LUXURY MARKET REPORT
JUNE 2022
www.PrincessPan.com
THIS IS YOUR
LUXURY MARKET REPORT
MAP OF LUXURY RESIDENTIAL MARKETS
W
elcome to the Luxury Market Report, your guide to luxury real estate market data and trends for North America. Produced monthly by The Institute for Luxury Home Marketing, this report
provides an in-depth look at the top residential markets across the United States and Canada. Within the individual markets, you will find established luxury benchmark prices and detailed survey of luxury active and sold properties designed to showcase current market status and recent trends. The national report illustrates a compilation of the top North American markets to review overall standards and trends.
Copyright © 2022 Institute for Luxury Home Marketing | www.luxuryhomemarketing.com | 214.485.3000 The Luxury Market Report is a monthly analysis provided by The Institute for Luxury Home Marketing. Luxury benchmark prices are determined by The Institute. This active and sold data has been provided by REAL Marketing, who has compiled the data through various sources, including local MLS boards, local tax records and Realtor.com. Data is deemed reliable to the best of our knowledge, but is not guaranteed.
– LUXURY REPORT EXPLAINED – The Institute for Luxury Home Marketing has analyzed a number of metrics — including sales prices, sales volumes, number of sales, sales-price-to-list-price ratios, days on market and price-per-square-foot – to provide you a comprehensive North American Luxury Market report. Additionally, we have further examined all of the individual luxury markets to provide both an overview and an in-depth analysis - including, where data is sufficient, a breakdown by luxury single-family homes and luxury attached homes. It is our intention to include additional luxury markets on a continual basis. If your market is not featured, please contact us so we can implement the necessary qualification process. More in-depth reports on the luxury communities in your market are available as well. Looking through this report, you will notice three distinct market statuses, Buyer's Market, Seller's Market, and Balanced Market. A Buyer's Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/or price point. By contrast, a Seller's Market gives sellers greater control over the price point. Typically, this means there are few homes on the market and a generous demand, causing competition between buyers who ultimately drive sales prices higher. A Balanced Market indicates that neither the buyers nor the sellers control the price point at which that property will sell and that there is neither a glut nor a lack of inventory. Typically, this type of market sees a stabilization of both the list and sold price, the length of time the property is on the market as well as the expectancy amongst homeowners in their respective communities – so long as their home is priced in accordance with the current market value.
REPORT GLOSSARY REMAINING INVENTORY: The total number of homes available at the close of a month. DAYS ON MARKET: Measures the number of days a home is available on the market before a purchase offer is accepted. LUXURY BENCHMARK PRICE: The price point that marks the transition from traditional homes to luxury homes. NEW LISTINGS: The number of homes that entered the market during the current month. PRICE PER SQUARE FOOT: Measures the dollar amount of the home's price for an individual square foot. SALES RATIO: Sales Ratio defines market speed and determines whether the market currently favors buyers or sellers. Buyer's Market = up to 14%; Balanced Market = 15 to 20%; Seller's Market = 21% plus. If >100%, sales from previous month exceed current inventory. SP/LP RATIO: The Sales Price/List Price Ratio compares the value of the sold price to the value of the list price.
“This “sudden” upward shift of inventory has already started the rumor that the housing market is ready to burst its bubble – and indeed, some highly inflated markets and overpriced properties may well be impacted – but most experts acknowledge that this is simply the market finally starting to cool.”
NORTH AMERICAN LUXURY REVIEW Luxury Property Inventory Levels Increase – What is the Significance? May saw a comparatively significant upward shift in the number of homes listed for sale, especially compared to the same period in 2021. This was not unexpected, as there has been a gradual increase of new listings and a slower escalation of price increases over the last few months. According to our analysis of North America’s top 140 luxury markets, the new listings entering the market in May 2022 increased by 61.3%, resulting in the single-family home inventory level rising by 27.5% compared to May 2021. In the attached property market, the numbers were less dramatic but still significant, with 37.3% of new listings entering the market, increasing the inventory level by 1.5% in May 2022 compared to 2021. Overall, the median price for properties in the Top 10% of the market rose approximately 16% year over year. Although this is still a substantial percentage increase, it is smaller than May 2021, which reported a 24% increase over May 2020. Despite the rising inventory levels, the market remains extraordinarily strong; the sold price to list price percentage rose by 1% in May 2022, above an already unprecedented 100% ratio in May 2021, and days on market for sold properties fell by 30%. Of the 140 markets researched, 129 remain seller’s markets – not surprisingly, the markets that are either balanced or become buyers’ markets are seasonal markets, such as ski resorts and winter sunshine destinations, whose main buying season has finished.
