In today's real estate market, there continues to be limited liquidity for luxury. As we begin a new year and a new decade, here's where we believe the market is headed in the coming years.
1. In 2020, the buyer pool for luxury will escalate in scarcity. Luxury markets across the US will continue to take the biggest hit next year, with appreciation slowing down. Real estate markets will continue to soften due to political uncertainty, rising interest rates, and tax code changes.
2. We will see the full impact of the Mansion Tax, specifically for NYC, as buyers in the luxury sphere purchase secondary homes outside of the city. Florida will continue to reap the benefits of this.
3. Our research continues to indicate that the largest factor in determining the final sale price of a luxury property is the number of days that it has been on the market. Every day a property is on the market, it depreciates in price. When a property has been on the market for a prolonged period of time, not only does it suffer from negative perception, but there is an inherent cost associated with the accumulated days. This is especially true in markets with a high level of second homes and luxury at large.
4. We predict average DOM in luxury space to be on par—if not higher—than in year's past, and the average sale price to be the lowest in the last decade. Of the 56 markets we evaluated in 2018 analyzing the top 10 sales in each market, the average DOM was 506; In 2017, it was 466.5. In 2018, 62 percent of these properties took more than 6 months to sell; 23% took more than 2 years.
5. Further, properties that sell less than 180 days will continue to sell for a higher percentage of their asking price, and the majority—those that take longer than 180 days—to be on the market upwards of years, ultimately, selling for a lower percentage.
Later this month, we will be releasing the fourth edition of our Luxury Homes Index. The report evaluates the top 10 sales in the country’s hottest luxury real estate markets to determine the impact that the number of days a high-end property is on the market has on its final sale price. To view last year's Luxury Homes Index, click here.
Concierge Auctions mitigates the issue of Days On Market. With our global outreach, we introduce properties to scores of potential buyers; create urgency in the market with a date-certain sale; bring multiple, qualified buyers to the table; and close in 60 days from start to finish. There is no better way to orchestrate a sale on your client’s timeline. For buyers, our process is easy and transparent—and puts the world’s finest properties at your fingertips.
Visit ConciergeAuctions.com to browse, view all offers, and bid in real-time.