What to Expect in 2023: The Continued Development of Ultra-Luxury Real Estate

 

Austin home prices have dropped 9.7% in 2022, and yet, luxury homes are still getting multiple offers as Austin has become a prime location for those looking for an alternative to California. This has caused property values in Austin to increase compared to other neighborhood luxury markets in Texas, which is good news for sellers.

Understanding the ins and outs of ultra-luxury real estate and how it compares to a regular real estate market is essential. With the constant fluctuations of the markets, it can be hard to know what to expect in ultra-luxury real estate in 2023, but here are a few things to help you navigate the market of ultra-luxury real estate.

The process of buying or selling your home can be a complex endeavor. It’s important to be patient during each process when navigating the luxury market because it works differently. Sellers will see that it might take longer to sell, and buyers will experience a longer wait to find the high-end amenities they desire.

It’s vital to know what similar houses in the area are going for as a seller. This helps set the right price and avoid having your home stay on the market longer than you want. You’ll also want to understand the amenities you should highlight in your listing to attract more buyers.

Making sure you’re up to date on the current luxury real estate market as either a buyer or a seller allows you to be more prepared when jumping into it.

 

In 2022, 86% of sellers and buyers were assisted by a real estate agent when entering the market. When buying or selling your luxury home, you should ensure that the realtor you choose has experience with this type of home. Do they have local knowledge to help set proper pricing? Are they communicating in a way that works best for you? You want to make sure you're on the same page.

The right agent helps you feel less overwhelmed, answers your questions, explains the process, makes open-house appointments, juggles multiple offers, and deals with most of the complicated pieces on either end.

In May of 2023, the median average mortgage rate was 6.39%, and inflation rates are still high at 3% as of June 2023. The interest attached to mortgages plus the high inflation rates has caused the regular housing market to stall, as February 2023 saw the lowest mortgage activity in over 28 years. Most homebuyers are simply waiting until the market becomes more affordable, which also means sellers are having a harder time selling their homes.

The luxury real estate market is not having as much of a problem. For ultra-luxury real estate buyers, the inflation and interest rates being on the rise do not affect them as much because they are more likely to bypass the step of having to apply for a mortgage with high-interest rates. Also, luxury buyers are less likely to feel the effects of inflation because of their financial standing.

Most experts agree that the value of investing in real estate in 2023 will not be diminished, even in the complex market. Not only has high-end real estate been seen as a safe way to get a great return on your investment, but the idea of an improved lifestyle and financial security has become just as vital to investors.

The continued interest in investing in luxury real estate, regardless of the ever-changing market, remains strong because of the potential rental opportunities, tax savings, and increased resale value. In Austin specifically, investing in luxury real estate is particularly attractive because of its significant job market, lower taxes, and the expectation of the increased appreciation value seen in Austin year after year.

Austin is one of only two luxury real estate markets to see significant growth and has successfully replaced California and New York as the typical luxury buyer destination, with emphasis on the fact that it’s become cheaper while not having to sacrifice the amenities or privacy they’re looking for.

Luxury real estate buyers are looking for specific amenities when searching for a new home. For instance, recently, a large focus has been on buying homes with green and smart technology. More than half of current buyers want homes equipped with energy-efficient appliances, video doorbells, and top-of-the-line home security systems.

Being able to relax and entertain outside as much as you can inside the home is another trend that is being seen across luxury real estate. Whether buyers want to enjoy their view of the ocean or mountains or they want a space to entertain, having an outdoor space, including a kitchen, is a hot commodity in this market. Also, in warmer states such as Austin, buyers are looking for swimming pools to be able to enjoy the fresh air but have a place to cool off as well.

Over the last few years, space for a home office has become an amenity that luxury buyers are insistent on, which is great news for sellers if you can utilize that existing space as a selling point. Sellers can try to incorporate a space in the home for a private office space, and buyers will be looking for some additional square footage if they will need to upgrade to put one in.

Austin real estate agent, Nicole James, is ready to support you in selling your ultra-luxury home. Having the right real estate agent for this process cannot be emphasized enough, and having someone like Nicole, who has the experience and local knowledge of the area, can be crucial.
Reach out to Nicole today and start the process of selling your home.