The real estate world is in flux. With foreign investment rules evolving, tax rates changing and mortgage interest rates fluctuating, there are many market factors impacting luxury buyers and sellers. But if there’s anything we’ve learned from this year, it’s that buyers are still purchasing properties they consider well-priced, that offer potential for investment and feature the perks that have become synonymous with the high-end lifestyle.
The Berkshire Hathaway HomeServices network continues to bring luxury transactions together seamlessly, with its strong financial footing and steadfast commitment to the core values of trust, integrity, stability and longevity.
In our annual luxury report, we explore how buyers in the United States are taking advantage of currency fluctuations and are looking to dream destinations like Spain and Portugal to find their slice of paradise. Even though Golden Visa opportunities have scaled back in some countries, the demand for luxury properties abroad remains strong.
Stateside, we are seeing these changes impact local markets, too. In Los Angeles, where a new mansion tax has been implemented, savvy buyers and sellers have come up with ways to lessen the burden.
The post-frenzy inventory increase we’ve all
been waiting for hasn’t materialized. Areas of the market that got a boost from the Covid-19 work-from-home culture—namely the Caribbean and second-home markets like Aspen—have cemented themselves as permanently popular second-, third- and fourth-home locales for the wealthy. While these dreamy destinations remain strong, luxury buyers are showing an increased interest in cities, too, as they go back and forth to their offices.
What all this means is that despite a somewhat unclear economic future, and some geopolitical unknowns, we haven’t seen the market dip significantly, even in the super-luxury sector. We may not be seeing the sight-unseen bidding wars of years past, but well-priced, well-staged, well-equipped and well-located homes are moving and they’re demanding a premium.
And when it comes to trends in those homes, we’ve seen sustainability in design and decor, wellness at home and the trend of “quiet luxury”—rather than flash— become permanently inscribed on the wish lists of high-net-worth buyers.
Luxury houses are available in more places than ever before, and we’re here to help.Christy Budnick CEO, Berkshire Hathaway HomeServices Left: This seven-bedroom Montecito, California, home is the type of super-luxury property that continues to attract buyers despite some macro uncertainties.
Super-Luxury Soars, Defying Economic Slowdowns
The Low Inventory Factor: Post-Peak Global Sales and Pricing Stay Stable
Hooked on Europe: Regulation Changes Won’t Stop Foreign Sales
Tax Facts: Changes Ahead For Homeowners
Buyers and Renters Still Sold On Caribbean Vacation Homes
Interstate Migration Made Easier
The Hottest New Amenity Could Be Proximity to a Private Airport
Despite Some Scaling Back, 'Biohacking' and Other Wellness Amenities Rise to the Top
Luxury Hits Home
Super-Luxury Soars, Defying Economic Slowdowns
Despite growing inventory and higher interest rates, the top end of the luxury market remains robust and healthy as a whole. Whether in traditionally high-priced markets like New York City and South Florida or emerging areas such as Virginia Beach, it’s clear high-net-worth buyers and sellers are comfortable with current conditions and ready to be active in the market.
“We still have a very buyable market,” said Barbara Wolcott, chairman and CEO, Berkshire Hathaway HomeServices RW Towne Realty in Virginia Beach, Virginia. “We are still seeing multiple offers regardless of price point, all of
the way up to the highest ends of the luxury market.”
Ron Shuffield, president, Berkshire Hathaway HomeServices EWM Realty in South Florida, added that although sales in the $10 millionplus market were down 58% in the second quarter 2023 from the year-earlier quarter, pending sales are significantly up, potentially showing a tipping point that buyers are feeling like market conditions have settled.
He added that increasing inventory over the last 12 months has encouraged some luxury buyers to explore transactions, even in spite
of monthly payments going up as much as 50% from 18 months ago, mostly due to rising interest rates.
“Buyers have lost a third of their buying power, and (it’s important to remember that) buyers have lots of other things connected to interest rates (businesses, other properties, etc.) even if they’re paying cash,” he noted.
Buyers are also likely being enticed by stronger inventory numbers with MiamiDade County showing a 15% increase in the second quarter 2023 from the year-earlier quarter in the $5 million-$9.9 million price range. Inventory in the $10 million-plus category is up 30% over the same period.
Where Shuffield sees particular strength is in South Florida’s condo market, where as of the second quarter, there were 57 pending sales over $10 million, representing a pace more than twice that of single-family homes. More condo buyers are living in them fulltime, whereas previously they were primarily second residences. “Each condo building has amenities like a mini country club,” he said.
While waterfront property in South Florida will always remain strong, Shuffield noted a shift to downtown Miami because that’s where some of the newer offices and businesses are, and it’s closer to a larger hub of activity
in Manhattan are now in the $20 million-$30 million range as opposed to $10 million-and-up, experts say.
compared with the beach areas. He cited local market data continuing a decade-long trend of condo sales representing as much as 60% of the overall market.
Condos Also Driving NYC Market
Brad Loe, executive vice president and director of sales, Berkshire Hathaway HomeServices New York Properties, said New York City’s luxury market is only getting stronger, especially as new construction condos drive the highest-level transactions.
“People are coming back and we’re in a good place in the city right now,” he said.
He said that as of late July 2023, there were a little more than 450 active apartments and townhouse listings above $10 million in Manhattan, with around 130 pending, which represents a small decline from the start of the year. He added that buyers are not getting as much value as they used to at the $10 million level, now moving up to $20 million and $30 million for what’s traditionally considered “superluxury.” Amenities like pools in the basement, penthouses with 360-degree views and specialty dining rooms are now all expected at this price point.
“The cost of all of this isn’t going down,” Loe said.
Weakness in the Dollar Curbing Hawaii Interest
Perhaps the one area where the superluxury market is cooling quickest is in Hawaii, where a strong U.S. dollar and soft momentum from reopened borders slowed sales in the $5 million-plus category.
“Condos in the metro area are usually international—with a big following from Japan and Korea,” said Kalama Kim, president, Berkshire Hathaway HomeServices Hawai’i Realty. “But, we haven’t seen as much activity because of the strength of the U.S. dollar over the last couple of years.”
He noted that even though super-luxury sales are down slightly on the most populous island of Oahu, they’re still on track compared with last year. He also cited that the pandemic trended toward sellers holding onto prized properties. In Honolulu, specifically, single-family home sales in the $5 million-plus category are down 44.7% in unit sales year over year.
“We thought we’d see international owners sell, but that hasn’t happened, they probably just want to keep and enjoy their homes rather than sell them,” Kim said.
Naples: The Epitome of Ultra-High-End Florida Migration
However, for a market like Naples, Florida, a lead example of interstate migration, there is still immense interest.
“Our out-of-state market comes from the Midwest, but we’re starting to see buyers come from California looking for a second home, and that money is driving up prices,” said Rei Mesa, president and CEO, Berkshire Hathaway HomeServices Florida Realty.
Naples’ super-luxury offerings are typically trophy homes and condos, usually on the water, and often endure major demand as supply at the $10 million-plus price point remains limited.
As a result, higher prices are spreading to areas such as Melbourne on the other side of the state.
Mesa also noted that the early 2025 arrival of a new Four Seasons Hotel and Residences is driving top-level demand in the condo market, even in an area with two well-established Ritz-Carlton Residences.
“Demand has been overwhelming for them at the Four Seasons,” he said.
There is a larger rebuilding trend sweeping through the whole Naples area, whether the city proper, or in Sanibel Island to the north. Properties more than a decade old are being modernized, not just for modern amenities, but to meet the need for climate resilience.
“There is a big focus on hurricane resilience and building homes with materials that use less energy,” Mesa said. “Homeowners are getting very creative with building.”
We’re starting to see buyers come from California looking for a second home, and that money is driving up prices.”
Rei Mesa President and CEO Berkshire Hathaway HomeServices Florida Realty
Miami-Dade County SingleFamily Homes
The Berkshire Hathaway HomeServices EWM Realty
2023 Mid-Year Market Update compares the second quarter of 2023 with 2022. In Miami-Dade County, homes over $5 million are seeing more inventory, fewer sales, but higher prices.
$10 MILLION AND HIGHER MARKET
Miami: A Slight Normalization, With Lots of Movement at the Top
The luxury market in Miami-Dade County has slowed a bit after a couple of boom years, but the very top of the market is holding strong.
Looking at the number of sales of singlefamily homes in the super-luxury category (defined as $10 million and up), there were 14 sales in the second quarter of this year, compared with five sales in the second quarter of 2020, according to Ron Shuffield, president of Berkshire Hathaway HomeServices EWM Realty. And there were 15 condo sales over $10 million in the second quarter of this year, compared with three in the same period in 2020.
The number of luxury condo sales has catapulted in the past few years, and is now tracking with and very similar to singlefamily home sales, he said.
“We’re still seeing tremendous growth,” Shuffield said. “So many new buildings are going up. We’re about to see our first 100story building, the Waldorf-Astoria.”
