Luxury Real Estate – Expectations Vs Reality
Those who expect the luxury real estate market to remain stable are disappointed. Sales of high-end homes have dropped nearly 58% between September 1 and 30, compared to the same period last year, according to a report released by the Canadian Real Estate Association (CREA). This report also points to a continued affordability challenge for buyers in Vancouver and Edmonton, where the average price of a residential home in these markets is higher than the national average.
Calgary’s luxury condo market continues to rally
During the summer months, Calgary’s luxury condo market was still thriving and continued to grow in popularity. Prices have continued to increase, and inventory has also decreased. This has benefited both move-up buyers and empty-nesters, giving them a rare opportunity.
While the luxury real estate market has changed, the transition has been more balanced. The housing inventory has decreased slightly but remains low compared to last year’s levels.
Strong demand for condominiums has driven price increases across all housing types. In particular, condominiums are seeing brisk demand from certain demographics, such as young professionals. These buyers are also willing to pay in cash and are often willing to move quickly.
As prices rise, investors are re-entering the condominium market. Some buyers are arriving for jobs, while others are moving up because of affordability in Alberta. The continued strength of the oil and gas industry partly drives this migration. The economy in Alberta is forecast to grow by 4.9% this year.
Residential sales over $4 million declined 58% between September 1-30
During the year’s first three quarters, New York City’s resale market chugged at a modest clip. The region’s real estate market has the dubious distinction of being the largest in the country by value. It also spawned the most job losses of any major metropolitan area.
The Covid above 19 pandemic briefly halted sales, although the number of apex resale homes sold was actually down from one year ago. As of September 30, the median sales price of an existing home in New York was $384,800. This was not unheard-of number, but it was nevertheless a big drop from a year ago. The largest segment of the market – homes priced in the $750,000 to $1 million range – declined 9.5% from a year ago.
Edmonton’s economy will expand a healthy 4.9% in 2022
Despite the lingering headwinds facing most Canadian provinces, Edmonton’s economy shows resiliency. The provincial economy is expected to grow at a healthy rate of 3.6 percent in 2022, with a GDP increase of eight percent by 2022.
The province’s economy has benefited from surging natural gas and crude oil prices. Alberta has long been an export-oriented economy. However, the importance of different export commodities has changed. Oil, wheat, and fur once accounted for a large share of exports. But now, they account for less than half of the province’s GDP.
The Alberta economy is also highly dependent on internal markets for some manufacturing. For example, oil and gas equipment manufacturers are located on Refinery Row in Edmonton, as are several biotechnology companies. Those businesses require large labor forces. There are also several major petrochemical industries located east of Edmonton.
Vancouver’s affordability challenges have only sharpened with rising mortgage rates and inflation
Increasing mortgage rates and inflation have exacerbated affordability challenges in Vancouver. The affordability challenge continues to affect millions of prospective home buyers.
High prices, limited supply, and competition are hurting affordability. Affordability will continue to be a key issue in the market in 2022. The competitive jobs market will continue to create advantages for home shoppers. Moreover, young Americans are breathing new life into neglected and ignored markets.
Demand for housing continues to outpace supply. Homebuyers will have to re-imagine where they live. Affordability will become a major challenge for first-time home buyers.
The Millennial generation is entering prime home-buying years. Prices have continued to rise faster than wages. The price of gas is $50 a gallon, and milk costs six bucks a gallon.
Marketing for high-end real estate agents
Having a marketing plan for luxury real estate agents is critical. It helps you define your goals and develop a step-by-step process. If you invest a large amount of money in marketing, you want to see a positive return on investment.
High-end real estate agents need to focus on building relationships in luxury neighborhoods. They also need to work with a marketing production team to ensure all of their mailings are professional.
High-end real estate clients want to feel like they are getting a deal worth the money. They’re not looking for a flashy, high-tech marketing campaign. They want an agent who will listen to them and help them find the perfect home.