While many affluent clients were busy trading in their luxury condos for more space, privacy, and nature over the last eighteen months to escape the confines of a job they no longer needed to commute to, some have simply been waiting to return back to the city life they love.
Last month, the Luxury Market Report revealed an emerging trend of some affluent clients returning to urban living, likely due to softening prices and the trickling of listings finally hitting the market after a year and a half of ultra low inventory.
Joining those returning to urban life are also many first-time homebuyers in the luxury market, as well as foreign investors.
So, what does this mean as the market continues to shift? And more importantly, what kinds of opportunities does this return to city life present for the luxury market?
Let’s take a look:
BUYER’S MAY HAVE A LITTLE MORE BREATHING ROOM
For the last year and a half, it’s been nearly impossible for buyers to find homes.
Now, the re-emergence of available luxury condos gives buyers the opportunity for slightly less competition when it comes to presenting an offer.
FIRST-TIME HOME BUYERS HAVE A CHANCE TO ENTER THE MARKET
When inventory was extra low and prices were extra high, many first-time luxury home buyers were priced out of the market — drastically reducing the pool of potential buyers. Now, with city property values leveling out, there may be an easier opening for these buyers to stake their first claim in the upper tier.
However, prices may rise again as people jump on the opportunity to enter the market now, so buyers should still move quickly and expect multiple offers — although there may not be quite as much competition from other buyers as there was just a few months ago, or as there might be on larger single-family homes.
INTERNATIONAL BUYERS ARE TAKING NOTICE OF THE SHIFT
Another demographic that was pushed out of the luxury market? International buyers.
Between strict restrictions during the pandemic and almost no inventory available to purchase sight-unseen anyway, international buyers and investors spent most of the pandemic on the sidelines waiting for better conditions to purchase American and Canadian real estate.
Now, the availability of single and attached homes in more urban areas is catching their eye, too, presenting yet another opportunity for sellers and a bit more competition for buyers.