TO $9.999 MILLION MARKET
In fact, Miami looks like a new city every month, he said.
Sale prices in the super-luxury category are down a bit, but the price-per-square-foot numbers have continued to rise.
The median price of a single-family home in the super-luxury market was $16.713 million in the second quarter of this year, compared with $17.28 million in the second quarter of 2020, Shuffield said. But the price per square foot has gone up 18% in the same period—$2,593 this year, compared with $2,205 in the second quarter of 2020.
Super-luxury condos have seen similar increases—$2,523 per square foot this year, compared with $2,255 in the second quarter of 2020, he said.
Before Covid-19 hit in March 2020, “we had a ridiculous amount of inventory—80 to 90 months of supply,” Shuffield said. “Then abruptly, beginning in June 2020, the bottom started falling out, and we had a feast of buyers for two years.”
Interest rates even affect the top of the market, he said. “High rates put a wet blanket on everything. Going from 3% to 6%—that definitely had an impact.”
Second homes are more like half-andhalf homes. “Now we’re seeing people living in their units more months of the year. You used to be able to drive around at night and see which buildings had their lights on at night. It was barely 20%. It’s much higher now.”
Three years later, the many who moved full time to Miami during the peak of Covid are not moving back, Shuffield said.
Ten to 15 years ago, all of the high-end luxury was on the waterfront, “literally on the sand,” he said. “Now we’re seeing very expensive units on the mainland,” especially in downtown Miami.
The downtown core luxury condos are selling briskly “because people want to be close to their office, and to all of the restaurants and shops and other things to do in downtown Miami.”
Continuing the trend that began during Covid, buyers are looking for more square footage, and combining units when they can, Shuffield said. “The CEOs and athletes that are down here now want lots of privacy and lots of space.”
The international market has begun to come back from Covid, he said. “We’re definitely seeing an uptick in foreign buyers.”
The Low Inventory Factor: Post-Peak Global Sales and Pricing Stay Stable
There was a big rush for luxury rural homes during the pandemic, as people swapped city life for country and coastal spots and slower living. But with city slickers returning to cities—for work and play—the markets all over are staying strong, due in large part to inventory shortages.
In Cape Cod and the greater Boston area, for example, the pandemic era saw huge demand for resort communities from buyers looking for high-end multigenerational homes.
“Those buyers were typically older with plans to buy in 2024-25 but the pandemic brought them forward,” said Emily Clark, president of Berkshire Hathaway HomeServices Robert Paul Properties in Cape Cod and Boston. The result: depleted inventory. Now, those who are no longer using their homes year-round usually rent them out, Clark said.
Inventory levels aren’t likely to rise as long as interest rates creep up. Clark said about 40% of the market purchases in Cape Cod and
In the New Jersey area, prices in the $1 million-plus sector are growing, with houses bought in 2021 now worth 25% more
the Boston area are with loans, and homeowners are less likely to sell as it means moving into a higher mortgage interest rate for their next home.
New Jersey’s suburbs and beach towns show a similar picture. Set about 65 miles from Manhattan, the region is accessible by ferry, car, train and bus. Its accessibility and lifestyle as well as the prosperity of buyers underpin its hot market. Three years after demand skyrocketed for New Jersey beach towns, inventory levels are low while houses continue to sell at record prices, and get snapped up quickly, said Richard F. Martel Jr., senior vice president and regional manager, Berkshire Hathaway HomeServices Fox & Roach, REALTORS® in New Jersey.
“People who bought here during the pandemic are staying and upgrading their homes [adding pools etcetera], while some are even trading up to larger properties in the area,” Martel said. While he agreed that higher interest rates affect supply, there are still plenty of buyers willing to pay over the asking price. “Prices keep rising in the luxury market [$1 million-plus], with properties bought in 2021 now at least 25% more expensive,” Martel said.
In Chicago, that rural boomerang has led to an increase in city and suburban
Well-heeled foreign buyers are looking for high-end vacation homes they’ll happily use for more of the year, and they’re finding them in Los Cabos.
“We’re finding that retirees, investors and a huge increase in European clients are interested in this region,” said Ian Gengos, owner of Berkshire Hathaway HomeServices Baja Real Estate. “They’ll spend six-plus months here because the weather is great and there’s something for everyone, whether you’re a foodie, a wellness seeker or an outdoor enthusiast.”
The types of homes available are just as varied as the buyers.
“There’s something for someone who wants a vacation condo, a principal residence or a collector property,” he said. “It’s a jewel-in-the-crown kind of place to add to your portfolio.”
But what drives home prices upward from $20 million is amenities, location and branding from such developers as Rosewood, Four Seasons, Aman Resorts and the St. Regis.
“There are large pieces of available oceanfront land and this is a limited—and hot—commodity,” he said.
The easy access to airports—the international airport is 90 minutes away in La Paz and Los Angeles is a mere 90-minute flight—and marinas that can accommodate ultra-luxury private yachts is another draw for those purchasing ultra-luxury properties.
During the coming year, Gengos predicts that there will be a small slowdown in terms of activity but no significant decrease in price point. “Our inventory has become somewhat depleted,” he said. “But we are replenishing to a degree.”
What sets Los Cabos apart, ultimately, is the plethora of aspirational properties in the region.
“People don’t want to go too far with their family to enjoy their lifestyle,” he said. “That’s become a real currency.”
buyers. “The return to work has been one of the biggest drivers of real estate demand in the luxury bracket. We now realize that our quality of life is so much better without a long commute, and people who work in the city are finding a better work-life balance by living in the city,” said Diane Glass, CEO of Berkshire Hathaway HomeServices Chicago. But, she added, “in a post-pandemic world, the suburbs have held their ground as luxury strongholds. Suburban luxury home prices are still near 2022 levels, and our agents are seeing a greater percentage of cash buyers.” There’s a steady supply of larger suburban listings priced at $4 million and above for buyers who want an extraordinary showpiece home on larger plots. “Overall, the slowdown in demand has been met by lower inventory, so we are still seeing short market times and even multiple offers. With the market cooling, there are opportunities for luxury buyers in Chicago and the suburbs as well as in Harbor Country, Michigan,” Glass added.
In Philadelphia and its suburbs, the trend of hybrid work and working from home means that people continue to have the flexibility to live and work differently, said Debbie McCabe, senior vice president and regional manager, Berkshire Hathaway HomeServices Fox & Roach, REALTORS®. House prices have continued to rise, fueled by the lack of inventory seen elsewhere. The only “bargains” at the luxury level are homes that need work. “There are many luxury properties that require updating. Many buyers today are not willing to take the time and money to do the work.” On the other hand, “we see homes that have been updated selling for top dollar,” she noted.
Outside the U.S., in the quaint colonial town of San Miguel de Allende in Mexico—famed for its artist community and an exciting culinary scene—the pace of the market has slowed slightly after record-breaking years, but it’s hardly stalling. “Most luxury home purchases we deal with are second homes bought by retirees from the U.S. and Canada. They buy with cash, so they are not affected by rising interest rates,” said Greg Gunter, a broker and owner of Berkshire Hathaway HomeServices Colonial Homes San Miguel. “In 2021, we had a record year for sales following the pandemic travel bans, and last
year there were three times the number of buyers purchasing homes priced over $1 million, compared with the year before. In 2023, it’s been harder to persuade people to buy overseas in a time of global economic uncertainty, but there have been no price reductions,” he said, adding that people only usually sell for health reasons, death or divorce.
High-end home sales in Montreal are still happening, but there are fewer of them, according to Sacha Brosseau, founder and CEO, Berkshire Hathaway HomeServices Québec.
“Rising interest rates in Canada have made people think twice before moving. Luxury home sales in Montreal and the surrounding areas [defined as more than C$2 million] are indeed lower than before,” Brosseau said. He predicts that when interest rates start to d ecline and keeping money sitting in the bank is not as advantageous, the number of sales in the luxury markets will increase as inventory rises.
After a frenzy, the luxury markets in New York City and its northern suburbs and exurbs are returning to normal—albeit with less inventory.
In the markets north of New York City— which saw frequent bidding wars during Covid-19—demand is strong, while inventory is not.
The luxury market in suburban Westchester County, defined as $3 million and up, “remains a very vibrant market, with very, very low inventory,” said Candace Adams, president and CEO, Berkshire Hathaway HomeServices New England Properties, New York Properties, Hudson Valley Properties. The Hudson Valley, north of Westchester, is still seeing a steady flow of luxury buyers migrating out of the city, but inventory is down there, too.
“Buyers are looking for more space still, an at-home office, they love pools and any type of resort living in their own home, great schools and good commutability. Now that means up to two hours,” she said.
Houses priced well still draw lots of interest, she said, citing a recent $1.8 million Westchester home that had 32 showings and 11 offers. In general, though, homes that got 10 offers during the peak might be getting five offers today.
Along with New York City, buyers are coming from California, Texas, Nevada and “some boomerang from Florida,” she said. “It’s political and it’s climate change. The remote workplace has really supported that market, too.”
