Market OUTLOOK

Vision Survey

The Vision Survey gathers on-the-ground information from Coldwell Banker Global Luxury® Property Specialists who represent the top 10% of properties in their local markets.

This year, The Report surveyed over 600 Luxury Property Specialists around the world to understand where current and future purchasing trends were headed as the luxury housing market begins to rebalance after the COVID-19 homebuying boom.

Their message was clear: the market is normalizing and it’s more important than ever for real estate professionals to go the extra mile when it comes to serving the needs of HNW clientele.

Luxury Property Specialists say they are already getting creative. Their top picks for networking strategies are curating their own “favorite things” direct mail campaigns, hosting a private event for their VIP clients, and using trending social platforms like TikTok. For showings, some agents will be looking to pull out all the stops to make their clients feel special this year – whether it’s tapping into the most sought-out designers and decorators to stage a home or creating a special experience for a potential buyer. Most (about 54%) say they plan to stay connected with their clients via regular check-in calls or texts.

KEY INSIGHTS FROM THE SURVEY REVEALED:

• Agent sentiment remains upbeat in spite of challenges

• Scales tilt in buyers’ favor, but sellers still hold the advantage

• Demand from out-of-state buyers expected to be strongest

• High-end home prices expected to remain relatively stable annually

• Primary home purchases, not secondary homes, will lead the market

• Location is driving decisions, but move-in ready homes are a priority

• “Have-it-all” properties with the perfect location, home condition, and amenities hit peak demand

Top Challenges

Higher interest rates and a looming recession continue to inject caution into the high-end residential market. An overwhelming majority (63%) of Luxury Property Specialists said that these were the two most common reasons for their clients pausing their buying or selling plans.

HNW clients also appear to be sensitive to stock market declines as Wall Street ended 2022 with its largest annual percentage drop since 2008.3 High home prices and inflation were less of a concern.

Primary Concerns For Buyers And Sellers In 2023

6.5%

13.2%

17.5%

35.0% 27.8%

Rising interest rates

Looming recession

Stock market declines

High home prices

Inflation

OUTDATED SELLER EXPECTATIONS, BUYERS SITTING ON SIDELINES, AND LOW INVENTORY

Happening concurrently with consumer caution, regional differences and inconsistent market conditions have made it difficult for some buyers and sellers to adjust to their new reality. The majority of Luxury Property Specialists indicated that their greatest 2023 challenge is sellers having outdated expectations based on market conditions that were present during the pandemic homebuying boom.

Meanwhile, most Luxury Property Specialists said that their greatest challenge on the purchasing side is buyers waiting for significant price declines. While inventory levels may be improving in some markets, many of the hottest markets are still plagued by low inventory – presenting challenges for both sellers and buyers.

Too many buyers are chasing too little desirable inventory, whereas sellers fear they won’t be able to find a replacement property should they list their home, which only contributes further to low supply.

BUYER CHALLENGES IN 2023

SELLER CHALLENGES IN 2023

Buyers waiting for significant price declines

Lack of new inventory

Properties not meeting search criteria (price, size, location, condition, etc.)

Sellers won’t negotiate

Outdated expectations based on 2020-2021 market conditions

Seller fears of not being able to find a replacement home if they sell

Sellers don’t need to sell

Seller hesitancy for financial reasons

Consistent Demand And Price Stability Inspire Optimism

Despite these challenges, Luxury Property Specialists remain generally upbeat about the high-end residential property market. Most said that they expect demand to stay the same from 2023 to 2024. More than half also said that they expect 2023 luxury home prices to remain flat or up slightly from 2022.

Expected Demand For Luxury Properties In 2024

Buyers Gain Ground

After two years of bidding wars, low housing supply, and soaring prices, many Luxury Property Specialists surveyed said market conditions for buyers would be slightly better in 2023. More than a third rated market conditions for buyers as fair and 32% rated them as good. Still, another 30% of them said that conditions would still be challenging for buyers – a sign that not all markets are equal.

SELLERS STILL IN DRIVER’S SEAT

Buyers may be regaining some negotiating power, but sellers still have the upper hand in many housing markets. Over 75% of Luxury Property Specialists said that market conditions would be either fair or good for sellers in 2023.

32.0% 37.1% 30.9%

THE TRIFECTA: LOCATION, HOME CONDITION, AND AMENITIES

Did the real estate golden rule, “location, location, location,” get disrupted after COVID-19 made it possible for more people to live and work from anywhere? According to Luxury Property Specialists, the answer is…no, but it’s complicated.

More than half said that property location is still the most important factor driving their clients’ decision-making process for both primary and secondary homes. However, one in four said home condition and amenities are the most important.

This trend appeared again when asked what types of luxury properties are highest in demand. Half of the respondents said properties based on location were the most desirable, followed by nearly a quarter that claimed move-in-ready homes were most sought-after.

Several respondents indicated that hybrid properties that offer a combination of location, home condition, price, size, amenities, or views were also highly sought-after in their markets. A “haveit-all” mentality could become a larger influence in the high-end residential market this year as buyers flex their leverage and become more selective, refusing to settle for anything less than the perfect property that checks all of their boxes.

Primary Home Decision Priorities

Luxury Property Types In Demand