The real estate market continues to be hot, and it's even hotter in the luxury sector. Coldwell Banker reports that homes in the $1 million to $5 million range had the highest sales growth: 69.2% higher for single-family properties and 65.3% for attached properties in the first 10 months of 2021 alone, compared to the whole of 2019 prior to the pandemic.
In Los Angeles, a huge luxury market, the "entry-level" luxury home had cost around $2 million for years, but now it's edging up to $3 million.
Luxury is very much in the eye of the beholder when it comes to real estate, but there are certain features that buyers have come to expect. And when paying vast sums of money to add yet another property to their real estate investment portfolio, they're willing to wait until they can get exactly what they want. Here are some trends that continue to dominate the luxury market.
Getting noticed while out and about is commonplace for high-profile celebrities. But when they're at home, they want to feel safe and secure from prying eyes. As such, properties that afford a high degree of privacy will always be on high-luxury buyers' wish lists.
For some, this means sprawling compounds in gated communities. For others, it's sky-high city condos and co-ops that are just a private elevator ride far and away from the hustle and bustle. Case in point: Justin Timberlake and Jessica Biel recently made a killing on the sale of their Manhattan penthouse in a luxurious TriBeCa building noted for being "paparazzi-proof."
2. Expansive views
Real estate is all about location, and those in the luxury real estate market will pay top dollar to see more of their location. From unobstructed views of city skylines to panoramic views of the ocean or mountains, buyers want homes that optimize their views.
Inverted floor plans are one way to make the most of a home's jaw-dropping views by putting the living areas on a higher floor than the sleeping areas. For condos and co-ops, buyers can usually expect units on higher floors to command higher asking prices.
3. Two kitchens
One high-end kitchen is not enough for some. Particularly in Los Angeles, luxury buyers want two: one for meal preparation (be it by themselves or a personal chef) and one for entertaining friends and family.
Some buyers can settle for just one kitchen indoors, but they want the other one outside. From outdoor pizza ovens to smokers to full-service bars, outdoor kitchens allow hosts to remain among their guests while preparing food and beverages. Per Home Advisor, a high-end outdoor kitchen can cost upwards of $100,000.
4. Opportunities to expand
Whether it's a large plot of land to build on or the opportunity to purchase the condo/co-op next door and knock down the wall, luxury property buyers like knowing they can expand their space if and when they want to. Long-term construction timelines likely aren't a bother like they are for most homeowners -- luxury owners can always hunker down in another wing of the home or at another property entirely.
5. White-box listings
You've heard ad nauseum about how staging a property can help it sell faster because it enables would-be buyers to visualize the space's potential. But among luxury real estate listings, the trend is the exact opposite. White-boxing leaves every room stripped down to the bare walls so that buyers see a blank canvas to do with as they please.
Granted, this is a no-brainer when design budgets are not an issue and homes have thousands upon thousands of square feet -- no one's exactly sweating where the dining room table or the bedroom furniture should go. However, it should be noted that this strategy didn't appear to work for Sir Paul McCartney, who recently sold his Fifth Avenue penthouse for only $8.5 million--only a little more than half of what he paid for it in 2015.
When home prices are in the multimillion-dollar territory, buyers are likely to wait them out until they find what they want. Low inventory in the luxury sector, like in the rest of the real estate market, could drive up the prices for certain properties, but luxury buyers who have multiple homes can well afford to wait for the perfect one to come along.