Sotheby’s International Realty 2022 Luxury Outlook Report reveals global trends
Return of the international buyer and hybrid work model fuels real estate investment
On Real Estate
Earlier this year, Sotheby’s International Realty announced the release of its 2022 Luxury Outlook report, which identifies trends that are likely to shape the world’s housing market in the year ahead and helps buyers and sellers make informed decisions. In the high-end real estate industry, the pandemic’s periodic start and stop effect exacerbated the already high demand in areas like Colorado’s resort markets, which led to inventory shortages and record-breaking real estate numbers in 2021.
Among the many report revelations, the allure of a hybrid work model in coveted communities, such as Colorado’s mountain towns, drove buyers en masse to areas like the Vail Valley. Once there, consumers sought out real estate as an investment and prioritized larger homes that could accommodate remote work offices and reasonable commute times. The global report also reveals that a plateau in the market surge is unlikely to happen as quickly as consumers would like, with real estate prices expected to continue to rise well into 2022.
Released in February, the 2022 Resort Report produced by LIV Sotheby’s International Realty (LIV SIR) revealed data that corroborates the 2022 Luxury Outlook report findings. The world-renowned Vail Valley experienced the historic surge in demand and prices as outlined in both the resort report and luxury outlook, with homes selling for 23.9% more than they did the previous year, raising the average sold price from $1,570,475 to $1,946,595 in 2021. As average sold prices rose from West Vail to Edwards, the average number of days on market decreased by 38.6%, from 114 days in 2020 to 70 in 2021.
While a world in and of itself, the Vail Valley is merely a fractional representative of the global real estate trends seen in 2021 and predicted for 2022. The expert insight and analysis of the global housing market within Sotheby’s International Realty’s 2022 Luxury Outlook report was compiled by surveying Sotheby’s International Realty agents worldwide who transact in the U.S. $10M+ price category. This information was complemented by supporting data from UBS Wealth Management; Henley & Partners, a global citizenship and residence advisory firm; the National Association of Realtors; in addition to art and luxury experts at Sotheby’s, the famed auction house, to round out luxury trends in the year to come.
Key report findings include:
- 2022 is likely to be the year of the international buyer as borders open and vaccinations and boosters roll out
- Nearly half of all respondents agree that a rise in interest rates might affect the market
- In North America, millennials and Gen Xers are expected to make up the majority of luxury homebuyers in the coming year
- Between 2018-2042, nearly U.S. $70 trillion will be passed down from older generations, and millennials will continue to use their share for real estate, according to Cerulli Associates
- In the U.S., price appreciation of second homes is expected to continue even after the number of transactions slowed due to limited inventory
- The most important amenities for today’s luxury buyers are a garage with storage, first-floor full bathroom, eat-in kitchen, and deluxe primary bedroom suite