| The luxury real estate market has seen an unprecedented period of growth in the past two and a half years. While this strong growth was due in part to market cycles, it has been affected by many outside influences, making predicting the next few years a challenge. Cyclical Trends Real estate cycles typically take place over the four quarters of the year (short cycles), with the busiest buying and selling months usually beginning in spring and fall. During winter, many sellers list their property in anticipation of the increased buying activity in spring. As inventory accumulates in summer, the negotiation power shifts to buyers, and sales decrease. Fall is the second busiest time for inventory and sales but then dwindles again towards the end of the year. Understanding real estate cycles is crucial to successfully buying or selling properties at the right times. The long-term economic cycle follows a pattern of phases: Peak, high demand, and activity; Recession, decreased activity, and market momentum; Trough, minimal activity; and Expansion, increased demand and consumption. While there is no precise timetable for each of these stages, they can indicate the direction of the market. So what are we seeing? Normality The market is expected to return to a more normal short-term cycle, causing an influx of properties on the market this spring. However, the long-term cycle has entered the Recession Phase, so downward pressure on prices is likely due to higher inventory than sales level. One of the reasons we are not seeing a significant decrease in prices is that inventory levels are still below historic norms, and demand remains stable. Paradoxes We are seeing contradictions within the same market for different price points and the types of homes being purchased. Despite the nuances in pricing trends, the outlook remains positive for the housing market. As more millennials and investors enter the market, an equilibrium in pricing will slowly start to form, increasing both the variety and diversity of homes available, as well as ensuring that property prices do not soar or crash. In the meantime, we should expect to see property prices remain relatively steady despite minor ups and downs in the economy, so now may be the time to take advantage of attractive opportunities while they still exist. Expectations Lifestyle has become a driver, and homes that offer unique experiences, access to adventure, and are filled with high-end amenities are a draw more so than worries about higher interest rates are a deterrent. Pay attention to shifting terms, look carefully at your local market conditions, and strive to make your property the best on the street, with appealing fixtures and fittings to stay ahead of the competition. As your local real estate experts, we recommend working with a luxury property specialist. The art of selling and buying in this market needs a critical and analytical approach, understanding the realities, and setting expectations. Along with the right preparation and attention to design details, you can successfully sell your home faster and for a higher price. Read our blog post to find out what’s currently trending in 2023, and what homebuyers are looking for in their dream homes click here. Unlock your home’s potential, call us today! ~ Susan, Jennifer & Taylor |
