In their annual review of the luxury real estate market, the Coldwell Banker Global Luxury Specialists have found that space is the key driver for luxury home buyers closely followed by somewhere to work from at home.
2020 has been an unprecedented year and has caused people from every demographic to reevaluate what’s important and what they need to be able to cope with current events and for whatever the future holds.
Coldwell Banker Luxury Global has recently published its annual Report on luxury real estate. The Report’s findings raised some fascinating points. The first one that caught my eye is how luxury is being redefined in the eyes of HNWI’s.
In line with what we’ve been writing about over the past few years, their Report has found that what people consider to be a luxury is no longer centred around shiny high-value tangible assets. Among the things HNWI’s now classified as luxury are family, safety, privacy, the outdoors, and health.
Over the past couple of years, we’ve written extensively about the exodus from major cities such as London to the freedom of the countryside. It seems that this desire is mirrored across the pond, with buyers now prioritising more internal and external space as a key reason to move. The Coldwell Banker Report found that demand for homes over 5,000 sqft has risen by nearly 17%.
The Report has also shown how much home buying trends have changed due to the impact of the pandemic. Many buyers, who Coldwell Banker refer to as Trailblazers, are now favouring small, hidden gem towns and the suburbs over built-up urban areas.
The ‘Report’ also showed that having somewhere to work at home is another major factor in what luxury homebuyers want. Somewhere to work from home is second only to the size of the property.
The people who responded to the Coldwell Banker survey agreed that home working space is not only essential for the ‘here and now’ but would also prove to be an invaluable asset in the future.
Michele Flood of Coldwell Banker Realty in Rye, New York, said that she sees this need continuing indefinitely with home offices becoming a staple as more people choose to work from home. Beth Chang of Coldwell Bankers Pacific Properties in Honolulu backed this up with her view that “This ‘unexpected experiment’ that we’re going through will allow more people to work from home permanently.”
At the start of this year, I left a built-up urban area to enjoy life on the edge of a traditional English village in Lancashire adjacent to open fields (see above). It has had an incredibly positive impact on my mental health. The monotonous drone of traffic has now been replaced by birdsong, and aside from the sheep’s ever-watchful gazes, I shouldn’t forget the privacy I am now afforded. The only thing left on the ‘to-do’ list is to have a private office constructed in the garden.
Reconfirming the importance of the privacy aspect, Joyce Rey of Coldwell Banker Realty in Beverley Hills said, “Privacy has always been an important consideration for the wealthy, and that is true now more than ever.”
So, where are US luxury homebuyers moving to?
According to Coldwell Banker Global Luxury, the following areas are what they consider to be the current hotspots: Colorado Springs (above), East Bay in California, Fairfax County in Virginia and King County in Washington.
Other areas proving popular with buyers are Phoenix, Denver and Dallas. Areas they consider to be ripe for discovery are Burlington, Reno, Coeur D’Alene in Idaho, Knoxville and Hamilton County in Indiana (below).
Jade Mills, International Ambassador of Coldwell Banker Global Luxury, commented: “2020 was transformative for the luxury real estate market. We saw record-low interest rates paired with demand at an all-time high for single-family homes, resulting in extremely-low inventory levels and multiple bidding wars across several luxury markets. The emergence of a new affluent demographic and type of home buyer fueled this growth driven by shifting lifestyle preferences. Many of the trends we saw at the forefront in 2020 will continue to evolve in the years to come.”
Coldwell Banker Global Luxury’s “The Report” is reconfirming what many already know, namely that what people define as a luxury has changed. Many people are now less concerned about how others perceive them and instead want a lifestyle focused on family, safety and health—a prestigious address in no longer a necessity. Instead, space, fresh air, somewhere to work from home and privacy are now the driving force in the luxury real estate sectors across the world.
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