While many industries and businesses suffered as a result of the pandemic and its insistence upon us to adopt new ways of living, the market of luxury real estate flourished, and is set to continue growing throughout 2021. Many affluent buyers are seeking to upgrade the space within their luxurious residences, wanting greater outdoor living, more amenities and lower population density.
These wealthy consumers are expected to continue to realign their property priorities to give their families a greater sense of privacy, safety and security. Here are the top trends to expect in the luxury real estate market in 2021.
Choosing suburban space over city culture
There is an intense level of competition for single-family homes throughout the country, as buyers choosing to flee densely populated cities have driven home prices up across the U.S.
New York, in particular, experienced a mass exodus in 2020 as it became the epicenter of Covid-19, and odds are, those residents won’t be returning in any great numbers for some time to come.
The Big Apple’s luxury market was only just bouncing back from multiple tax changes at both federal and state levels that had discouraged wealthy individuals from residing or even investing in New York City. When the deadliest outbreak hit the five boroughs, high earners fled, seeking refuge everywhere from the city’s suburban areas to southern states like Florida. Some luxury markets experienced a swift recovery by the fall of 2020, but not NYC – the city’s luxury sector is only recently seeing any normalization to new contracts on homes asking over $4 million.
Of the deals that are now taking place, there is a significant change on buyer priorities. Terraced apartments, townhouses and apartments with small rooms or alcoves that can be used as home-office spaces are all attracting unprecedented attention. Buyers are looking for ways to avoid sharing elevators and being cooped up indoors all day, as well as finding flexible spaces to comfortably work from home.
Prioritizing quality amenities
Thanks to Covid-19, concerns surrounding a building’s air filtration systems and cleaning regimens have become commonplace. Amenity spaces – already beginning to trend pre-pandemic – have exploded in importance, too, with residents focused on condominiums that are not only luxurious but also feature larger outdoor areas, roof decks, co-working spaces, wellness services and health-focused amenities and programming. Everything from on-site spas to comprehensive sanitation servicing, high-tech air filtration and lighting, and even on-site medical care are fast becoming a standard expectation for luxury residential buildings.
SOLEMAR, a luxury development in Pompano Beach, Florida has equipped each of their apartments with specialized wellness technology, promising to improve everything from a resident’s energy levels to their quality of sleep. These kinds of in-building, full-service health care options are likely to continue expanding in the luxury real estate sector in the coming year to cater to those seeking affluent lifestyle living.
South Florida’s luxury market will continue to boom
South Florida’s mansion market was inundated by the second half of 2020, as the pandemic drove interest from high-cost Western and Northeastern states towards Florida. This trend is likely to continue throughout 2021.
Florida attracted buyers in their masses as people flocked to the state in search of larger houses, more land and the promise of year-round outdoor living. Not surprisingly, these incoming buyers were predominantly of the more affluent variety, made up of those who were able to work from home or otherwise afford to uproot their businesses and head to the Sunshine State.
In Miami-Dade County alone, new contracts on million-dollar-plus properties were up by 54% last November, while Palm Beach County saw the demand for $1 million-plus single-family homes almost triple year or year, according to data from appraisal business Miller Samuel.
Condominiums in Florida are also seeing considerable growth. Affluent buyers in South Florida are considering well-amenitized, larger apartments, creating a boost to Miami’s luxury condo market, as well as its neighboring islands.
New construction and development ramping up
High homebuyer demand requires new builds, and homebuilders appear to be ready and willing to rise to the challenge. The U.S Census Bureau reported over 1.54 million housing starts for November 2020, a figure up 12.8% from the same month in 2019.
Looking ahead in 2021, it is expected that homebuilders will continue to ramp up the rate of new construction, with almost 1.64 million building permits issued in November 2020. Realtor.com predicts a further rise of 9% in housing starts compared with 2020 figures.
Luxury real estate developers are certainly rethinking their designs to adapt to consumer preferences following the pandemic. Many have been re-developing ideas to include expanded outdoor areas, home office space and the addition of in-demand amenities such as smart home/touchless technology and air filtration systems.
The luxury real estate market is poised well for continued growth throughout 2021, particularly those developments that have been reimagined to cater towards the changing concerns of post-pandemic consumers. It is now more important than ever that developers adapt and position themselves to meet the evolving needs of potential buyers.