The number of sales outside the city is down significantly, though. In some cases it is due to a lack of inventory. In Westchester, overall sales are down 37% year over year; in Hudson Valley, they’re down 21%.
The rental market for luxury properties in Westchester, especially for homes valued between $1.5 million and $3 million, remains strong, she said.
The demand for second homes has moderated slightly. “People are still maintaining some sort of presence in New York City, but they may be downsizing to a studio or a one-bedroom,” she said. That is fueling the pied-à-terre market in New York City, according to Steven James, president and CEO, Berkshire Hathaway HomeServices New York Properties.
New York City is far from slowing, he said, pointing out that cash is king. Two-thirds of recent luxury sales (defined as $4.6 million and above, with a $6.7 million median) in Manhattan were all cash, he said. “It’s a very healthy market.” Inventory during the second quarter of 2023 was down year over year but up over the previous quarter, he said. “There is a tiny bit more inventory, but it’s not great stuff. Properties that need work are sitting. In my personal book, that’s where the bargains are.”
He also sees bargains on Park Avenue and other parts of the Upper East Side. “Prices have come down, sometimes enormously,” he said. The Upper West Side is still very strong, and so is downtown, “especially the new developments, and it’s usually younger buyers.” Overall, “there’s been a bit of a standoff between buyers and sellers,” with the market being a “breath away” from a seller’s market.
Luxury buyers in New York City are mostly local, he said, but he is also seeing buyers from the West Coast and the Midwest. “They ostensibly come for a pied-à-terre, but I think it’s more of a test of where they want to move to,” he said. Foreign buyers represent less than 5% of the luxury pool, he said.
“I would say the market is cautiously steady,” he said.
Overall, the slowdown in demand has been met by lower inventory, so we are still seeing short market times and even multiple offers.”
Diane Glass CEO Berkshire Hathaway HomeServices Chicago
SPOTLIGHT GLOBAL LUXURY LANDSCAPE 2023
Hooked on Europe: Regulation Changes Won’t Stop Foreign Sales
Greece, Portugal and Spain have seen a booming luxury property market in the past few years, driven significantly by overseas buyers and a strong U.S. dollar that left Americans with increased purchasing power.
Many international buyers are particularly drawn to destinations that offer favorable residency options or citizenship-byinvestment opportunities like Europe’s Golden Visa programs. “Ongoing volatility is amplifying security, political and economic risks, prompting affluent families globally to diversify their domicile portfolios via investment migration to enhance economic mobility and protect their lifestyles, wealth and legacies,” according to the Henley Private Wealth Migration Report 2023.
Greece, Portugal and Spain all ranked in the top 15 countries with a projected net inflow of more than 100 high-net-worth individuals in 2023, according to Henley. Greece came in at number seven worldwide, with a projected inflow of 1,200 HNWIs in 2023, up 20% from 2022. Portugal ranked ninth, with a projected inflow of 800, down from 1,400 in 2022. Spain ranked 14th, with a projected inflow of 400—an increase of 100% from 2022. These numbers may reflect changes to the popular Golden Visa programs: Portugal’s current program is set to expire, while the minimum investment recently doubled from €250,000 to €500,000 in certain regions of Greece, pushing some investors toward Spain.
Regardless of these changes, demand from overseas buyers remains strong across all three countries. In Portugal, sales reached a five-year high in July 2023, said Michael Vincent, CEO of Berkshire Hathaway HomeServices Portugal Property.
Well into the second year in which a strong U.S. dollar has tempted American buyers to invest in properties overseas, Portugal is still experiencing a boom. “Every day we’ve got American clients,” Vincent said. “I’d say roughly 35% of our buyers are coming from the U.S. and that’s from all over—Texas, California, New York.”
Effects of the Strong Dollar
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High-Net-Worth Buyer Inflow
Berkshire Hathaway HomeServices network members say U.S. dollar value helps move the needle. Investment migration consultancy Henley & Partners ranks countries based on buyer inflow.
#7 2023 projected inflow of HNWIs: 1,200
GREECE #7 2023 projected inflow of HNWIs: 800
2023 projected inflow of HNWIs: 400
Henley Private Wealth Migration Report 2023
Private Wealth Migration, Past and Forecast
American buyers are attracted to Portugal because of the alluring lifestyle it offers, as well as its stability at a time of political and economic upheaval in many parts of the world. “Portugal was awarded the No. 1 place to retire to last year…It’s seventh on the Global Peace Index, so it’s a very safe place,” he said. Being surrounded by the sea, with a great quality of life and great food doesn’t hurt either, he added.
The purchasing power of the U.S. dollar also means American buyers have their pick of some of the country’s finest properties. “$500,000 gets you a beautiful threebedroom villa with a swimming pool, which I’d say four years ago wouldn’t have been the case,” he said. “You’d get half the size.”
In early 2023, Portugal’s premier announced plans to end the Golden Visa program, and that plan created “a bit of a mad rush” in the months that followed, Vincent said. “But it hasn’t really stopped sales. People are still buying houses because they want to invest and make some money.”
While the option for a straight swap cash purchase of real estate for a Golden Visa is ending, “there are many other options available to obtain a Golden Visa,” Vincent said. “A person can buy into a non-real estate fund for example, which is based in Portugal. This is what people are doing now and we are more than happy to guide our clients through this process.”
For American and many other overseas buyers, the Golden Visa was never the primary draw of Portugal, Vincent added. Many are second-home buyers who are
content with the ability to spend 90 days out of every 180 in the country. For those who plan to spend more than three months at a stretch in Portugal, “you’ve got the D7 visa, which is very easy to obtain.”
“We’re very excited,” he concluded. “I only see [sales] increasing.”
The strength of the U.S. dollar against the euro may have eased off slightly in 2023, but that hasn’t deterred savvy American buyers from acquiring properties in Spain. “From March until November 2022 we experienced a very strong dollar that was even higher than the euro for about two months,” said Bruno Rabassa, CEO of Berkshire Hathaway HomeServices Spain. “This circumstance, together with post-Covid mobility conditions, led to a boom in purchases by foreigners,”
In 2022, the launch of direct flights between New York and Palma de Mallorca led to a 400% increase in visits to properties in the area from American buyers. 400%
London: Luxury Buyers and Renters Return—In a Big Way
As international buyers come back into the London luxury market, certain areas of the city are coming back to life with them. Knightsbridge, for example, an area popular with the well-heeled international crowd, is seeing a boom, according to Martin Bikhit, managing director, Berkshire Hathaway HomeServices London.
Middle Eastern buyers, long fans of London, are back in a big way, he said, after taking a couple of years off.
London luxury seems to be “reasonably resilient” and not affected by interest-rate rises, Bikhit said. “In a low interest-rate environment, purchasers were simply borrowing for convenience, so that they didn’t have to tie up their capital.” Those buyers are now just choosing to pay cash instead.
One of the strongest parts of the market is the highest echelon. “The best in class in the best location, a once-in-a-generation opportunity— those properties are trading very well,” Bikhit said. “The best house on the best street or the best apartment in the best building—they always tend to trade well and get multiple offers.”
Within the luxury market, there are two distinct types of buyers, Bikhit
said. “There are families who want a generational home, a trophy home that they will keep for generations. Those go for £50 million and upwards.”
Then there are those buyers who want something like a fullservice hotel, with staff and lots of amenities, a “lock-and-leave type of property,” he said. Depending on the neighborhood, these would go for £5 million to £10 million.
As far as inventory, the current new construction pipeline is coming to an end and there are new restrictions in certain parts of London “where you can’t build anything larger than 200 square meters, or 2,100 square feet.” So, with a finite supply of those large luxury houses, “we think they will continue to appreciate in value,” Bikhit said.
A lot of people who took flight to the countryside during Covid-19 have discovered they’re not cut out for that lifestyle and are coming back to London, he added, increasing prices with their return.
Interestingly, the rental market for luxury homes is “just insane,” he said. Rents have shot up 22% to 27%, compared with the lows of 2020 and prices have reached record levels.
and it’s continued to the present day: Many potential buyers notice that their dollars in Spain stretch a long way, and real estate taxes are low, he said.
Last year, the launch of direct flights between New York and Palma de Mallorca saw interest from American buyers skyrocket, leading to a 400% increase in visits to properties in the area. “U.S. citizens are discovering the second most visited country in the world, along with our unique lifestyle and the amazing connections we have—and all that led to sales,” he said, adding that in 2023 Berkshire Hathaway HomeServices Spain recorded a notable increase in visits from U.S. buyers to properties in Madrid and Barcelona and especially in Mallorca, Málaga, Costa Blanca and Marbella, all of which are coastal communities.
“Clients who were interested in Portugal and Greece are asking us for properties to qualify for the Spanish Golden Visa program,” Rabassa said.
The future of Spain’s own Golden Visa program remains uncertain after inconclusive elections. However, Rabassa said that whether
or not suggestions of raising the minimum investment from €500,000 to €1 million, or even ending the program entirely, are eventually implemented, it is unlikely to have a major impact on sales—or prices.
