A Buyer’s PERSPECTIVE

This spring, luxury buyers are expected to return to the market, but they will be doing so with greater selectivity as they look for homes that meet their specific criteria. They may see improving buying conditions – such as a better selection of available homes and more negotiating opportunities with sellers – but will they be able to get the home they want for the price they want?

The locations that currently offer the best buyer opportunities are those that have a larger quantity of properties to choose from (or where supply exceeds demand) combined with a flexible pricing environment. It’s not just about housing choice or negotiating power, however. Many of today’s affluent buyers are still willing to pay full asking price if the home checks all of their boxes – especially in higher price brackets where buyers tend to have more specialized tastes and needs.

To determine which markets rank highest in opportunities for buyers, we measured the SP/LP% of sold homes and buyer demand against the increase of available inventory in the last four months of 2022. The markets that showed the most promise for buyers have an SP/LP% that has fallen between 5% and 10% with rising inventory levels closest to 100%.

Florida

Florida was a true pandemic paradise, thanks to its seemingly endless supply of sunshine, outdoor recreation, and no state income tax. The tides have started to turn for buyers in the Sunshine State this year. But remember, these statistics need to be put in perspective. While inventory is improving in some locations, it is still tight historically; conditions are more indicative of the “traditional” housing market years of 2018 and 2019.

Three of the top five opportunity markets for buyers are in Florida: Marco Island, the Palm Beach area, and Miami. Marco Island earned the No. 1 position since it has a 5% sales ratio (where supply is higher than demand) and the

SP/LP% hovers around 7% below asking price. Buyers in this Gulf-side oasis have more high-end properties to choose from, thanks to a 58.89% increase in inventory, which also allows them to negotiate on price.

Mountain Resorts

Soaring demand depleted housing inventory and drove up prices in many mountain resort towns, making these destinations anything but hospitable to buyers by the end of 2021. Fast-forward to this spring, and buyers may find some breathing room in two alpine hotspots.

Colorado’s Summit County, home to the Breckenridge ski area, ranked No. 3 on the Index. Inventory levels have improved. Meanwhile, the 6% sales ratio and 94% SP/LP% have let buyers regain some negotiating ground. Buyers shouldn’t get too excited, however: prices have only come down slightly from record highs. The average home price in the county in 2022 was more than $1.3 million – the highest on record since at least 1980, according to Land Title data.5 Another peak pandemic darling, Nevada’s Lake Tahoe took the fifth spot.