The High-Stakes Search for Value
With the escalating prices and dwindling inventory on a global scale, the term luxury property has come under reevaluation in 2022. Affluent buyers are no longer just confined to the traditional blue-chip markets; they are venturing to lesser-known but promising locations. From the sprawling hills of North Carolina to the serene coasts of Portugal’s Algarve, alternative destinations are redefining what constitutes ‘value’ in high-end property.
Exploring New Frontiers: Phoenix and Beyond
Take Phoenix, Arizona, for instance. The city has been enjoying its own boom, particularly fueled by inflow from more expensive markets like San Francisco. “We’re in a dynamic market, experiencing some price volatility. However, our buyers understand the long-term value Phoenix offers,” says Dub Dellis, COO of Walt Danley Realty. Phoenix has also become a magnet for those relocating from San Francisco, adding an extra layer to its value proposition.
Similarly, regions surrounding New York City are gaining in attractiveness. “The city itself saw a rapid post-pandemic recovery, exceeding $7 billion in residential sales in just the first quarter of 2022. This strong performance has only made its suburban areas more appealing,” observes Sonja Cullaro, Executive Vice President of Christie’s International Real Estate Group.
An Underrated Global Player Meanwhile, Toronto presents an anomaly in the landscape of luxury real estate. “Toronto has room for significant growth, particularly when we compare its average sale prices to other major cities around the world,” states Chris Kapches, CEO of Chestnut Park Real Estate. Kapches’ observation highlights how even within traditional luxury markets, there are pockets of unexpected value.
The Old and the New
Tuscany and Thailand Hidden gems like Tuscany, which experienced slow growth for many years, are now reaping the rewards of renewed demand. Danilo Romolini, an expert in the region, notes the upward trajectory. Similarly, markets in Asia like Thailand are starting to attract attention. “It’s a golden opportunity to invest at the onset of market revival,” claims Tim Skevington, CEO of Richmont’s Christie’s in Bangkok.
Emerging Paradises Portugal’s Algarve and the Carolinas in the U.S. are becoming hotbeds for luxury real estate, thanks to their combination of lifestyle and investment potential. “I foresee a 15-20% price hike this year alone,” anticipates Reed Jackson of Ivester Jackson Distinctive Properties about the Carolinas, signaling the strength of these emerging markets.
What Lies Ahead?
Looking into 2023, macroeconomic conditions like softening currencies and easing inventory shortages promise to unveil new opportunities. While factors such as economic downturns and evolving remote work policies could affect market trends, the appetite for luxury remains undiminished.
“There’s a relentless global demand for luxury homes. The definition of value might shift, but the pursuit is constant,” concludes Dellis. With such strong undercurrents, the hunt for ‘value’ in luxury real estate is bound to remain an intriguing and ever-evolving quest.