Need More Space, Buy a Luxury Home
A year ago, for homebuyers, additional space and extra amenities had a somewhat different feel. Today, the health crisis has highlighted the importance of more square footage; and carefully planned floor plans. Home offices, multi-purpose spaces, gyms, and theaters are becoming increasingly common. In the luxury home market, some families find the space they need for these upgrades.
The Institute for Luxury Home Marketing (ILHM) explains:
“With quarantine concerns still top of mind for many luxury buyers, we see large, sprawling estates making their comeback.
For instance, the last six months have seen a resurgence in the buying of mega mansions and estate-size homes. Specifically properties that offer space (both inside and outside), separate home offices, gyms, and private amenities such as swimming pools, yoga studios, and recreation rooms.”
This was not the case at this time last year, as the most recent Luxury Market Report from ILHM emphasizes:
“Exactly one year ago, we reported that demand for large properties, mega mansions, private estates, and luxury ranches had reduced significantly over the previous few years; especially from the younger generation of luxury property buyers.”
WHAT IS A LUXURY HOME?
Just because a home has a “luxury” price while it is on the market does not necessarily mean the home is a true luxury home. A small house that may look great and be considered a luxury in a densely populated city may instead be considered a luxurious tiny home in another area where land is plentiful and therefore homes are expected to have plenty of square footage in addition to other luxury features.
The small luxurious house in an area with large luxury homes would not be able to get the same price as large luxury homes since home buyers in those areas want the extra space and that is the primary reason for them shopping for homes in an area with plenty of land available.
Generally, luxury homes are located where other luxury homes are situated and as a result, the prices of those homes have a tendency to support other luxury homes close by. Luxury homes have extra refinements that put them into a category of their own. Luxury features such as premium brand appliances, premium cabinetry, carpet, and flooring are often found in these homes. These premium features usually have better build quality associated with them in addition to longevity.
Home Equity
Continuous increases in equity could be what makes a move possible for today’s buyers looking for greater homes. Leveraging home equity simplifies down payments on a luxury home; while existing low-interest rates increase the affordability of mortgage payments over the past few years. The ILHM report also points out:
“Luxury real estate prices may continue to strengthen further into the third quarter, as the affluent continue to see large investment returns from the currently strong stock market.
Coupled with the low interest rates, the policies granting (and insisting) on working from home implemented by many employers; and the concerns of the pandemic, all translate to the affluent increasingly trading in their city lifestyle for a home that has it all.”
Buying a luxury home for you and your family represents a long-term investment that one should undertake with full knowledge of everything involved. It is clear that today’s strong home equity gains combined with record low-interest rates are a great time to enter the luxury markets in order to meet these changing needs.
Bottom Line
Buying a luxury home for you and your family represents a long-term investment that one should undertake with full knowledge of everything involved. If you are willing to take your breathing space in a larger home, let’s connect so that you can find guidance in the luxury home market.
