Luxury homes weren’t seeing too much interest at the end of 2018. The US real estate market was comprised heavily of first-time buyers searching for lower-priced homes, and the luxury market slowed considerably. But a shift in the market and buyer interest shows that luxury real estate might be poised to make a comeback in 2020.
What Is Luxury Real Estate?
From a general real estate standpoint, homes priced in the top 25% of a price range for a particular area are considered “premium” or “luxury” homes. That being said, the definition of luxury living will vary from city to city, region to region, and even buyer to buyer.
Here in the Triangle, that “premium” price tag could even start as low as $750,000.
Luxury is back on the market
According to the Institute for Luxury Home Marketing (ILHM), there has been a definite upswing in both luxury single-family and condo sales, so it’s a good time to make a move in the high-end price range.
It’s a Smart Time to Enter the Luxury Market
If you’ve been considering investing in a high-end property or trading your old home for something with a bit more space, now is the time! High inventory and favorable buying conditions make 2020 a fantastic year to invest in premium real estate.
Interest rates are low
In fact, interest rates aren’t just low; they’re near historically low—which means it’s a pretty ideal time to invest in any kind of real estate. At any price point, you will ultimately be paying less for your loan when rates are this low. And when you’re working in a luxury price range, that translates to a lot of money.
Inventory is high
Lower-priced homes have been in high demand for some time now, which has led to a shortage in inventory. The high-end market, however, is not experiencing this same deficit, thanks, in part, to the market slowdowns of 2018 and early 2019. For buyers, this means that despite the increasing competition, there are still plenty of choices!
Buying power & affordability are increasing
Despite a steady rise in home values over the course of the last handful of years (great news for homeowners!), homebuying is actually becoming more affordable for many buyers! How is this possible? Well, for one, lower interest rates make mortgages more accessible. And for another, an increase in average wages gives buyers more room in their budgets to spend on housing.
Luxury Real Estate in Smaller Cities
Not only is luxury investing making a comeback, it’s growing in popularity in smaller cities, too. Because prices in smaller cities tend to be more affordable, buyers are able to find better deals and purchase more house at the same cost.
Luxury investing in Raleigh
Raleigh is a great example of where small-city luxury real estate is really flourishing. Affluent communities like North Raleigh, Cary, Chapel Hill, and Wake Forest have strong, yet affordable, high-end markets with price tags starting in the low to mid $700s and climbing into the multi-millions.
One of the great things about investing in the Triangle is how much value you really will get, especially compared to larger markets. A million dollars, for example, might get you a lakefront estate or a brand-new ultramodern condo in Cameron Village. It might get you a historic stone manor or backyard tennis courts or 60+ acres of breathtaking countryside complete with horse facilities. There’s a lot out here… and the prices are fantastic.
Ready to Get in on the Luxury Market?
If you’re thinking of investing in a luxury home in Raleigh or the Triangle, Linda Craft & Team is here to help! Our partnership with Luxe Global, coupled with our 350+ years of combined experience, gives us a highly competitive edge—and you an unparalleled investment experience. Contact us today to learn more or get started.