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Luxury Homeownership: Sustainability a Key Building Factor, Covid Continues Impacting Trends

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Demand for luxury home purchases has not dwindled even as the pandemic’s volatile nature continues to pose challenges in real estate.

According to a 2022 State of Luxury Real Estate (SOLRE) report, authored by Luxury Portfolio International® (LPI), home prices in the segment are expected to continue increasing as supply struggles to meet high demand.

While most luxury buyers (74%) are still reporting strong personal economic confidence, 75% say they are very concerned their discretionary spending power could soon be tested. However, LPI forecasts that the market could stabilize in the near future even as the fast-paced market is expected to continue through 2022.

“After a record-breaking year in luxury real estate, we anticipate that some balance will be restored to the market,” said Mickey Alam Khan, president of LPI, in the report. “It is important to view the luxury market over a trajectory of several years, noting that half of 2020 was in paralysis due to the pandemic. The red-hot market that began in the latter part of 2020 continued into 2021 and will continue a positive trajectory into 2022. The difference will be that there will be more luxury sellers in 2022 than in 2021, and while there will be fewer actual luxury buyers, it is still a seller’s market.”

“The pandemic madness that drove us to an over-heated market is being normalized,” added Alam Khan. “Demand will remain strong, and a healthy, new normal in luxury real estate will start to take hold in 2022.”

What are the trends driving this increasing demand for homes in the luxury price point? According to the report, sustainability is a major component, with 75% of those surveyed for the report stating they will choose their next home with sustainability in mind, and 90% saying they will be factoring sustainability in relation to a “Next Chapter in Life” home search. Sustainability is particularly important in legacy homes, where homeowners plan to pass on the property to their heirs.

Among the concerns luxury buyers say they face are fear of missing out on the latest trends (26%) and having a space that can accommodate remote work (27%), the latter of which was cited as last year’s top considerations during the home search.

On a global scale, this segment of homebuyers is interested in purchasing across all price points, even as prices increased 33% year-over-year. Over 14 million affluent households are interested in purchasing a new home (6.4 million of which are in the luxury category), while 1.2 million luxury homeowners are interested in selling in the next three years—a 32% increase over last year.

But where is this segment moving? While suburban migrations have been popular amid the pandemic, LPI reports that that over half of luxury buyers globally (55%) expect to purchase their next home in a city, while 77% just want to be within commuting distance.

Shared living spaces are fading away as single-family homes grow in popularity—a trend led by North America but catching up in Europe and the Middle East where 40% of buyers seek the additional space and privacy, as well as in Asian-Pacific countries where 29% look to do the same.

While demand for homes continues to increase across the wide range of buyers in the luxury space, there’s been a surge in real estate priced under $1 million, signaling that upper-middle class buyers who delayed purchasing due to COVID are making their way back to the markets.

Learn more on RISMedia.

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5 ‘Selling Sunset’-Approved Rules to Acing a Real Estate Deal Today

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Netflix has finally dished up a fourth season of its hit show “Selling Sunset,” featuring real estate agents at the famed Oppenheim Group as they work hard to close deals in L.A.’s high-stakes luxury real estate market.

While this show is known for showing off multimillion-dollar listings and celebrity buyers, the new season also contains plenty of smart advice that just about any homebuyer could put to good use in this hyper-competitive market.

So no matter your price range, check out some of these tactics below to secure your dream home, straight from the stars of “Selling Sunset.” If it worked for them, odds are it could work some magic for you, too.

1. Never assume a home will be perfect

Think fancy homes always look perfect the instant you walk inside? Not according to “Selling Sunset” star (and new wife to Tarek El Moussa) Heather Rae Young.

In Episode 1, this real estate agent tours a $14 million property with her client, Karan. To be sure, the five-bedroom, six-bathroom home is modern and elegant, but it’s also a bit empty and lacking in color. To help stir up some excitement, Young encourages her client to think about how he’d “dress up” the space—particularly a unique water feature on the property.

“I was trying to think, like, what I would do here if I lived here,” Young says. “Maybe a tree, some fish.”

Her suggestions are a good reminder that although clever home staging might present the home of your dreams to a T, it might not—and you’ll have to tap into your imagination on how a home could look with your own personal touches.

2. Check what’s going up next door

Although Young’s client Karan is interested in the house she shows him, he does have one concern: Soon, another house will be built on the empty lot next door, potentially blocking his multimillion-dollar view.

“A big portion of this house is the view,” Karan says. “It’s like the main feature.”

To allay her buyer’s concerns, Young points out “the good thing is in this area, there’s a height ordinance, so I’m pretty sure it’s not going to block your view.”

After further research, Young learns that the maximum building height next door is 30 feet. To get a sense of how high this would be, she and Jasen Oppenheim tie helium balloons to 30-foot strings, then place them at ground level on the property next door.

Once these balloons show Karan just how tall the building next door will be, his concerns about a blocked view disappear. Karan ends up buying the house for $12.5 million.

Young’s balloon trick is a great reminder to consider future builds before buying. While a home might have a great location and a beautiful view now, it’s always wise to check if plans for new development are in the works—and, if necessary, to grab a few balloons to know exactly how high it will be.

3. Be aware home prices can appreciate, fast

Think a home is just a roof over your head? On the contrary, it can be a great investment that appreciates faster than you think. Just ask Emma Hernan, a new agent on “Selling Sunset” who’s working to sell a six-bedroom, eight-bathroom home owned by the DJ Alesso.

Hernan had sold this house to Alesso just two years earlier for $5,850,000. Now, he’s ready to sell—and is pleasantly surprised when Hernan suggests they list it for $6,495,000. That’s quite a markup!

