Still Not Your Traditional Buyer's Market

While key indicators such as slowing demand and more inventory signal the start of a buyer’s market trend, the current state of the luxury real estate market is more contradictory.

Inventory is still not keeping up with demand. Most markets are reporting supply is below their 10-year averages³ seen before the start of pandemic. Unexpectedly, July and August 2022 saw a significant decline in the number of new luxury property listings entering the market. The level of new luxury listings was down 20% compared to May and June 2022 and only up 7% compared July and August 2021.

This decline could be a result of the affluent taking the summer to travel again, or it could signal seller hesitancy about listing their home amid less favorable conditions. Some sellers may also just not be ready to move again, especially if they were among the group of early YOLO (“You Only Live Once”) buyers who purchased their dream home during the pandemic. Per our survey, over 72% of respondents stated that they were satisfied with their home purchase in 2020 and 2021.

Equally atypical of a buyer’s market is price stabilization. Luxury property prices, while at record highs, have held and are even predicted to rise over the next five years4 (with the exception of some overinflated markets). Furthermore, these influencing factors vary considerably across the country,5 by location as well as by property type.

This creates a unique set of market conditions for buyers to navigate; they may have increasingly more negotiating leverage, but equally they will still need to contend with tight inventory conditions and high prices.