The favorable price of luxury properties in Greece, coupled with a strong dollar, are increasingly attracting the interest of U.S. buyers, who traditionally favored Spain and Portugal. They are now among the top-10 investors in Greek property, having significantly increased their presence in the last few years, said Kyriakos Xydis, managing partner at Berkshire Hathaway HomeServices Athens Properties.
Last year alone saw an uptick in U.S. buyers of between 15% and 20%, he said, particularly in the luxury market. Despite changing market conditions in Greece, including higher interest rates, demand from Americans and other international buyers remains consistently high, with a particular focus on properties located in areas with strong tourism appeal. The most popular regions for international buyers investing
in the luxury market include Athens, the
in the luxury market include Athens, the city’s southern suburbs—known as the Athenian Riviera—the northern suburbs of Attica and the gorgeous Greek islands, especially the Cyclades, Mykonos, Santorini, Paros, Crete, Corfu and Rhodes.
Several of these areas have been affected by recent changes to Greece’s Golden Visa program. In August, the minimum investment doubled from €250,000 to €500,000 in the central and south sectors of Athens, as well as Mykonos, Santorini and the Municipality of Thessaloniki, the country’s second-largest city after Athens.
“The luxury market in Greece starts at €500,000,” he said, meaning that buyers in the market for a beautiful villa on Mykonos or an upscale apartment on the Athenian Riviera will automatically be eligible to apply for the Golden Visa under the new rules.
Yet Greece still saw an increased number of Golden Visa applications during the first seven months of the year, in the run-up to the change, Xydis said. “We do expect the demand to decrease during the next months,” he added.
In August 2023, the minimum investment doubled from €250,000 to €500,000 in the central and south sectors of Athens under
The Legacy of Europe’s Golden Visas
After urging from the European Commission, the sun seems to be setting on Europe’s Golden Visa programs, which enable nonEuropean Union citizens to secure long-term residency—and in many cases citizenship—in return for investments. The long-running programs—which include various types of investment, the most popular being real estate—have attracted buyers from around the world to Europe over the past decade, resulting in estimated investments of more than €3.5 billion annually between 2016 and 2019, according to the European Parliament. Even as some residency programs come to an end—amid security concerns raised by the Commission—their impact and legacy remain.
In response to skyrocketing home prices in recent years, Greece, Portugal and Spain— the three most sought-after countries in which to invest in Europe’s Golden Visa programs—have made, or are in the process of making, significant changes to their offers. All three countries’ Golden Visa programs offered long-term residency permits in return for real estate investments of between €250,000 and €500,000. Investors were eligible to claim citizenship after five years, depending on the number of days they spent in the country each year.
In February 2023, Portugal announced that it was planning to conclude the real estate investment strand of its Golden Visa program, which has brought an estimated €5.8 billion into the country in real estate purchases over the past decade, according to Investigate Europe.
Separately, Greece’s Golden Visa program has been restructured, doubling the minimum real estate investment from €250,000 to €500,000 in the areas of the country most popular with international buyers. Greece’s
popular program has granted residency to an estimated 9,000 non-EU citizens since 2014, resulting in around €3 billion in real estate investments.
Change is also in the air for Spain’s increasingly popular program. Suggestions for reforms floated in parliament earlier this year included doubling the minimum investment from €500,000 to €1 million or canceling the program altogether.
These announcements have led to an uptick in applications for Golden Visa programs in all three countries in 2023, according to reports. While Chinese citizens make up the majority of applicants in Greece, applications from high-net-worth U.S. citizens have increased in recent years—740% in 2021 alone, according to investment immigration firm Astons.
The opportunities presented by the Golden Visa attracted the attention of international buyers and boosted sales in areas such as Lisbon, Porto and the Algarve, said Michael Vincent, CEO of Berkshire Hathaway HomeServices Portugal Property. But the program’s main legacy lies in the attention it brought to Portugal, and its beauty, safety and high quality of life. “What the Golden Visa has done is given a little push toward Portugal,” he said, “and now it’s a domino effect, which is continuing on.”
Tax Facts: Changes Ahead For Homeowners
Changes to tax regulations in the Bahamas, Spain and Los Angeles are impacting homeowners. Meanwhile, in many U.S. states, sharp increases in the assessments used to determine the market value of properties have led to sudden spikes in property tax bills, prompting proposals that seek to counter the dramatic peaks and troughs caused by swiftly heating or cooling markets.
A New Wealth Tax in Spain?
A proposed asset tax in Spain may affect high-net-worth property owners permanently, starting in 2024. Spain’s coalition government announced in September 2022 a proposed 1.7% tax for Spanish tax residents with worldwide holdings of between €3 million and €5 million; 2.1% for those with holdings of between €5 million and €10 million and 3.5% on individuals with a net wealth of more than €10 million. The tax also applies to nonresidents with net Spanish assets exceeding €3 million.
Spanish tax residents can claim certain exemptions, including reducing their general taxable base by €700,000 and deducting an additional €300,000 from the net value of their main home, meaning that in practical terms the tax will primarily affect those with a net value of €4 million and above.
But, following a trial period in 2022 and 2023, it remains to be seen if the tax will be implemented in 2024, after July’s elections ended inconclusively. “Everything will depend on the political party that manages to take over the Spanish government,” said Bruno Rabassa, CEO of Berkshire Hathaway
HomeServices Spain. If Pedro Sánchez renews his position as prime minister, he said, the tax will continue to apply.
However, if opposition candidate Alberto Nuñez Feijoo comes out on top, he plans to repeal the tax, Rabassa said. “In any case, we have not noticed a significant decrease in the purchase of properties by high-networth individuals.” Spain’s property taxes are significantly lower than those in many other countries, he added, “tipping the balance in our favor.”
Small Rise in Bahamas Sales and Property Taxes
In July this year, a new tax policy came into effect in the Bahamas, adjusting the value-added tax paid on real estate sales so that international buyers pay 10% on all properties valued at over $100,000. Previously, properties valued at below $1 million were subject to lower tax rates, calculated on a sliding scale. This scale now applies only to Bahamian buyers.
At the same time, the property tax cap rose from $120,000 per year to $150,000 per year. “Real Property Tax is a graduated tax on the value of the property, but it works out to roughly 1% of the property value per year,” said Jim Bernard, president, broker and appraiser at Berkshire Hathaway HomeServices Bahamas Real Estate. “Therefore, the increase in the maximum Real Property Tax cap will only affect the very high-end property owners and the general feeling is that a $30,000 annual increase in cost on properties of that level will not have a substantial effect.”
Which of these three factors affect your clients' real estate decisions more?
A survey of Berkshire Hathaway HomeServices network members looked at what's impacting clients.
Los Angeles’ Mansion Tax Takes Effect
People in Los Angeles rushed to unload their mansions before a new tax deadline in April 2023. The tax, called ULA, which is set at 4% on the sale of properties listed between $5 million and $10 million, and 5.5% on those over $10 million, had an impact on the market leading up to and immediately after its implementation. According to Martha Mosier, president of Berkshire Hathaway HomeServices California Properties, in March 2023, “we saw a significant spike of 51 sales over $5 million and under $10 million.” A spike in properties sold over $10 million saw 13 sales closing days prior to the implementation of ULA (versus eight in March 2022). April 2023 and May 2023 saw only one sale over $10 million, and nine over $5 million, she added. Over the summer, numbers inched up slightly, but they’re still “down significantly from 2022,” she said.
Approaches toward avoiding the tax are emerging. Aside from a new spate of properties priced at just under $5 million, sellers are employing strategies such as separating properties into lots or dividing a property between two spouses who can sell shares separately. “Some sellers are negotiating with buyers to pick up this additional tax as part of the sale,” Mosier added.
In the long-term the market will adjust, but the tax may have some lasting effects—assuming continuing lawsuits don’t put an end to it.
Soaring U.S. Property Taxes Prompt Action
Property reassessments in the wake of the pandemic market boom have meant skyrocketing taxes in many U.S. states, leading to a range of proposals aimed at curbing rising costs.
In Ohio, where some counties expect assessed home values to increase up to 40% in January, leading to a property-tax bill up to 42% higher for some homeowners, policy makers
introduced a bill to require the tax department to calculate values based on three years of home-sale data, instead of the most recent year. The measure would lower an expected increase in Butler County from 42% to 25% in 2024.
In Colorado, where home prices have risen between 35% and 45% over the past two years, voters in November can weigh in on a plan to reduce the statewide residential assessment rate over the next 10 years. The proposed measure would cut the average projected propertytax increase by 62% for the 2023 tax year, due for payment in April 2024. Another measure on the November ballot would amend the state constitution to cap property-tax increases at 3% per property.