Yet Oppenheim agrees: “The market’s going up; that’s not unreasonable.”

While aspiring homebuyers might stress about the sky-high home prices they’re facing, the good news is that real estate tends to maintain its value, or it can go up a lot. Keep that in mind before you decide to stick with renting instead.

4. In today’s market, homebuyers must move fast

The cast of “Selling Sunset” usually spend their time showing clients homes, but agent Chrishell Stause ends up touring a four-bedroom, 3.5-bath house that she wants to buy for herself. Even with a list price of $3,699,000, she knows it will go fast.

“If I’m putting in an offer, I need to decide quickly because this is supposed to hit the market tomorrow,” Stause says to fellow real estate agent Mary Fitzgerald.

“It’s going to sell fast,” Fitzgerald says. “There’s no doubt.”

Sure enough, Strause is beaten to the punch by another buyer, proving that indecision can be a major handicap in a competitive market. Don’t delay!

5. Drop contingencies to stand out from higher offers

While Stause is disappointed to learn that she didn’t get the house she loved, she soon bounces back and finds a new home she adores just as much. The four-bedroom, 4.5-bathroom home in Hollywood Hills is gorgeous, and while she doesn’t want to pay full list price, she does want to sweeten her offer by dropping contingencies.

“Contingencies are put into a contract to protect the buyer,” Stause says. “As an agent, I wouldn’t necessarily recommend this to everyone, but I know the field, and so even though it’s a risk, I think it’s a very calculated, smart risk.”

Oppenheim agrees with her, although he says she should keep a seven-day inspection contingency. In the end, the sellers accept her offer and Stause buys the home for $3,350,000.

Keep reading on Realtor.com

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As Featured in West + Main Home Magazine: Holiday Gift Guide

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Our Favorite Trends for the Festive Season: Handcrafted + Homemade gift inspo

We're big fans of shopping small + supporting local artists, crafters + makers...whether we get the chance to wander around the booths at our favorite art markets or explore Etsy looking for the perfect something special for someone we love.


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This Report From CPR Made Us Feel Better About the Lack of Snow

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The message from scientists on Colorado’s lack of snow so far: Don’t panic

Last week, a blizzard warning was issued for the mountains — of Hawaii. But as the tropical state dealt with flooding and high winds, Colorado has been pretty bone-dry. Denver has set a modern-day record and gone nearly 230 days without any measurable accumulation. Fortunately, it seems like that record’s days are numbered with a winter storm expected later this week.

After nearly two weeks of mostly dry conditions, snow fell in the high country last night. And everyone, from skiers to water managers, wonders what the rest of winter might bring in Colorado.

What is snowpack and how’s it looking so far?

Quick primer: Snowpack isn't the same as the amount of snow that falls. Instead, think of it as layers of snow that accumulate in mountain areas. And that impacts everything from soil to wildfires throughout the rest of the year. More on that later.

For now, Colorado has about half the snow that usually accumulates in the mountains during a typical year. But Joel Gratz, founding meteorologist of OpenSnow, says it’s far too early to panic.

"Starting out a year below average — and even well below average — is not unheard of,” he said. “Maybe about a third of the time in the last 20 years we've seen something like this. So it's not time to sound the alarm just yet, but it's not a great start.”

Of those seasons that started similarly, some went on to catch up, but others didn’t. We’ll just have to wait and see. 

Much of the Mountain West looks the same right now, and it’s too soon to know what the broader implications are. “At this point, we don't know if this slow start is indicative of any long term-trend,” Gratz said. “Based on past data, it doesn't seem like it is.”

What do we know about the potential for snow?

The reality is there’s no way to tell what’s in store for the rest of the season. Meteorologists aren’t able to forecast conditions month-to-month, however they do know we are experiencing a La Niña winter.

“That generally favors above-average snowfall for the northwest, from Idaho to British Columbia,” Gratz said. “But La Niña doesn't help or hurt us in Colorado much.”

That’s because we’re on the edge of that climate pattern. Big snowstorms along the Front Range — especially in the spring — are not common with La Niña. Gratz said those are more frequent during El Niño seasons.

But the state is also contending with the effects of climate change. 

“While we will still get these winter storm patterns and we will still get snow and cold, we are just getting an increasing frequency of these warm anomalies as well,” assistant state climatologist Becky Bolinger told Colorado Matters. 

The good news is there’s still plenty of time for Colorado to catch up. Our state usually sees its deepest snowpack in April.

Why does this matter for Colorado’s water supply?

This week’s snow will certainly help the state rebound from a dry spell and alleviate drought concerns. Another, stronger storm is on its way that will likely bring snow to the Denver area. 

It could arrive in the mountains as early as Wednesday night, with 10 to 20 inches possible by the weekend in some areas — particularly further west and south (think: Telluride and maybe even areas like Crested Butte and Steamboat Springs).

“Overall, when you look at the 7-day period, they're looking to get about two to three inches of moisture,” Bolinger said.

And that moisture is what’s really critical. 

“When we're talking about snowfall, we always refer to snowpack because snowpack tells us about the amount of water that's in the snow, and that's going to be super critical for our water supplies,” Bolinger said. 

She basically looks at the snowpack like Colorado’s water savings account that builds up over the winter and pays out in the spring. “So the better that snowpack is, the more water there is in that snow, the more runoff and water supplies we will get.”

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Colorado Gives Day is December 7th!

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Colorado Gives Day makes good happen for more than 3,000 local nonprofits.

What began in 2010 has grown to one of the largest giving days in the US. In 2020, the annual statewide movement raised more than $50 million in 24 hours. This celebration of giving helps donors give where they live to the causes they care about most.

Visit ColoradoGives.Org

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