LUXURY OUTLOOK – Lakes Sotheby’s International Realty
Welcome to the Lakes Sotheby’s International Realty 2023 Luxury Outlook. Articles in this online magazine will provide insight and assistance in navigating the dynamic and ever-evolving real estate market we live in.
Although it’s not unreasonable to assume that luxury home prices should decrease due to supply and demand and fluctuations in interest rates, the trends observed in 2022 indicate otherwise. In reality, prices remained relatively consistent throughout the year.
Several factors contribute to this resilience in prices. Firstly, there has been a significant increase in wealth creation globally, enabling affluent individuals to continue spending on luxury properties. Secondly, many luxury purchases are made with cash, insulating the high-end segment from interest rate changes. Lastly, the Covid-19 pandemic has brought about a lasting shift in lifestyle, with people spending more time at home. This renewed focus on their living spaces has reduced the likelihood of homeowners selling multiple properties, leading to a low inventory, exacerbated by a shortage of new constructions.
According to Fannie Mae’s November 2022 forecast, home sales were anticipated to decline but show signs of recovery by 2024. Fannie Mae economists expect mortgage rates to decrease gradually, although they are unlikely to fall below 6% soon.
Despite these projections, luxury agents remain actively engaged in facilitating their client’s transactions, with many seeking opportune investments amidst market fluctuations.
In the subsequent sections, we will delve beyond the realm of real estate to explore the desires of luxury consumers, encompassing aspects such as sustainable luxury items, record-breaking auction sales, and even wine investments.