Luxury Housing Heads Into Robust Year
From low interest rates to strong financial markets - 2021 is on track to be another busy year.
The driving factor for increased luxury home sales in 2021 is predicted to be the continued demand for single-family homes, remote work, and the need for outdoor space.
Covid-19 pandemic has brought an unprecedented shift in lifestyle choices and housing needs, marked by an overwhelming preference for larger houses, more amenities and less population density.
George Ratiu, senior economist at realtor.com said, “We expect the luxury market to perform well. The 'wealth effect' will drive the upper end of the consumer market”
Meanwhile, a willingness, and even enthusiasm, among major employers to offer remote work or greater flexibility to employees long-term has cemented what might have been housing trends contained to the pandemic into market shifting forces.
That means 2021 will be a strong year for cities with ample single-family housing stock, preferably on large lots, as is the case in places such as Los Angeles.
How Will This Affect the Los Angeles Housing Market?
The sprawling, leafy properties that typify Westside Los Angeles have allowed the city’s luxury housing market to weather the pandemic with an advantage over densely built cities like New York or San Francisco—a reality that will continue to support a robust market and price growth in 2021.
Home sales at $2 million or more rocketed past 2019 levels in the late summer and fall. In September, for instance, 418 homes went into contract compared to just 259 the same month last year.
According to Ms. Hale, whose team at realtor.com forecasted overall home prices to rise over 10% in the Los Angeles metro area next year, said:
"We could see that start to affect buyer psychology."
Extremely low inventory (even in the multimillion-dollar home market) will continue to drive competition and prices, but may become discouraging for some home hunters who are unable to find the homes they want.
h/t Mansion Global
