A recent report from Redfin Research Center on luxury home prices shed some interesting light on the trends of the market. While a 16% increase in the first three months of 2014 led industry experts to predict a stellar year in luxury real estate sales, a gradual decline led to only a 3% growth rate in the fourth quarter. Further analysis of the data can give insights into which American locations are particularly trending, allowing luxury brands to target specific audiences. “The takeaway is to look for things to heat up in cities that already have a track record of attracting foreign buyers,” chief economist at Redfin, Nela Richardson, stated in a recent Luxury Daily article. “As global financial instability effects overseas markets like Russia, Europe and China, international interest in United States real estate will continue to escalate.” And so it has, but not across the nation, instead focusing in on the coastal regions of our country.
The five top locations experiencing the best growth in luxury real estate sales include Miami Beach, Los Angeles, San Francisco, Boston, and Irvine, California. Of those five, Miami Beach far outsold the others with a 66% growth rate since 2013, the highest percent change by over 50%. Here, the average luxury sale price was $8,337,000, and the boom is credited in large part to the heavy influx of international buyers to the area. Fort Lauderdale also saw a substantial annual increase and ended up at number 10 on the list of best luxury markets. In 2015, Redfin predicts that this trend will continue, in Miami and also in other coastal areas of the country.
As these areas continue to attract big money investors, other brands are taking notice and positioning themselves to capitalize as well. Auberge Resorts typically only caters to the short-term vacationer, but is now widening their scope to include permanent residents at their first ever real estate location in Fort Lauderdale. Brokerage firm Christie’s International Real Estate is extending its involvement with Art Wynwood in Miami to present its luxury property options to art enthusiasts drawn to the area. This allows the firm to be present at the same time as the Yacht & Brokerage Show, hopefully expanding their presence in Miami, where luxury real estate is not hard to come by.
“Redfin is seeing a record increase in buyer demand at the beginning of 2015,” Richardson claims. With the economy bouncing back, the job market improving and an increase in consumer confidence, “as long as there are enough affordable homes for sale on the market, 2015 will be the best year for housing since it hit bottom.”