Q4 Luxury Market Trends

LUXURY MARKET TRENDS

THE NEW YEAR IS HERE!

The year 2022 was a dynamic year for luxury real estate and moving forward many eyes will be on the market to see what happens next!

After two years of frenzied markets and low inventory, the end of 2022 presented us with a calming of the “COVID boom” and brought more stability to many neighborhoods and communities. We’ve seen an increase in demand for homes in major cities near the business centers and a stabilization in some of the second-home markets.

We begin 2023 with a low level of luxury inventory combined with healthy buyer demand to set the stage for the upcoming seasonal increase of activity. As inflation continues to roll over, we will see two items occur. Home mortgage interest rates will lower and at some point, the stock market will surge. At the tail end of the first quarter in March, the prime luxury market season will begin and run through September.

We hope you’ll find the market information and luxury insights in this report helpful as you look to buy or sell your next home!

J. Lennox Scott Chairman and CEO John L. Scott Real Estate

EXCEPTIONAL HOMES

BY JOHN L. SCOTT

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We can ensure you that we are here for you and your family. The real estate market is fast-paced and ever changing, but what hasn’t changed, is our commitment to exceed your expectations when you are ready to buy or sell your home.

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JOHN L. SCOTT LUXURY SPECIALISTS SCHOLARS OF THE MARKET

Curious about luxury trends in your neighborhood? See what some of our real estate specialists had to say about the luxury market in their area.

The upper end of the market remained very selective in the 4th quarter, with buyer uncertainty about the future and higher interest rates fueling the fire for exacting negotiations on almost all properties. Some homes priced appropriately or with recent price reductions obtained offers at list price, while others that have been on the market longer and had ‘slight’ price adjustments sold with more aggressive offers.

ANNALEE BAGLIO

The luxury real estate market went still in Q3 and remains the same. Many luxury listings went off the market until after the first of the year in hopes of more post-holiday buyers/shoppers. High-end purchasers are sitting back and seeing how the first 6 months to 1 year shakes out in this corrective market. They are also eyeing the back foreclosure lists closely. Depending on rates and inventory, I anticipate there to be a spring/summer uptick in luxury purchases, but that is standard.

I expect the luxury custom home construction market to rise in Kitsap County as there are some lovely estate-worthy sized parcels coming available in the Fiber Optic zones. I also anticipate if the spring proves productive that we may see a liquidation of luxury homes in the higher age bracket.

Port Orchard

PATTI

CHALKER

Redmond

In Q4, many prospective buyers expressed uncertainty in the stock market, and hesitation to move money around. We also have a number of clients relocating from larger markets who were affected by recent layoffs. Luxury homes are taking longer to sell than in 2021, but not significantly longer than in years past. We’re seeing fewer multiple-offer scenarios, so pricing strategy has become more important. We have a number of high-end buyers who remain interested in purchasing this year, but seem to be waiting for interest rates to come down. We expect more conversations about seller-carried financing as interest rates continue to rise.

ROWE

TEAM Ashland

PUGET SOUND

The luxury real estate market in Seattle, West Bellevue and on the Eastside continued the intensity adjustment which began in the previous quarter of 2022. Over the winter fewer listings came on the market with many buyers waiting in the wings and taking their time.

Active inventory has continued to tick upwards as we’ve seen increased days on market for many listings in Seattle, West Bellevue and Mercer Island. The seasonality of the closing months of the year typically results in a slower pace for sellers and buyers alike.

SOLD

BAINBRIDGE ISLAND

Bainbridge Island remains a top luxury destination in the Pacific Northwest due to its enchanting island lifestyle and proximity to Seattle. Residents also enjoy the scenery and opportunity to build community locally.

During the fourth quarter of 2022 we saw fewer new listings come on the market, however inventory to start 2023 remains extremely low. Buyers locally will likely face scarce luxury inventory until the luxury season really kicks off in 2023, during the months of March, April and May.

