While the coronavirus global pandemic has paralyzed most business sectors, surprisingly, the demand for luxury real estate continues to soar high.
Based on the survey conducted by marketing firm Luxury Portfolio International (LPI), at least 25.8 million wealthy households will be busy shopping for luxury properties in the next three years. The survey also shows that buyers' interest in grandeur estates will increase demand in the coming months.
Demand for High-End Properties
Caption:SAN FRANCISCO - MAY 26: A woman walks past luxury homes May 26, 2005 in the Sea Cliff neighborhood of San Francisco, California. According to a study released Wednesday by San Francisco's First Republic Bank, the average luxury home in the San Francisco Bay Area, which is defined as homes with values above the $1 million, rose nearly 6 percent between the fourth quarter of 2004 and the first quarter of 2005 to an average of $2.7 million, up $329,000 from one year ago.
In an interview with FOX Business, LPI principal researcher Chandler Mount said that despite the health crisis felt worldwide, the high-end real estate market is "as hot as he has ever seen."
The result shows that New York's Scarsdale is one of the communities that experienced an increasing demand for lavish properties. A 10,000 square-foot home with seven bedrooms and eight bathrooms in the said town is currently on the market for $8.7 million.
Mount, who has been observing the luxury real estate market for a decade, revealed that in the next 12 months, buyers would be are looking into purchasing properties in the short-term.
"There's a lag in terms of sellers, so there's going to be continued pressure on prices," he explained.
Meanwhile, a separate survey from real estate brokerage firm Redfin shows online home shoppers looking for seven-figure homes received a record-breaking high last January 2020.
The same survey shows that more than 10% of shoppers using the platform are looking for properties with a price range of at least $1 million, slightly increasing from the 8.5% data recorded last year.
Experts believe that the increase in demand for luxury properties is caused by the pandemic, leading homebuyers to look for more prominent space to stay in during the lockdown.
Luxury Resort Properties
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It is not the first time that luxury real estate properties recorded a higher demand during the pandemic. In October 2020, the rich and privileged are going on a multi-million dollar home shopping spree, and they are particularly snapping properties within exclusive resort communities.
According to reports, as the COVID-19 continues to force people to stay home and adapt to the "new normal," more buyers wanted to set their work-from-home lifestyle in luxury resort properties.
Real estate agents and appraisers across the country said that when Americans realized that the pandemic would take longer than expected, people opted to navigate their lifestyle expensive homes in Aspen, Colorado, the Hamptons, and at Palm Beach in Florida.
National Association of Realtors (NAR) chief economist Lawrence Yun told CBS News: "We are seeing greater sales gains in more expensive properties in areas people consider to be retirement destinations and resorts."
"I think this new economy and working from home can also mean working from a vacation home - that is, a larger size home with more elbow room that is in more of a vacation destination," he added.
Meanwhile, other real estate expert believes that the surge in demand for high-end properties is because rich people wanted to live in places with low COVID-19 cases.
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