In Hawaii, a combination of “assessed values, restructuring of the rates themselves, and the natural increase of property value” have caused rates to rise sharply, said Kalama Kim, president of Berkshire Hathaway HomeServices Hawai'i Realty. “There’s also now a higher rate for homes without a home exemption—those that are not primary homes.” Property taxes have increased by more than 80% over the past decade and reassessments mean that increases of up to 20% are occurring in some areas of the islands this year. However, “because the property taxes are so much lower than the rest of the U.S.— and especially at the luxury level—it doesn’t have too significant an effect,” he said.
Still, policy makers in Honolulu have proposed a variety of methods to help prevent sudden increases. These range from a truth-in-taxation statute that prevents property taxes from automatically increasing in line with home values, to a bill rescinding higher tax rates for higher valued homes, to a new classification system that would introduce a sliding rate of taxes based on four tiers of value, to a refund or tax relief.
Aspen, Colorado: Billionaire Buyers Double Down
The billionaire buyers have made their presence known in this luxe ski town, especially in Red Mountain, aka “Billionaire Mountain,” and will only continue to do so in the coming year.
“Jeff Bezos bought a couple of homes in the Aspen area and linked them together and there are a couple of other people who have done that as well,” said Brenda Wild, owner of Berkshire Hathaway HomeServices Signature Properties. “We’re seeing this more and more as potential buyers ask if we could take three properties in a certain area of Red Mountain and link them together for privacy’s sake.”
Legacy properties that can serve as family compounds are also a big draw for luxury home buyers, including several other notable names.
“The idea is that these will stay in the family for generations,” she said.
In the Aspen market, buyers can expect to find average sale prices in the $14 million range. In May, a mansion above the Residence at Little Nell sold for $65 million, making it the highest priced home sale this year.
Generally, buyers—many of which are from such feeder markets as Florida, California, Texas and the Chicago area— are either seeking newly constructed homes or they’re making changes to existing ones since only six demolition permits are allowed per year making teardowns a limited option.
“Exterior landscaping with ponds, spas and entertainment areas are a must,” Wild said. “Buyers here want to enjoy the inside/outside lifestyle,” so installing a folding wall of windows or doors that make the outdoors part of your living space is a must, she said.
Turning Purchases Into Rentals
We asked Berkshire Hathaway HomeServices network members whether people are choosing to rent out their properties rather than list them because of strong rental prices.
Are people choosing to rent out their properties rather than list them?
Buyers and Renters Still Sold On Caribbean Vacation Homes
Across the Caribbean, North Americans remain the predominant luxury buyer, for both condos and single-family homes.
On the island of Aruba, for one, “we have some from Europe and South America, but nothing compared to the U.S. and Canada,” said Rudolph Kok, broker and owner, Berkshire Hathaway HomeServices Aruba Realty.
In the past two or three years, there has been an explosion in demand for second homes that can be rented out, he said. “I would say that 30% to 35% of buyers now are looking to make money in the short-term rental market.”
Most Aruba renters stay for two or three weeks, Kok said, but there are no limitations on how long homes can be rented, and nonresidents can stay in the country for up to six months—both attractive features from rental property owners.
Buyers from the U.S. and Canada also hold sway in the Bahamas, according to Jim Bernard, president, broker and appraiser and Luxury Collection Specialist, Berkshire Hathaway HomeServices Bahamas Real Estate. “It’s very easy to get to the Bahamas from all major cities up and down the East Coast, as well as Toronto and Montreal. If it’s easy to get here, you’ll come more often.”
The years 2021 and 2022 were the hottest real estate markets ever seen in the Bahamas, he said. The sweet spot was $3 million to $6 million, “although anything that appealed to the expat market did well.”
Sales began to slow toward the end of 2022 and for the first quarter of this year because of low inventory, he said. Inventory has begun to come back, although it’s still slim in the $3 million to $6 million range, and he’s now seeing more of a normal market where buyers
won’t do things like forgo appraisals and inspections. They are still mostly paying cash.
Since March, “we’re trending back up, with more sales activity, particularly at the high end,” he said. “We’ve done three deals in the [beginning of summer] that were well north of $10 million.”
Interestingly, some of the many people who moved to the Bahamas during the pandemic are now looking to upgrade, Bernard said.
Prices have “held pretty steady” and vary widely depending on where you are on the islands, he said. In Nassau, the capital and main hub on the island of New Providence, “you’re looking at a minimum of $750,000, and probably around $1 million” for something with good ocean views.
For beachfront condos on New Providence, “you’re looking at about $1 million for three bedrooms on the beach,” Bernard said. Luxury residences in gated communities start at $3 million and for a beachfront single-family home, “it’s no less than $10 million.”
Some of the most popular communities are on the north shore of New Providence, including Lyford Cay, Paradise Island, Old Fort, Cable Beach and Love Beach.
The rental market for luxury homes has remained strong, he said, with very little inventory for longterm rentals. Certain communities allow shortterm rentals, so a lot of people are using their properties as second homes and then putting them up on Airbnb when they’re not there.
On the three Cayman Islands, the luxury market is seeing good inventory, strong prices and a “steady influx of high-net-worth individuals,” said Paula McCartney, broker and owner, Berkshire Hathaway HomeServices Cayman Islands.
“We have some multiple offers, but it’s not a dog-eat-dog scenario,” she added. “People have some room to negotiate.”
People want oceanfront, or canal-front, “anything with a good water view,” she said.
“People are attracted to the security of our government and the fact that buying properties here is a very safe investment,” she added.
In Hawaii, property taxes have increased by more than 80% over the past decade.
In Aruba over the past two or three years, there has been an explosion in demand for second homes with an estimated 30% to 35% of buyers looking to make a profit in the short-term rental market .
The popular Seven Mile Beach corridor on the western end of Grand Cayman is a “major driving force in the Cayman market” and home to most of the restaurants and shops, McCartney said. It’s mostly condos, with a “handful of single-family residences.” Home prices there usually start at $3 million.
On Aruba, the luxury market is concentrated on the west side of the island and many buyers, both for single-family homes and condos, want to be in or near the Tierra del Sol resort, the most well-known resort on the island with one of the Caribbean’s most famous golf courses, Kok said.
“We have always had a stable market here,” Kok said, with “an explosion in demand soon after Covid-19.”
Because so many properties have changed hands in the past couple of years, “we are getting slowly out of inventory, for the first time in more than 30 years that I’ve been in the real estate business here,” Kok said. And it’s putting pressure on prices.
The range between $800,000 and $1.5 million is the sweet spot in the luxury market, he said. The very top of the market is over $5 million. “We have some, but not so many.”
“You can buy property here without any limitations,” Kok said. “You can buy one or two properties or you can buy 10.”
Interstate Migration Made Easier
According to the latest luxury data from the Emerging Housing Markets Index from The Wall Street Journal and Realtor.com released in July 2023, affluent home buyers are driving demand for beach getaways and outdoorsy communities, which reigned as the hottest luxury markets in the U.S. in the second quarter of 2023 (with Boulder, Colorado; San Jose, Sunnyvale and Santa Clara, California; and St. Louis, Missouri, topping the list for luxury growth). And according to U.S. Census Bureau data, Florida, Texas, and the Carolinas saw the most domestic migration gains in 2022.
But moving between states can be a complex process, especially for luxury clients.
However, by considering the following five tips, all parties can keep peace of mind through the entire transaction and enjoy a smooth transition through to close.
1 Help clients consider their total picture before moving
“We are back into a market that is directed by lifestyle, environment and investment opportunities,” said Troy Reierson, CEO of Berkshire Hathaway HomeServices Arizona Properties, California Properties and Nevada Properties. He urged buyers and sellers to consider the “why” with an interstate move. “Is it political, financial or simply quality of life?” he said. Understanding all aspects of the desire
to move will help guide both parties not only in finding a new home, but also in deciding whether or not they want to sell a current property.
2 Assemble the right team
“If you have people on the ground who don’t know what they’re doing, you’re playing a risky game in out-of-state transactions,” said Andrew Delory, a luxury real estate attorney advising on transactions in the Boston, Massachusetts, area. This “team” begins with the right real estate professional, followed by a qualified real estate attorney and experienced certified public accountant (CPA). In some markets, like Texas, clients may want to consider hiring a “property tax consultant,” who could help them navigate specific tax issues, especially when buying from another state. Texas’ “residence homestead exemption,” for example, is particularly complicated. According to Dallasarea real estate attorney Charles E. Kramer, the code includes certain state constitutional rights and limitations around mortgage, taxes, pass-through ownership and more. (In November, Texans will vote on a constitutional amendment to double the exemption limit for those who own a primary residence in the state and place a temporary cap on appraisal values of certain properties valued at $5 million and under.) No states share the exact same set of state-specific laws, so it’s important to have advocates who are on the ground in the market and understand the nuances of home transactions there.