LUXURY WATERFRONT

LAKE WASHINGTON

Q4 2022 Q4 2021 % Change

Number of Sales 10 11 -9.0%

Total Dollar Volume 45,376,800 93,667,000 -51.5%

Average Sales Price 4,537,680 8,515,182 -46.7%

Average Days On Market 36 23 55.0%

Sold / List Price % 95.1% 96.6% -1.6%

Average Price per SQFT $1,311 $1,460 -10.2%

Quarter-end inventory 10 3 233.3%

LAKE SAMMAMISH

Q4 2022 Q4 2021 % Change

Number of Sales 3 7 -57.1%

Total Dollar Volume 8,298,000 39,421,000 -78.9%

Average Sales Price 2,766,000 5,631,571 -50.8%

Average Days On Market 55 16 242.7%

Sold / List Price % 97.8% 101.2% -3.4%

Average Price per SQFT $1,009 $1,053 -4.0%

Quarter-end inventory 9 3 200.0%

KING COUNTY

Q4 2022 Q4 2021 % Change

Number of Sales 28 42 -33.3%

Total Dollar Volume 124,175,800 260,942,803 -52.4%

Average Sales Price 4,434,850 6,212,924 -28.6%

Average Days On Market 53 22 147.9%

Sold / List Price % 94.1% 98.7% -4.7%

Average Price per SQFT $1,224 $1,298 -5.7%

Quarter-end inventory 41 18 127.7%

The data is for waterfront single family residences and condos over $2M. Lake Washington is MLS areas 500, 510, 520, 560, 600, 350, 380, 390, 710, 720. Lake Sammamish is MLS areas 530, 540. Some John L. Scott offices are independently owned and operated. All reports presented are based on data supplied by the NWMLS, RMLS, Spokane MLS, and the Central Oregon MLS. Neither the Associations nor the MLS guarantees or is in anyway responsible for its accuracy. Data maintained by the Associations or the MLS may not reflect all real estate activities in the market. Information deemed reliable but not guaranteed.

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EASTERN WASHINGTON & IDAHO

OREGON & SOUTHWEST WASHINGTON

FOURTH QUARTER HIGHLIGHTS

In the fourth quarter of 2022, luxury sales activity in the Portland Metro area has remained steady with a healthy supply of inventory up to $1.5M. The area has a good amount of inventory compared to similar metro areas, which translates to great opportunities for luxury buyers.

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PORTLAND METRO

Q4 2022 Q4 2021 % Change

Number of Sales 127 183 -30.6%

Total Dollar Volume 176,148,637 266,284,484 -33.8%

Average Sales Price 1,386,997 1,455,106 -4.6%

Average Days On Market 44 33 34.3%

Sold / List Price % 95.9% 99.2% -3.3%

Average Price per SQFT $524 $367 42.6%

Quarter-end inventory 137 87 57.5%

Luxury inventory continues to build slowly as a result of the intensity adjustment which began earlier in the year. Buyers in Portland, Lake Oswego and West Linn will be waiting patiently for each listing until the luxury market kicks into gear beginning in March 2023.

LAKE OSWEGO

Q4 2022 Q4 2021 % Change

Number of Sales 69 112 -38.3%

Total Dollar Volume 113,119,562 203,529,494 -44.4%

Average Sales Price 1,639,414 1,817,228 -9.7%

Average Days On Market 42 34 25.7%

Sold / List Price % 97.7% 98.2% -0.5%

Average Price per SQFT $633 $436 45.0%

Quarter-end inventory 88 56 57.1%

In the fourth quarter of 2022, we once again experienced the seasonal occurrence during which some sellers in Bend opted to take their homes off the market to reposition them in the spring. This phenomenon is known as the winter clean-up.

In a change of pace from the frenzy of the past two years, the available inventory as we start 2023 is healthy and offers options for buyers. Once the luxury market kicks off in March, April and May of this year, it will really be “go time” for buyers looking to buy a slice of Central Oregon living.

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Why Quality Visuals Matter in Luxury Property Marketing

MAKE A DIFFERENCE IN YOUR PROPERTY’S MARKETABILITY

By: Virtuance

When marketing luxury properties, quality visuals are essential. In today’s market, to establish an emotional connection with potential buyers, quality visuals are crucial to conveying the opulence and elegance of luxury properties. Furthermore, quality visuals can improve your luxury property’s marketing results in the following ways:

Communicate the property’s uniqueness

In creating quality visuals for luxury real estate marketing, every detail must be considered to ensure the property is accurately represented. From lush landscapes and picturesque views to tasteful décor and architectural elements, there is so much to show potential buyers.

Promote a lifestyle instead of a home

The right visuals can add a level of sophistication and elegance to your advertising. When viewing pictures of a property, luxury homebuyers expect the same quality as other high-end brands. Moreover, quality photos and videos create an emotional connection with buyers and a realistic picture of their lives on the property.

Expand your buyer base

Advertising luxury real estate should take into account that potential buyers may be from different parts of the world and may not have access to the property in person. Thus, the use of quality photos as marketing tools can help you reach a wider audience and increase your sales.

Provide dynamic views of the property

A property should be photographed from many angles, showing every aspect that makes it unique. 3D home tours, drone shots, and aerial photography are incredibly effective in providing buyers with a dynamic and comprehensive overview of the property.

By investing in quality visuals when marketing your luxury real estate property, you will no doubt reap great rewards, like higher sale prices and quicker turnarounds for completing transactions!

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