COVID-19 has brought on an unprecedented change in lifestyle and housing needs, especially for the wealthy who can afford to choose where they live. In 2020, stock market gains, low interest rates and more of the affluent working remotely have all contributed to a continued boom in the luxury real estate market. According to a new report from Redfin (www.redfin.com), U.S. luxury home sales surged 60.7% year over year during the three months ending Nov. 30, the biggest jump since at least 2013. That nearly quadrupled the growth seen during the three months ending Feb. 29, and also far outpaced the 14.8% increase in sales of mid-priced homes and the 6.8% uptick in sales of affordable homes.
One of the biggest attributing factors to the rise in luxury home sales is the amount of affluent home owners working from home. This trend doesn’t look like it’s ending anytime soon, and homeowners are looking for larger homes with ample office space – especially when everyone in the family is at home as well.
According to Anne Miller, RE/MAX Vice President, McMansions are making a comeback. “In past years, clients were looking for convenience. They wanted walkable areas, and communities built around outdoor spaces, dining and downtowns. In 2020, we saw affluent clients going back to wanting more space. The more space they have, the more opportunity and flexibility to create the exact home they want.” In addition to wanting ample room for a larger home office, health and wellness is a top priority to luxury home buyers. Larger homes allow buyers to have room for wellness areas like yoga studios and meditation rooms.
Another shift the pandemic brought is the move from densely populated areas to places where homeowners can have private outdoor space and less crowds. New York City, in particular, saw a mass exodus last year as the pandemic spread through the five boroughs. Because of the ability to work remotely, high earners fled the city in search of more space and privacy.
Miller notes that many of the tech markets are seeing a spike in demand for luxury homes. Denver, Dallas, Houston and Arizona especially are experiencing more high-end home sales than before. While California is considered a tech hotspot, similar to NYC, Miller sees more people moving out of the state for places like Boulder to take advantage of more space indoors and out.
Check out the full Forbes article, click here!