3 Tax and estate planning is more critical than ever when moving to—or buying in— a new state
“State to state, it’s so different, they need (to have the right advice) to structure appropriately,” said Marvin Jolly, regional senior vice president of sales, Berkshire Hathaway HomeServices PenFed Realty Texas. In just one example, Texas is one of nine “community property” states, which changes the scope of property ownership for a home acquired during marriage. Delory noted that additional implications occur if someone is buying a primary residence versus an investment property. In certain cases, he will structure deals to help clients reduce tax liability from things like capital gains or
work property into a broader estate plan. In all cases, the help from an established team of professionals to navigate all of this remains paramount.
4 Slowly, but surely, climate is influencing migration
“It’s something to watch,” Jolly said. He noted that while his state’s electrical grid failure in 2021 didn’t move the needle on migration as much as everyone thought it might, the increased installation of solar panels in new and existing homes is bringing up new issues for both in- and out-of-state transactions. “We’re seeing the transfer of those panels becoming an issue,” he said. In cases where solar panels have been leased and not purchased outright, who owns the resulting power—and potential savings from selling that power back to the grid—can be a point of contention. There are sure to be more unrealized issues ahead as more luxury buyers search for independence and resilience in their home purchases, especially in light of more frequent and extreme weather-related events.
5 Don’t leave everything to the builder or contractor
In the cases of new-home construction or a comprehensive remodel, it’s easy to leave most of the decisions and sign-off to the lead contractor. “It’s very dangerous to rely on the builder alone, and to assume they’ll do everything right,” Delory said. Although his practicing state of Massachusetts requires a limited warranty on certain home components, he advises to write into an agreement a more comprehensive warranty to cover things buyers may not see until after they’ve moved in.Troy CEO Berkshire Hathaway HomeServices Arizona Properties, California Properties and Nevada Properties
We are back into a market that is directed by lifestyle, environment and investment opportunities.”
This year's survey respondents signaled slightly more inventory. Last year, 51.61% of respondents said inventory was very low and 38.71% said it was low.
Above: In Park City, Utah, where private aviation options are treasured, this home on a fouracre lot offers majestic views.
Left: Advancements in the aviation industry have helped lessen hesitance around living near private airports.
The Hottest New Amenity Could be Proximity to a Private Airport
As the world has become more interconnected, proximity to airports—especially of the private variety—can help boost real estate values, according to experts.
Especially in light of the Covid-19 pandemic and all the challenges it brought, the convenience of flying private straight from (or close to) home has never been so highly prized.
“In today’s day and age, people are comfortable funding convenience, and this is no exception,” said Casey Bryan, president of Berkshire Hathaway HomeServices Florida Properties Group. “While we do not see this as a top contender on our affluent buyers’ wish list, there are conversations surrounding proximity and these conversations certainly have influence in buyer’s decisions.”
In a summer 2023 survey of Berkshire Hathaway HomeServices network members, 60% of respondents said a private airport nearby improves home value.
Whereas in the past, some buyers may have been hesitant to live too close to aviation facilities, due to noise pollution and health issues, advancements in the industry—such as new types of engines, acoustic liners, noise technologies and awareness regarding CO2 emissions and pollution—have lessened those concerns.
According to Steve Roney, CEO and owner of Berkshire Hathaway HomeServices Utah Properties, when it comes to luxury real estate near private airports, value is judged on a case-by-case basis and is dependent on the particular location, as certain markets are better served in terms of private airport options.
“Proximity to private air options is something we’re often asked about…the remoteness of your location is a real driver of whether you fly private or not,” Roney said. “The more remote you are, the higher the price of the home [with private airport access].”
Yellowstone Club and Big Sky in Montana are good examples, he said. “Very remote, and far more attractive to fly direct/ private rather than having to connect through Salt Lake City or elsewhere,” he said.
Bryan added that closer access to private planes is also likely a higher agenda item in areas prone to traffic delays and congestion.
“Proximity to an airport for somebody with the means to fly privately is certainly going
Atlanta: Buyers Step Back Into the Ring
With the National Association of REALTORS® naming Atlanta as one of the top U.S. housing markets to watch in 2023, even more activity is expected in this warm and welcoming capital city, said DeAnn Golden, president and CEO of Berkshire Hathaway HomeServices Georgia Properties.
“Although demand recently dipped due in part to higher interest rates, buyers seem to be stepping back into the ring as interest rates level off,” she said, adding that in 2022, Atlanta’s luxury market share saw a 395% increase in sales volume since 2015. “As home prices rose overall, so has the price of luxury homes.”
Thanks to its diverse cultural influences and architecture, Atlanta remains a hot market and luxury neighborhoods such as Buckhead, Druid Hills and Morningside/Lenox Park remain big draws for luxury buyers.
Those buyers are especially interested in homes that maximize indoor/outdoor living.
“We have seen a demand for extended outdoor living spaces,” she said. “This trend aligns with the biophilic design movement, which seeks to incorporate elements of nature to improve well-being and connection to the natural world.”
During the coming year, Golden predicted that the city will continue to draw new luxury home buyers.
“The influx of buyers, coupled with the exceptionally low inventory levels, has resulted in sustained high demand for luxury properties in most of Atlanta,” she said. “Given the current market conditions and the continued interest in Atlanta’s real estate, it’s reasonable to predict that home prices may experience a slight increase in 2024.”
to be a driver in their [real estate] decisions,” added Patrick Gallagher, president of sales, marketing and service at NetJets.
One snafu: Private-aviation infrastructure has not kept up with an increase in aviation traffic over the past few years, he said.
“While the FBOs [fixed-base operators] and executive terminals are growing in number, the number of airports is not improving, and the ability for airports to handle volume is not improving, so that’s been a challenge for the industry,” Gallagher said. Another point for the private hangar, perhaps.
“Places that used to be very seasonal have grown to become year-round, and some places that are remote with lesser traffic have grown, increasing volume,” Gallagher said. “Places like Scottsdale or Naples have become some of our busiest airports yearround.” NetJets is building a new FBO and hangar in Scottsdale, and has projects under way in Bozeman and Vail/Eagle as a result.
“We’re trying to keep up with demand by building facilities at existing airports,” Gallagher said.
A major point to consider, according to Gallagher, is how there are more than 5,000 airports in the U.S., of which only around 500 have commercial service.
“You can access 10 times the number of airports if you have the ability to fly privately,” said Gallagher. “Take Marco Island, which has a general aviation airport that puts you 10 minutes from virtually any home on the island. And Naples has its own private airport. If you’re flying commercial, you’ll be flying into Fort Myers and driving around an hour to get to either. That’s a huge difference maker for someone looking at property there,” he said.
Anecdotally, Gallagher said he has spoken with many clients who have been in the process of relocating their families or businesses, and that proximity to an airport is frequently mentioned as an important consideration. “I can think of several instances when someone has said to me, ‘I’m moving here and am really excited about it because the private airport is within 10 minutes of my house.’”
Despite Some Scaling Back, ‘Biohacking’ And Other Wellness Amenities Rise to the Top
When work-from-home was de rigueur and people were spending more of their free time at home, over-the-top amenities and homesas-resorts became standard among affluent homeowners across the globe. While some of that spending has slowed down across some areas of the world, high-end wellness amenities have risen to the top, as wealthy homeowners invest in homes that make them feel—and look—better.
“Biohacking,” a wellness lifestyle dedicated to improving health, fitness, longevity and well-being using personalized data, is being applied to high-end homes around the globe. That often means the addition of infrared saunas, ice baths, yoga rooms, meditation spaces and air purifiers, as well as more niche items, such as ozone generators and
light therapy beds. And with the increasing possibilities of artificial intelligence, it’s not unlikely that these items will become more digitized and personally customized moving forward, according to Delos, a global wellness leader focused on enhancing health and wellbeing in the indoor spaces, and creators of the WELL Building Standard.
In the sunny climes of Hawaii, increasing numbers of luxury houses feature yoga rooms and saunas and ice baths (which are said to boost circulation and reduce inflammation), according to Kalama Kim, president of Berkshire Hathaway HomeServices Hawai’i Realty. People are getting more creative with traditional outdoor spaces such as open-air showers and baths. “Before it was just a little shed area with a shower, now it is much more expansive,” he said.
In the tony areas of Toronto, “celebrity builders”—like Ferris Rafauli who built Drake’s lavish manor-style home in Oakville with an NBA regulation-size basketball court—get particularly creative when it comes to wellness amenities. Extras include massage rooms with spa facilities and double pools—for both indoor and outdoor use, according to Duncan Harvey, a branch partner and broker at Berkshire Hathaway HomeServices West Realty in Toronto.
Many high-end homes in Toronto feature “really nice” well-equipped gyms with large television screens, installed during the pandemic so that people could stream their personal trainer’s fitness sessions, Harvey said, adding, “they have created nicer gyms than the ones they go to and paid a premium for it.”
Since much of health is tied to spending time outdoors, wealthy Torontonians are investing in well-designed outdoor spaces, Harvey said. More of these high-end homes feature the addition of three-season rooms that are both indoor and outdoor. Traditionally seen in warmer climates, they’re becoming increasingly popular to take advantage of the mood-increasing effects of natural light.
