A shift in focus for luxury buyers towards future prospects of the destination as well as resale value potential of the home reflect a growing awareness of the risks of an overpriced market.
National housing trends and economic indicators
Just this week, Fortune magazine reported on the nation’s 10 most overvalued housing markets and the deceleration of home price growth. The Federal Reserve also announced inflation is our #1 enemy and Bloomberg economists predict rising interest rates in 2022.
“One of the two big threats to getting back to maximum employment is actually high inflation,” Powell said during a press briefing, adding that the pandemic was the other.Federal Reserve Chair Jerome Powell
While national trends are concerning and factor into local market dynamics, in the greater Philadelphia area November results show an uptick in pricing trends after Q3 softening. Another example of how national news trends are of interest, but not the whole story regarding local dynamics.
North America Luxury Report
Highlighted below are trends and indicators from analysis of luxury markets in 116 major metropolitan areas throughout the US and Canada. PA is not included but it gives great insights into national trends that affect our local markets:
Buyer Demand for Co-Primary Residences
While quality, move-in condition and amenities remain important to luxury home buyers, savvy buyers across the country are analyzing both the future prospects of the destination as well as the resale value of the home.
What does that mean if you are a seller? Telling the story of your home, not only as a luxury experience but the value of the location is critical for maximum results.
The “Great Reshuffling of America” continues, reflected most in the luxury market segment.
Homes within a 10-minute commute of a metro’s downtown job center are among the most expensive in 18 of the 35 metros included in the analysis, yet these areas had the fastest-growing home values in nine of those metros as of 2017. Now homes closest to downtown are growing fastest in only three of those 18 metros, and they are growing slowest or even falling in 11.The Great Reshuffling Is Changing How Far Americans Are Willing to Commute
In metros where home values in the urban core have typically been lower than in the suburbs — places such as Cleveland, Detroit, Baltimore and Indianapolis — home values are trending up near downtown. A home within a 10-minute commute of downtown Detroit is now $101,228 more expensive than it was in 2019, and the price of living within a 10-minute commute of downtown Indianapolis has grown $54,025 over the same period.
While these two forces seem to be in opposition, they are really two sides of the same coin: Americans are seeking larger, more affordable homes as flexible work opportunities bring new expectations for what they want and need in a home. As people seek affordability, they are willing to live with a longer commute if they can save on housing costs. And less expensive downtown cores are gaining in popularity relative to the pricier suburbs nearby.
Cryptocurrency Regulations Tightening
Another luxury global economic development is a tightening of protocols for crypto currency purchases. While not as active in the Philadelphia area, crypto luxury home purchases have been viable in New York City for several years.
Earlier this year the first cryptocurrency and blockchain luxury home purchase in the US was recorded in Miami.
Main Line and Philadelphia Statistics
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If you’d like to know the current market value of your home, let’s talk! After all, that’s what really matters!