Welcome to THE REPORT 2023

Luxury Market Insights

There are more than a few words that could sum up our current luxury residential landscape: resiliency, adaptability, contradiction, transition, adjustment, resetting. Declarations of 2023 as a year of correction by some in the media may prove to be the most apt description of where the real estate market sits presently. But only time will tell if this title holds against the tides of reality. Expectations have shifted more recently, with all eyes on the spring to post a strong showing for luxury real estate after a momentary pause in 2022.

Paradoxes abound in this market. Conditions are improving for buyers this year, but it’s not a buyer’s market yet –at least not everywhere. Median prices for luxury single-family homes are up in some places, like Seattle, and trending down in others, like in Phoenix. Inventory is up overall, but new inventory continues to lag. Even on the wealth side, the metrics don’t paint a consistent picture. These contradictions have sowed confusion and allowed housing market misconceptions to take root, which is something The Report 2023 seeks to dispel

This year’s report gathered intelligence from The Institute of Luxury Home Marketing, Wealth-X, Credit Suisse, the National Association of Realtors, a Censuswide/Coldwell Banker Global Luxury Survey, and others. Over 600 Coldwell Banker Global Luxury Property Specialists were surveyed for their outlook on the unique buying, selling, and market trends of high-end real estate.

I hope you will find this information invaluable

6

in Review 2022

56 New Narratives for 2023

78 Global Luxury Outlook 2023

Luxury Outlook 2023

108 Methodology and Resources

1. A HOUSING MARKET CORRECTION APPEARS TO BE UNDERWAY

After three years and 40% price increases in the luxury home sector, uncertainty took root after the Federal Reserve started hiking interest rates in March 2022 to curb inflation. The market appears to now be normalizing to traditional levels.

2. SEASONALITY CAME BACK IN 2022, BUT WITH A TWIST

Inventory, sales, and prices all rose in the second quarter, only to stall in the third and fourth quarters, as the market reacted to outside influences. Expectations are that the spring market will return in 2023.

3. BEHAVIORAL GAPS BETWEEN WEALTH DEMOGRAPHICS WIDEN

High-Net-Worth (HNW) individuals are expected to shift focus to conscious spending and future-proofing, while Ultra-High-Net-Worth (UHNW) individuals will continue to live for the moment and prioritize personal enjoyment.

4. AGENT OUTLOOK REMAINS UPBEAT

Over half of Luxury Property Specialists surveyed said that they expect 2023 luxury home prices to remain flat or up slightly from 2022. Over half said they expect demand to remain consistent throughout 2023, while nearly 30% said they thought demand could be stronger by the end of the year.

5. WHAT DEFINES A DREAM HOME IN 2023

Most Luxury Property Specialists said that indoor-outdoor living spaces, a chef’s kitchen with up-to-date appliances, and a home with a breathtaking view are their clients’ top must-have home amenities. Meanwhile, 40% said that their clients define a dream home by its views and 36% said quality of construction or materials.

6. SECONDARY HOMES BECOME MAINSTAYS

The percentage of U.S.-based individuals with a net worth of $5 million+ who own two or more properties increased from 70% in 2021 to 79% in 2022, per Wealth-X. Among those, over 16% of their wealth is allocated toward real estate and other luxury assets.

7. TOP SPRING BUYING AND SELLING OPPORTUNITIES

An analysis of 125 U.S. metropolitan areas revealed the top 10 opportunity markets for buyers and sellers this spring. St. Louis led the list for sellers, while Marco Island, Florida, has grown friendlier to buyers.

8. THE TOP 20% CONTINUE TO LEAD LUXURY

An analysis of 10 prime U.S. markets from New York to Los Angeles showed that the wealthiest spenders carry an outsized influence in the high-end residential sector.

9. WEALTH CENTERS SHIFT AROUND WORLDWIDE

New York is still the No. 1 city globally for HNW primary residents and secondary-home owners, but Singapore jumped into the top 10 in 2022, taking the No. 4 and No. 7 positions, respectively. Now that China has lifted its COVID-19 travel restrictions, experts also predict increased movement from this part of the world.

10. SECONDARY-HOME OWNERSHIP MAKES A GLOBAL COMEBACK

Borders have opened up, and with it has come increased global travel and a growing affinity for property ownership in foreign countries among HNW individuals. Their reasons for looking beyond their home country range from economic to political and financial, but their penchant for exclusivity and adventure plays a key role.