Massage rooms in particular are popular among homeowners and buyers in the vacation market of Cape Cod, said Emily Clark, president of Berkshire Hathaway HomeServices Robert Paul Properties in Cape Cod and Boston. But expansive garden spaces, private beaches and pools are still highly requested, she said.
In Boston, which is more of a primary-home market, sophisticated concierge services in luxury apartment buildings include luxury wellness perks and events for residents, according to Clark. Hotel-branded residences in particular have expanded, and many of them focus on their wellnessminded amenities. In the affluent area of Back Bay, for example, One Dalton, a Four Seasons hotel and residences, hosts a vast wellness floor featuring a 65-foot heated indoor pool and a fitness center designed by celebrity trainer Harley Pasternak with a private yoga and pilates studio and a spa.
More Controlled Spending
During the pandemic, high-end amenities became so luxurious that some were reporting altitude regulation devices being installed so people could fly to their destination homes for the weekend and not have to factor in time to adjust. But that “money is no object” attitude to spending has halted in some areas as people spend less time at home and economic uncertainty has taken hold.
Some are less inclined to spend on “extras” for their houses and apartments for fear that improvements won’t have the same returns on investment, according to agents.
In Canada in particular, higher taxes on luxury goods have had an impact, Harvey said. In September 2022, Canada introduced a new tax on luxury items, known as the Canadian Select Luxury Items Tax Act. Though it is applicable to single items priced above $100,000, typically vehicles, timepieces and boats—and not the sale of products like kitchens—it has had a slowing effect on people’s spending, he said.
But the level of spending can also depend on the type of home, Clark said. In Cape Cod, that money-is-no-object spending on homes has not stopped, she said, as people look for all-in-one resortstyle homes. In Boston and other urban areas, that trend is waning, as people are taking advantage of the wealth of amenities on their doorstep.
Quiet Luxury Hits Home
Home dwellers are embracing the quiet luxury trend with soft palettes and carefully curated textures. The old-money, quality-focused look is bringing today’s consumer a welcome sense of calm.
With searches for “quiet luxury” and “stealth wealth” skyrocketing year over year, the new trend is serving simple elegance, and consumers are now bringing the sense of stability and comfort to their living spaces.
The toned-down style is coming off the chaos of the past few years while building on the hyperorganizing trend of the past 15 years, said Cathy Purple Cherry, founding principal of architecture and interiors firm Purple Cherry Architects. “It’s coming on the heels of Covid19, living at home, living among chaos, and now that people are working from home more they are trying to create more order,” she said. “The palette is very cohesive, nondisruptive… so it’s almost like having a blank slate.”
And the gentle, elevated look can bring a psychological boost, said Thomaï Serdari, Ph.D., founder and chief ideator at brand strategy firm BRAND(x)LUX and clinical associate professor of marketing at New York University. “When you are in a room that has been well-designed, the experience you have in that environment satisfies you so completely that you don’t need the extra stimulation of another 50 pillows,” she said.
The pandemic-inspired inner-reflection wave has fueled a reaction against the loud styles that pop on social media, said Serdari, and people are excited to examine pieces in real life before buying. “We crave to be back in brick-and-mortar stores, touching fabrics and pieces of furniture,” she said. “We’re moving away from that superficial, twodimensional approach to aesthetics that social media trained us to pursue in our life.”
Of course, many folks were already living this way, noted Cherry. Case in point, Mexico’s
popular tourist spot San Miguel de Allende has always been a quiet luxury market, said Gregory Gunter, broker and owner of Berkshire Hathaway HomeServices Colonial Homes San Miguel, who explains that buyers there like understated over flash. “Here, a bespoke kitchen does not mean an Officine Gullo system, Sub-Zero fridge or a La Cornue range,” he said. “It means custom-crafted cabinetry and hand-forged hardware from a fifth-generation craftsman.”
Attention to detail is crucial when it comes to quiet luxury. “The window shape, style and color tones are noncontrasting or natural, woods,” Cherry said. For example, pale stains, white oak floors that match the window sashes and wisely chosen textures. “You’re not looking for plain,” she said. “You can take a simple monochromatic room and bring in trim elements on the walls and the ceiling, layering different treatments and textures to create depth and shadow lines to help bring the richness.”
The movement offers a chance to understand each building or furniture material, or qualities of stone, Serdari said. “You can find opulence if you pay attention to the real nature of materials, and the potential in terms of texture, layering—you get very rich and interesting results,” she said.
While the trend may simmer as trends do, some elements could easily last. “When you do quiet luxury really beautifully with a lot of texture and millwork application, I think that will stick, because it’s about much more than color, it’s about the content within those walls,” said Cherry. “But do I think the trend of all neutrals will stay? No.”
But quality and timeless products never go out of fashion, Serdari noted, “because the nature of the material doesn’t change, and the timelessness is what we’re paying that extra premium for, in addition to the quality that preserves the material for years to come.”
The palette is very cohesive, nondisruptive… so it’s almost like having a blank slate.”
Cathy Purple Cherry Founding Principal Architectureand Interiors Firm
Sustainability in Design: What’s Now, What’s Next
In the not-so-distant past, living sustainably simply meant separating recyclables. But today more high-end buyers and homeowners are looking to strongly infuse a sustainable state of being into everyday living, which means paying attention to the life cycle of the products they buy and the efficiency and health aspects of operating their homes.
“As the effects of global warming become more and more evident, consumers are looking for ways to be part of a solution,” said Stephen Pallrand, co-founder of CarbonShack Design in Los Angeles, California. There’s increased consumer awareness and demand for sustainably focused products—and therefore the
marketplace is evolving to meet that demand. “Home goods producers are stepping up,” he said.
Homeowners are also seeking out more energy-efficient solutions and better options for weather-resilient homes, said Dijana Savic-Jambert of Maredi Design based in Chicago, Illinois, and the Loire Valley, France. “People are more concerned about their own health and wellness and understand that the materials they are using in their interiors can positively or negatively impact this,” she said.
In fact, sustainability in home design is no longer a trend but a necessary shift toward a better future, said architect and designer Dara Huang, founding principal at Design Haus Liberty in London.
Below: Set in Sitges, Spain, Cala Blanca is a high-end residential project that reimagines the concept of luxury PassivHaus houses, creating houses that appeal to a healthy lifestyle and don’ t negatively impact the environment.
Materials Made Simple
Sustainable materials—for furniture fabrication, flooring, countertops and construction—continue to evolve. For instance, Pallrand has recently been working with a local company called ByFusion that takes plastic trash and converts it into construction-grade structural building blocks. “The resulting material is not only suitable structurally but is also quite beautiful—it has a Jackson Pollock modern art vibe.”
Hemp is also gaining popularity as a commercial fiber because it uses relatively little water in its production and processing, Pallrand said. Pallrand’s company CarbonShack produces hemp fabrics for the home in a variety of weights, textures and prints, “underscoring the versatility and beauty of this natural resource.”
Overall, there is a greater demand for more transparency from manufacturers and fabricators in order to eliminate toxic chemicals and phase out the unnecessary use of additives, Savic-Jambert said. For example, instead of implementing materials such as PVC or vinyl, which are often used in flooring, people are opting for hardwood or engineered wood floors that are certified by the Forest Stewardship Council, or porcelain and ceramic tiles.
In the building materials sector, utilizing eco-drywall, locally sourced stone slabs, lime and finishes that are free of volatile organic compounds (VOCs) are simple modifications that are being used to make buildings and residential properties sustainable, said Summer Jensen, CEO and principal of Hawk & Co design in Laguna Beach, California. And many companies are offering at least one collection of VOC-free paint, while lime-and mineral-based paints are fairly widely available.
For surfaces including flooring and countertops, there are several brands of quartz that carry a healthy materials certification, as well as some terrazzo brands that are certified as red-list free, meaning they don’t contain chemicals that have been designated as harmful to living creatures, including humans or the environment, Savic-Jambert said.
Classic or ancient materials, which are typically composed of organic elements, such as plaster, terrazzo and ceramics, are seeing a resurgence in popularity, Savic-Jambert said. “The most eco-friendly building materials are the ones that have been with us the longest: wood, natural plasters without paint, lime wash paints and clay paints,” Pallrand said.
Another way to look at being eco-friendly is to buy local and reduce the carbon cost of transporting the material to market.
Designers and architects are borrowing concepts from the past to make present spaces more sustainable. “Looking at how we designed homes before the advent of mechanical heating and air conditioning, and even the invention of lights, is an elegant way to live more sustainably,” Pallrand said. This means orienting the house toward natural light, using heavy eaves to resist the summer sun and allow the warming winter sun, implementing thick walls to increase insulation, utilizing cross-ventilation, or installing skylights or windows at high points to act as natural heat chimneys to vent out the heat.
Designing properly enclosed mudrooms or entrances and exits to the home in order to contain and limit the toxins brought in from the outside is becoming more standard to avoid compromising the air quality and further exasperating exposure to dangerous chemicals and pollutants, Savic-Jambert said.
