market is evolving as it begins to reach a state of more certainty.

There is a new demographic group forming, "Trail Blazers".  Trail blazers, like our forefathers are choosing housing locations based upon family, health, lifestyle.  They adjust that to their business or work proximity.  These "trail blazers" are one of a group composed of: Explorers, New suburbanites and Resort buyers.

EXPLORERS: (Trail Blazers)

they tend to be younger than 39.  They are ready to seek adventure outside the big cities and suburbs.  They want to stretch their dollar and they value life experience over status.

Explorers are more open to rural, non-traditional luxury markets.  Markets were open space, better schools and family friendly entertainment are easy to find.

As buyer's Explorers are looking for a luxury market professional who understands their wants.  They want all their surroundings to support physical, mental and spiritual health.  Besides being under 39 they have a net worth of $1-5 million, and 40% have one child.

NEW SUBURBANITES:

This group includes professionals who may not have full work-from-home capabilities as entrepreneurs, business owners or senior management.  This means an occasional commute to their location office.

They tend to be older, 39-54, with net worths between $5-10 million.  They are married with two or more school aged children. They are likely to spend on luxury purchases like sports cars, boats, art and upscale health and wellness treatments.  They show their preference to showy luxury.

As buyer's they are looking for bigger, more comfortable version of what they already have. They are not looking to explore.  They want a home that is more comfortable for everyone in the family while they are in close quarters with each other during the "lock downs".

RESORT BUYERS:

This is the oldest group of the three.  The Resorters are ready to enjoy retirement in world-class vacation destinations.  Destinations where they can enjoy fresh air, recreation and luxury amenities; such as, skiing, wine, golf or yachting.

Their net worths of $10 million or more make it easier for them to make a choice of where to live.  They may own multiple properties and are looking for FREEDOM.

They also prioritise health and wellness, but sophistication and luxury are equal priorities, much more than the other two groups.  * taken from Institute of Luxury Real Estate Marketing, November 24, 2020.

This article makes sense when one tries to understand our market with sellers moving out of state or out of the area.  The transition is nothing more than the groups moving or transitioning within our area.



Comments

Post a Comment

Silicon Valley Real Estate Newsletter

Covid Economy Falters Bay Area Luxury Home Sales Boom

While rents collapsed, rent went unpaid and landlords fought to keep above water an exodus evolved from the Bay Area; but within Silicon Valley, Luxury Homes escalated in numbers sold and in median prices. Quite an aberration.  In San Mateo County the number of Luxury Home Sales went from 564 in 2020 to 679.  In Santa Clara the number of Luxury Homes sold went from 1465 in 2020 to 1498 in 2021.   For 2021 Luxury Median Priced homes popped from $1.45 million to $2.90 million and Santa Clara from, $1.33 million to $2.66 million. (Thank you Louis Hansen of the Mercury News) The rush from San Francisco was  evident as Woodside, Portola Valley with their 1 acre minimum parcels provided space and safety.  *News Break states that East Palo Alto is among the Cities where home values are falling the most.  Between January 2020 to January 2021 the typical American Single Family home appreciated by 9.1%.  In East Palo Alto it declined 2.6% with a change in population, only to be beat by San Franc
Read more

the Problems are the Path: Notice of Default Opportunity in Multifamily Unit

  Startup bubble fueled by Fed’s cheap money policy finally burst in 2023 PUBLISHED THU, DEC 28 2023 9:00 AM  After years of record venture investments tied to low interest rates, cheap money has stopped flowing in startup land, leading to high-profile failures.WeWork and Bird declared bankruptcy in 2023, while pandemic plays like Hopin and Clubhouse faded into oblivion.“Prediction: 2024 is the year we finally bury the class of ’21 ZIRP ‘unicorns’ and start talking about a new crop of great companies,” Jeff Richards, a partner at venture firm GGV, wrote in a post on X. Easy Money created more risk than the inexperience entrepreneur.  The plan would to go back for more money when problems erupted.  Then came higher interest rates.  Failures, bankruptcies followed with empty offices and work from home.  Nothing new here! This year, it all unwound. With the Fed  lifting its benchmark rate  to the highest in 22 years and persistent inflation leading consumers to pull back and businesses to
Read more

The Problems are the Path: FED calls interests rates Wednesday January 31

On Wednesday the FED will tell what the tendency is for lowering interest rates.  If you readers just rely on CNBC, Bloomberg or some Social Media Site, I suggest you get on the St. Louis Federal Reserve Bank's mailing list.   Add to the Wall Street Journal and the U.S.  Census Department.  With those three sources you will not find yourself being jerked around by Media promotions and investment banks and advisors promoting their positions.   The Wall Street Journal had a list of the four new members of the Federal Reserve Voting Panel.  All four say too soon to cut rates.  The Federal Reserve so indicted the same.  The U.S.  Census reports showed slight declines in inflation with nothing near 2% annual rates.  The Census also stated POSITIVE growth in the US Economy.  All quite good for high interest rates.  It would appear to me why cut rates if the economy is doing so well?  The next issue the FED Governors must be looking at are housing prices and rents.  The Gen Z cannot affor
Read more