The luxury segment of real estate is often described as being a minor part of the whole industry, but is readily recognized as being a major influencer in creating real estate trends and providing a barometer to changes for the industry. According to the North American Luxury Market Report by the Institute for Luxury Home Marketing, here are some of the key luxury home trends in 2019 that are anticipated to have a far-reaching influence into the 2020s and beyond.
While each market certainly has its own nuances, an overall trend has become very apparent in the luxury market. It’s all about finding a more ‘holistic approach’ to living. Savvy homeowners, luxury real estate professionals, developers, architects, and designers are all reporting a significant importance being placed on the infusion of a healthier cadence into our everyday working and living environments.
1. Migration to new markets
This year saw a continuation and escalation of real estate investment into 2nd and even 3rd tier markets. Cities such as Dallas, Houston, Denver, Seattle, and Las Vegas may have been on the radar in 2018, but 2019 saw communities such as Jacksonville, Charlotte, Nashville, Cincinnati, Boise, and Kansas City added as markets of growth.
A combination of affordable property values, lower taxes, new job opportunities, and a more sustainable lifestyle has resulted in a migration away from the major metropolises to these secondary markets. This trend is now global.
The broad picture indicates that the affluent are diversifying their portfolios. They are investing in both major cities and these new markets, but with clear differences being the smaller size of the properties they are purchasing and the amenities on their list of requirements.
It must be recognized that the affluent are an integral part of the movement to these new markets. After all, they are often the instigators looking to maximize the potential revenue for their corporations, personal businesses, or start-up entrepreneurial ventures.
Luxury properties now need to be more than stopping-off locations for a week here and there. They have to offer the full home experience allowing executives to live, play, and work—and bring their family and pets with them, too!
2. New groups of influence
Throughout 2019, there was a growing acknowledgement of the power of the Millennials. This group, which is anticipated to overtake Baby Boomers in numbers by 2020, is also a generation set to inherit the greatest wealth by 2030. According to a recent report by Coldwell Banker Global Luxury, this figure is estimated at nearly $68 trillion.
Millennials may have initially been slower to accumulate wealth and partake in homeownership than previous generations, likely due to the 2008 recession. But research now shows over 92% of Millennial millionaires are homeowners who recognize that real estate is a way to build wealth. Their influence will continue to be profound and is already being translated when we look at the significant changes in the types of properties, locations, and amenities in demand.
Terms such as ‘Hipsturbia’ have joined the landscape; as downtown cores have become too expensive, they have been replicated in many suburban communities. The concept of live/work/play in a vibrant, evolving neighborhood has proven to be a success—especially among the Millennials.
At the opposite end of the spectrum, Baby Boomers are also wielding their influence, as life expectancy has risen by 25 years during the past century. Scientific advances in medicine and healthier lifestyles have resulted in a generation that is still independent. Research shows that a return to downtowns, even hipsturbia communities and multi-family properties, saw a significant increase in demand from this demographic. This group is selling their larger suburban properties and looking for city convenience, with walkability and amenities in easy reach.
Interested in luxury appraisals? Differentiate yourself by becoming a Certified Luxury Home Appraiser™ (CLHA).
3. Health and wellness
In the midst of a world where speed and instant gratification are at a touch of a button, there has been a growing recognition for a need to find time for relaxation in a home that embodies a sense of wellness.
Consumer demand for wellness in their homes and communities grew exponentially as well as globally in 2019. The increased attention paid to tackling today’s uniquely modern problems such as poor air, water and lighting quality, sedentary lives, unhealthy diets, stress, social isolation and loneliness, pollution, and nature deprivation, has created powerful opportunities.
Leading builders, developers, and affluent investors in real estate recognized that this was not just a hot new trend, but a growing necessity that needed to be incorporated into both our lives and work environments.
As a result, there has been an increased emphasis to build real estate that is eco-sensitive, providing environments that offer well-being, natural elements, and healthy amenities.
From custom-designed homes and new condominium buildings to planned residential communities, the inclusion of wellness structurally as well as in the design, features, and amenities has fast become ‘the rule rather than the exception’—especially for the affluent in their real estate choices.
4. Natural design elements
In keeping with the importance of living holistically, 2019 integrated the ‘less is more’ attitude, with a shift to more multi-functional spaces. 10-car garages were transformed into shareable space for ‘toys’ for outdoor activities. Gyms and swimming pool areas were re-energized with the addition of calm spaces for meditation and yoga.
Plants became significant again with big, bold plants in homes, terraces, and rooftop gardens. So too did the use of big, bold colors as splashes of vibrancy on natural palates, but with an emphasis on creating a sense of balance. Bold was paired with neutral hues of white and grey as either statement pieces or accents.
One of the biggest nods to holistic wellness was the integration of natural woods, textures, and terra cotta colors, which were added to walls and increasingly to ceilings—adding character or that ‘wow’ factor to the 2018’s monochromatic modern finishes.
Perhaps in appreciation of our society’s change towards gender bias, mixing masculine and feminine elements within a room to achieve a balance became a strong designer theme in 2019. Dark tones, bold designs, and heavy leather were mixed with light colors, clean lines, and delicate fixtures.
Trends for 2020 forecast a continuation of these trends, with neutral colors moving from cooler shades to warmer tones, two-tone color palates that incorporate the yin and yang of life, and geometric patterns becoming featured on walls and ceilings, all the while maintaining a sense of balance.
Luxury is now about creating a comfortable experience that affords the feeling of luxurious well-being. These luxury home trends have certainly impacted real estate across North America, and it is anticipated that their influence will be far-reaching into the 2020s and beyond.