Thanks to the U.S.’s Inflation Reduction Act, which offers significant tax credits for solar panels, batteries, heat pumps, EVs and more, consumers have more incentive than ever for adding technologies and systems to their homes for increased climate control, sustainable functionality and efficiencies, Pallrand said.
Energy-efficient appliances as well as smart technology that helps optimize energy use—such as induction cooktops and smarttech washing machines—are becoming the norm. Heat pumps, which are two-way HVAC systems that take heat from the outside air into the home in winter and push hot indoor air out in the summer, are also gaining momentum because they use about half as much energy and emit less carbon than other electric systems.
There is a growing emphasis on maximizing natural light and ventilation to
reduce energy consumption, Huang said. “Open-floor plans and flexible layouts are gaining popularity, promoting a sense of connectivity and adaptability,” she added. Huang also noted a surge in the integration of green spaces within the home, such as indoor gardens and living walls, which improve air quality and reconnect us with nature.
In countries like Mexico, solar electricity has become much more cost-effective, said Gregory Gunter, broker and owner of Berkshire Hathaway HomeServices Colonial Homes San Miguel in San Miguel de Allende, Mexico, who’s also an architect. “[Solar paneling is] always purchased outright here (unlike in the U.S. where it’s typically leased or financed), so it does not carry the negative stigma when selling a home that it often does in the U.S.,” he says.
“Electrical rates in Mexico are prorated on usage, the more you use, the higher the cost bracket per kilowatt-hour, so there is a lot of incentive to use solar in Mexico. We’re seeing much more solar-panel installations at all price levels but especially at the luxury level,” Gunter said.
The next generation of technology is incorporating artificial intelligence to adapt the home environment not only to homeowners’ needs and preferences but to maximize efficiency and reduce energy usage and waste, Pallrand said. These include smart thermostats, which recognize your preferred temperature settings and adjust automatically to increase comfort and save energy, as well as security technology that offers facial recognition and other features.
The popularity of human-centric lighting (HCL) in the home has become more widespread. “It’s the idea that lighting design needs to take into account the impact of light on human biology and behavior,” Savic-Jambert said. These systems of lighting essentially mimic natural cycles of light changing color temperature and intensity throughout the day. “Cooler white in the morning helps to wake the senses up and give you more energy while the warmer whites and ambers of sunset help to prepare your body for sleep,” Jensen said.
As the effects of global warming become more and more evident, consumers are looking for ways to be part of a solution.”
CarbonShack Design Los Angeles, California
St. Louis, Missouri
For luxury home buyers in St. Louis, multiple all-cash offers remain the norm. “Buyers in this market don’t need to worry about financing,” said Maryann Vitale Alles, president and CEO of Berkshire Hathaway HomeServices Select Properties in St. Louis. “If a house is priced right and, if it looks great, the owners can expect to be paid in cash.”
For high-end real estate, the Ladue and Town and Country areas are “hot,” she said, adding that buyers can expect to get more home compared with other parts of the country. “In St. Louis, you’re getting a house that’s close to at least 5,000 square feet.”
New homes here range from $1.5 million to $2 million on average, provided the home offers such amenities as pools, outdoor kitchens and firepits.
“The backyard scene is huge,” Alles said. “Also, finished lower levels are key. Prospective buyers absolutely want a bar and pool table down there.”
Buying an old home and tearing it down continues to trend, too, especially in older established suburbs such as Clayton and Kirkwood.
“In the case of Clayton, they appeal to people in sports,” she said. “That’s where local people move to and stay.”
One place where prices are expected to keep rising is in St. Charles, located 45 minutes from downtown. “Now that we’re seeing prices in the over a million-dollar range, we can now call St. Charles a luxury market,” she said. “This has been happening ever since the end of the pandemic.”
Over the coming year, Alles predicted that the market will stay solid, regardless of interest-rate fluctuations.
“I’m optimistic,” she said. “We’ll do well.”
Coastal South Carolina
Prices have remained steady along the South Carolina coast from Savannah to Charleston, but it’s Sea Pines, Hilton Head Island’s first resort in the southern part of the island, that’s remained on buyers’ radar, thanks in part to the five miles of pristine beaches and Atlantic Ocean views there.
Buyers are attracted to the many leisure trails, three golf courses, two marinas, horse stables and two beach clubs here, said Nancy Presley, a broker at Berkshire Hathaway HomeServices Hilton Head Bluffton Realty.
According to the high-end cut of the latest Emerging Housing Markets Index from The Wall Street Journal and Realtor.com, Hilton Head Island, Bluffton and Beaufort, South Carolina, ranked fifth among the top emerging markets in the luxury sector during the second quarter of 2023 (the area was at No. 2 during the first quarter).
Buyers are moving to the area from New York, Chicago, Cincinnati and even Georgia, Presley said. They tend to prefer open-floor plans to gather with extended family and expansive outdoor spaces to enjoy the marshes and ocean beyond.
“We’re also noticing more young families moving here,” she said. “This is a great place to raise children.”
And, while there was a record-breaking sale this year—an oceanfront home built in 2010 sold for $10.750 million—inventory remains tight in this community.
“We’ve got plenty of homes that are worth a lot more than that here, but they’re not for sale,” Presley said.
Hilton Head Island, which used to be more of a seasonal resort, is now a year-round destination and, for that reason, Presley predicts that the market in 2024 will remain strong.
“I’m expecting our cycle to be a mild one,” she said. “We may get a bit more inventory in the less expensive areas, but the oceanfront and higher-end properties will continue to be hard to get and prices will continue to go up.”
Strong demand, popular lifestyle amenities and relatively affordable pricing at the higher end are giving various locales a serious boost. These are some of the ones to watch.Above: This house in Fort Mill, South Carolina, has a saltwater pool, hot tub and cabana with a full kitchen and entertaining area.
The Phoenix market continues to be hot. In fact, this year’s record-breaking temperatures haven’t stopped buyers from putting down cash offers for luxury homes, bypassing interest-rate increases.
Take, for instance, the recent record-breaking $23.5 million sale of an 18,500-square-foot estate set on five acres in Paradise Valley.
“The buyer came in with a budget of $4 million,” said Troy Reierson, CEO at Berkshire Hathaway HomeServices Arizona Properties, California Properties and Nevada Properties. “He ended up with this house—a substantial upgrade—because it had the exact ‘feel’ of what he was looking for.”
The buyer profile has changed slightly in this market, however. In fact, this is the first summer since Covid-19 that summer sales have slowed ever so slightly, though traffic at open houses and multiple offers being written immediately remain common.
“It’s notable that during Covid we lost our seasons, there was no break and our sales execs were working hard doing deals 365 days of the year,” he said. “This summer there wasn’t as much activity, but this isn’t concerning.”
For the coming year, Reierson predicts a continued influx of buyers from California (Los Angeles specifically) and Seattle.
“Paradise Valley is always a hot area and the Arcadia neighborhood in Phoenix is one of the sexiest out there—it’s a little utopia,” he said. He also expects buyers to push beyond the city limits and seek properties in the northern reaches of nearby Scottsdale (in Troon specifically) and Cave Creek, located 45 minutes from Phoenix.
“We’re seeing larger homes and incredible masterplanned communities up there,” he said. “I see no signs of any of this stopping anytime soon.”
Athens and Greece
Despite high interest rates and a somewhat unsettled real estate market, the demand from foreign buyers for luxury properties in Greece has remained high, especially in the summer months—for both Athens and the islands.
“Greece has been a pole of attraction for prospective buyers,” said Kyriakos Xydis, managing partner of Berkshire Hathaway HomeServices Athens Properties, with “consistently high demand, mainly from abroad.” The demand, he said, is for both newly built homes and established luxury.
The areas that attract the most interest are the center of Athens and its southern suburbs, “while the islands and the northern suburbs of Attica have larger stocks of luxury homes,” he said.
Interestingly, the top 10 countries investing in Greece in the past decade include non-European Union countries, including Switzerland, China and Hong Kong, the U.S. and Canada, with these countries “significantly increasing their investment presence” in recent years, Xydis said.
Beyond the islands, Porto Heli and the Athenian Riviera are in high demand, along with the “wider Athens area, where one can find luxury, combined with the ease of access and movement from area to area,” Xydis said. Despite the high demand, prices remain at lower levels than comparable markets abroad.
The Greek real estate market presents two important advantages, compared with other European countries, he said. The first is related to pricing, with relatively lower costs compared with Spain, southern France, Italy and Portugal. The second is lifestyle-related, because of Greece’s rich cultural wealth, natural beauty and geographic location, he said. Xydis sees an ongoing demand for new luxury housing developments in Greece, with the southern suburbs of Athens, the Peloponnese, Halkidiki and Crete being ideal areas for such new residential complexes.
During the summer of 2023, his agency expanded its reach in the rental market of “very selected luxury homes,” regardless of size, from small apartments to large villas, in areas such as the “wider center of Athens and Mykonos, and we are in discussions for some more selected tourist destinations.”