ARE LUXURY HOME SALES THE SILVER LINING OF COVID-19?
More homebuyers are searching for properties listed for $1 million or more these days, as the pandemic continues to create an appetite for larger properties. People are looking to ride out the remainder of working and schooling remotely due to COVID-19 in a home with more space. The luxury home sales numbers say it all. More than one in 10 homebuyers are looking in the $1 million or more range. That may be the one silver lining of the pandemic. In fact, although sales on the lower end of the market have all but seized up, the pandemic has done little to slow the luxury market.
Why is Luxury Real Estate Hot?
There are many reasons for the rise of million-dollar plus homes sales. First off, the surge has to do with wealthier, white-collar workers who’ve held onto jobs during the pandemic and are now looking to move. Then there’s the fact that those wealthy individuals are benefiting from the pandemic-driven recession, as they earn money from rising real estate values and their stock portfolios. The historically low interest rates helps too, leaving buyers with plenty of cash on hand.
The trend started in early 2020 when the housing market more than regained its early-year momentum, to finish at new highs for luxury home sales last fall. So far in 2021, home sales have continued that trend, remaining steady, propelled by underlying demand. This demand comes from a healthy share of Millennial and Gen-Z first-time buyers as well as trade-up buyers from the Millennial and older generations. It also has to do with limited inventory, which is expected to change later in the year.
In fact, by the end of the year, home sales are expected to come in 7.0% above 2020 levels. This, as vaccines for the coronavirus become broadly available to the public, and economic growth reflects the return of more normal patterns of consumer spending.
2021 a buyer’s market?
I wouldn’t call 2021 a buyer’s market just yet. But I will say that the housing market this year is already much more hospitable for buyers than it has been for a long time. With companies continuing to allow workers more flexibility, we’re seeing the inner as well as outer suburbs and smaller towns like we have here in Santa Barbara continuing to entice home buyers and builders alike. This increased number of existing sellers, along with new construction has combined to add inventory and restore buyers with some bargaining power.
Although the pace is expected to slow from what we experienced in late 2020, fast sales will remain the norm in 2021 for many parts of the country, including right here on the American Rivera. Buyers will remain plentiful and low mortgage rates will keep purchasing power healthy.
Will prices continue to rise?
As far as prices go, experts expect the momentum of home price growth to slow as more sellers come to market and mortgage rates settle and eventually begin to turn higher. Still, sellers will remain in a good place over the coming year.
Once enough people are vaccinated, buyers will be able to visit homes in person. But don’t expect online searches to go away. Buyers will still take advantage of the industry’s acceleration toward technology to check out homes, explore neighborhoods, and research the purchase online. Why? To save time and energy by focusing on a more selectively curated list of homes to view in person.
Local Buyers and Sellers
That’s why I work so diligently to make sure my comprehensive website is up to date. I consider it to be my online home, where I can craft messages to my valuable and discerning clients, showcase my amazing listings, and offer valuable information for both buyers and sellers.
If you’re considering buying a home in Montecito, Hope Ranch or any of Santa Barbara’s upscale communities, now is the time to do it! It’s also a good time to sell. As a #1 real estate agent in Montecito, I can help both buyers and sellers. Last year alone, my luxury home sales were in excess of $260,000,000.
I make buying and selling real estate as easy as possible. Just take a tour of my website. You’ll see details of amazing properties for sale in the area, like the Premier Mediterranean-style Ennisbrook Estate pictured above. The spectacular 5-bedroom, 9-bath main house, along with two additional structures, is located in Montecito’s exclusive Ennisbrook community. The private enclave is made up of wonderful estates like this one, with most sitting on parcels ranging from 1 to 3 acres. This estate rests on approximately 2 acres and offers panoramic vistas of the Santa Ynez Mountains.
There’s also a versatile 2 room pool house on the property complete with its own fireplace and kitchenette. Imagine setting up the separate building as a private home office, gym, or additional guest suite. Another spacious guest house, featuring a kitchenette, bedroom with bath en suite, and another cozy fireplace might be a great spot for a quiet learning center.
Sellers also benefit from my sophisticated global marketing program designed to reach highly-qualified potential buyers locally, nationally and internationally. I strive to deliver a seamless transition between my buying and selling clients.
If you’re searching for $1 million-plus homes in Santa Barbara, please call me at (805) 886-9378 or email me at Cristal@montecito-estate.com. I can help you sell and find you a new home sweet home at the same time.