Long-Term Change Ahead for Secondary Luxury Properties
Long-Term Change Ahead for Secondary Luxury Properties
The pandemic changed the world, and the real estate market has certainly undergone its fair share of significant shifts due to homeowners’ changing priorities. Many high-net-worth buyers have reexamined what they desire most in a property, causing homes in places with easier access to nature, less hustle and bustle of urban areas, and more space to grow in popularity and demand. Although many people have retained their in-city residences, they’ve also decided to explore other areas outside of popular cities, balancing the convenience and entertainment of urban life with the pleasures of a slower-paced vacation-home lifestyle.
From the tropical beaches of Turks and Caicos to the rustic charm of Bend, Oregon, markets boasting luxury properties have seen a significant increase in sales prices as more folks invest more in their vacation or secondary residence, due in part to the ease of working from home, less commuting to the office, and general lifestyle shifts that have occurred in the past few years. Although major cities like Seattle, New York, and San Francisco will certainly remain desirable, expensive markets, other more rural or scenic areas have seen a major boost in their markets, with a slower-paced lifestyle, that benefits from easy access to nature, becoming more and more popular.
Florida, which boasts beautiful beachside and resort living, has seen an extreme boost in interest. Inventory has been unable to keep up with the influx of vacation-home seekers. It’s not just U.S. beaches that have created a hot market, beachfront living in places like Italy and the Caribbean have experienced a surge in demand. In smaller, more rural towns, the new interest in secondary real estate has boosted the economy. With more people taking advantage of the freedom of a virtual work schedule or less time spent working in general, previously well-kept secrets, like villages in the Tuscan countryside, have become a more feasible living option—at least for longer vacations. Experts doubt this high-net-worth demand will go away, meaning buyers shopping for secondary or tertiary luxury homes in these locales is the new norm.
We’re already seeing communities grow and expand with more residents creating a need for more restaurants, shops, and entertainment. Accessibility to amenities has improved, breathing life into some neighborhoods and improving infrastructures. In some cases, experts believe that although prices have gone up, it was because homes in these scenic destinations, like Florida beach towns, were previously underpriced, and this change in the market is actually more appropriate for what homeowners buying in the area are receiving.
With any new change in a market, only time will truly tell the effects. However, it seems that this new surge in luxury property purchases in secondary markets is not a passing fad and signals a permanent change for these markets. What people want out of their lifestyle has changed in recent years, and it makes sense that this change is evident through the places we choose to live in and the homes we decide to purchase.
For a closer peek into how markets have been changed by this new trend, check out this Sotheby’s International Realty article with some fantastic expert insight.