Quiet Luxury is Making Noise
Today’s affluent homebuyers are embracing the trend of “quiet luxury,” characterized by understated elegance and a ‘less is more’ mindset. In interior design, quiet luxury is often associated with natural high-quality materials such as rich wood, marble and stone; neutral and muted tones; and classic investment pieces that have timeless appeal.
Ostentation is out, and some luxury buyers are no longer prioritizing sprawling estates.
Record Demand for Luxury Items
Christie’s International Real Estate’s exclusive partnership with Christie’s gives us a glimpse into all things luxury, and Christie’s reports that while the art market saw a contraction in 2023, demand for jewelry, watches, handbags and wine showed no signs of slowing. The auction house predicts this thirst for luxury items will continue in 2024. In particular, colored diamonds and stones, unusual materials and sizes, limited and runway editions and other extreme rarities will be sought-after.
Gen Z is Ahead of the Curve
The oldest of Gen Z consumers, born between 1996 and 2012, are entering luxury real estate markets around the world.
In their choice of homes, Gen Z luxury buyers are prioritizing eco-friendly living, high-tech features, and homes that require little to no maintenance. To satisfy their desire to travel, they are also more interested in purchasing several smaller homes in multiple locations instead of one large estate.
University Towns: The Next Luxury Frontier
From Ann Arbor, Michigan to Athens, Georgia, university towns across the country have witnessed a boom in luxury home sales within recent years, as affluent buyers are seeking big-city amenities in small-town settings.
Healthcare, tech and the university economy fuel high-paying jobs that attract everyone from Millennials to those nearing retirement. Even buyers with no prior connection to the university are attracted to college towns due to lifestyle factors and a lower cost of living.
In Ann Arbor, average home values have increased 47% since 2018. And in both Ann Arbor transactions for homes at $1 million or more have tripled over the past few years.
High Demand, Low Supply Continues
Demand for luxury homes and estates was resilient in 2023, despite spiking interest rates and worries about inflation. While rates have stabilized and inflation is slowing, the supply/demand dynamic is expected to continue for the remainder of 2024 into early 2025.
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