Amid the COVID-19 pandemic, luxury homebuyers’ priorities have shifted from seeking out new experiences and adventures toward finding homes in markets that offer safety, more space, and well-being. Whether you’re looking to specialize in luxury appraisals or you’re simply reading up on the latest market trends, you may want to pay attention to areas where luxury homes are in high demand. According to the March 2021 edition of the North American Luxury Market Report by the Institute for Luxury Home Marketing, these are the top luxury markets right now.
4 stand-out luxury home markets in the U.S.
Statistics from Coldwell Banker Global Luxury’s Report 2021 “point to a promising luxury home market with a strong starting position as we move further into this year,” according to Coldwell Banker’s President and Chief Executive Officer, M. Ryan Gorman. “There were many bright spots around the country and the world,” he stated, “as people adjusted their notions of home and sought fully amenitized retreats where they could live, work, and eventually entertain in place.”
In this report, they identified four areas that stood out as new hotspots among the top luxury markets in the U.S., specifically based on comparing high sales ratio percentages:
- Northern California’s East Bay region
- Colorado Springs
- Fairfax County, Virginia
- King County, Washington
Their choice of parameter to measure performance was guided by the escalating number of luxury property sales and the importance of understanding this impact on the level of inventory available. Increased sales does not always mean that inventory levels drop, especially in the luxury market where properties typically take longer to sell. But in 2020 the swing was dramatic, with many markets becoming seller-controlled for the first time in years.
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Northern California’s East Bay region topped the charts as people relocated in large numbers out of San Francisco in search of less dense living. Colorado Springs, already identified in 2019 as a “market to watch,” also saw substantial increase in demand as Denver’s ever-increasing prices and adaptation to working from home allowed for purchasing homes outside the metropolitan area.
Low interest rates gave DC and Arlington-area millennials the unexpected opportunity to trade their condos and move into townhomes in Fairfax County, Virginia, also driven by the ability to work from home. Whereas in King County, Washington, the demand for single-family homes soared when the ever-increasing number of employees working for Apple and Amazon in Seattle realized they, too, could move further afield and leverage these companies’ “long term work from home” guarantee.
Full list of top luxury markets in 2020
In addition to identifying the four new luxury home hotspots discussed above, Coldwell Banker Global Luxury’s Report 2021 also includes a full list of the ten top luxury markets in 2020:
- Denver, Colorado
- King County, Washington
- East Bay, California
- Sacramento, California
- Salt Lake City, Utah
- Colorado Springs, Colorado
- Fairfax, Virginia
- Denton County, Texas
- Wayne County, Michigan
- San Francisco, California
The list represents the highest combined sales ratios for luxury markets in 2020, and is sorted by total number of sales.
Current luxury home trends
Much has been stated in the real estate news about the relocation of homeowners out of the major metropolises. However, what may be surprising to many is that overall, the impact of the pandemic was not as dramatic as the initial reports in April, May, and June 2020 portrayed. Downtown and high-density areas did see their affluent depart for second homes or purchase homes in exurbia areas, but interestingly the percentage that sold their home was not as great as expected. Many kept their city home and merely swapped the location of their first home—at least until the pandemic is over.
Several key trends did appear for those that sold, insomuch as the affluent upsized to larger apartments, with more square footage, private elevators, outdoor patios, and the ability to upgrade air filtration, while others chose to move into townhomes and/or slightly further away into the suburbs to purchase a single-family home.
For more details and insights, check out the North American Luxury Market Report by the Institute for Luxury Home Marketing.
