Could the Luxury Condo Craze Return? Here’s What’s Happening in Urban Markets

Source: The Institute for Luxury Home Marketing

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 home buyers 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 luxury real estate professionals?

Let’s take a look:

BUYER’S AGENTS MAY HAVE A LITTLE MORE BREATHING ROOM

For the last year and a half, it’s been nearly impossible for buyer’s agents to find homes for their clients.

Now, the re-emergence of available luxury condos gives buyer’s agents the opportunity to work those urban areas with slightly less competition when it comes to presenting an offer.

Even better? If you’re a newer luxury real estate professional looking to specialize, you may want to leverage this opportunity by positioning yourself as a “downsizing specialist” who helps clients simplify their living situation without compromising the luxuries they’re looking for.

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 luxury real estate professionals to open up their pipeline to a larger pool of prospects.