Market Trends of United States Luxury Residential Real Estate Industry
This section covers the major market trends shaping the US Luxury Residential Real Estate Market according to our research experts:
Home Automation Becoming a Pre-requisite for Luxury Real Estate
In today's tech-savvy world, smart homes are considered the epitome of luxury. Increasingly, home automation is becoming a prerequisite for luxury real estate. Electronic glass shades, mobile video security systems, and voice-activated entertainment systems are almost a norm today. 62% of smart American homeowners claim better security as the top benefit of owning a smart home. Smart security products are among the most used products on the market. Homeowners can connect smart alarms and smart CCTV to their phones and monitors, enabling surveillance from wherever they wish. 3 out of every 5 Americans buy smart products for this purpose.
Luxury real estate buyers want smart homes for multiple benefits. Smart homes are great at saving money. 45% of smart American homeowners save an average of USD 98.3 per month. Smart homes help in automating the home, which saves a lot of time for the owners. 57% of American homeowners save about 30 minutes per day which adds up to 180 hours in a year. All these reasons will drive the demand for smart homes and home automation in the luxury real estate sector in the United States.
The Combined Effect of Pandemic and Low Mortgage Rates Leading to Increased Sales
Falling mortgage rates throughout 2020 and 2021 have boosted the sales of luxury homes in the United States. As wealthy Americans took advantage of cheap mortgages, increased savings, and the ability to work from home during the pandemic, their demand for bigger homes and million-dollar listings outpaced sales of homes across all other price ranges. The number of homes sold for more than USD 1 million rose by 81% to 17216 in February 2021 from 9635 a year earlier. In the Midwest, the volume of homes sold for above USD 1 million doubled in the same period. In the Northeast, the number increased by 98%. In the South, it was up by 94%.
For wealthy Americans, the demand for larger homes was driven by a desire for more rooms that could be used as offices and gyms while they worked from home during the COVID-19 crisis. This desire for luxury homes was supported by continuously falling mortgage rates. Sales of luxury homes in the US rose nearly 42% year over year in the first three months of 2021. The typical luxury home for sale during the first three months of the year spent 61 days on the market, 38 fewer than the same period in 2020.