The Lead-Up There is often a narrow window of opportunity for those sellers looking to sell at the top of the market; after all, who doesn’t want to maximize the return on their investment! Judging when the market will peak and leveraging a seller’s market is not an easy task, even for some of the most seasoned professionals. The current market has offered many a homeowner the opportunity to sell far above pre-covid expectations; however, it has also come with its own challenges. In the first four months of 2022, many homeowners were hesitant to put their property on the market, fearing that they would not find a new property because of the lack of inventory or that prices would continue to escalate, and they would find themselves priced out. But as prices began to level out over the last two months, sellers started to feel more comfortable putting their homes on the market, and the level of inventory in many luxury locations throughout North America increased significantly in May.
Bubble or Cooling This “sudden” upward shift of inventory has already started the rumor that the housing market is ready to burst its bubble – and indeed, some highly inflated markets and overpriced properties may well be impacted – but most experts acknowledge that this is simply the market finally starting to cool. No one could expect the luxury housing market to continue accelerating at the velocity seen over the two years; the epic run had to end one day. Economic uncertainty, rising interest rates, volatile stocks, supply issues, and increased cost of living are all aspects that, even for the ultra-wealthy, could start to impact property purchase decisions. A recent report released by Redfin states, “Sales of luxury U.S. homes in the top 5% of the market1 fell 17.8% year over year during the three months ending April 30, the largest drop since the onset of the coronavirus pandemic, sending shockwaves through the housing market.” As home prices increased, it is true that the number of people qualified to purchase a luxury property has declined. However, it MUST be noted that during the first four months of 2022, the lack of “preferred” property types available for sale was the main reason for the restricted number of sales. Now that the inventory crunch has started to ease, this does provide an opportunity for buyers, especially as more inventory is also anticipated to help tame the pace of price growth. May’s statistics confirm that homes in the very high end of the luxury market are seeing the most significant impact, with reports of less interest from wealthy buyers compared to last year and homes remaining on the market for longer periods. In contrast, there are still many price points and locations seeing high demand – especially if the supply of properties has not increased substantially.
Inventory Level Reality It is important to put everything into context as it will still take a lot more inventory to see a truly meaningful impact on the rate of price increases, especially in the low to mid-price luxury ranges. Homes are still selling quickly, spending four days less on the market than this time last year. Moreover, even with the current increases in supply, inventory remains nearly 50% below its pre-Covid levels, keeping competition tight for now. “Nevertheless, a slow but steady increase in inventory could signal the start of market trends that will finally work in buyers’ favor. With more options, home shoppers may see a bit more negotiating room and time to make decisions, even as market conditions continue to favor sellers,” Realtor.com chief economist Danielle Hale stated in a report dated June 4.2 While buyers are the beneficiaries of this increased inventory, most experts do not predict a major housing price correction or bubble burst for multiple reasons. The U.S. housing crash of 2008 is still fresh in individuals’ minds, so it’s important to understand that there have been significant changes in lending money. Regulations and systems that provide warning signals and offer tools have been implemented to help thwart a similar crisis. Unlike the lending of money, a major factor in the last real estate crisis, excessive borrowing is not one of the factors fueling the current housing boom. Individuals who are purchasing have the financial means, often buying for cash or have leveraged long-term low-interest rates. The supply of homes is severely out of balance across all price points compared to the demand. The sudden increase in demand for homes and the types of properties, fueled by the pandemic situation in 2020, was not anticipated by the building industry, leaving a significant shortage of new homes entering the market. It is reported that there is nearly a 10-year imbalance and that it will take several years of significant construction to add enough new supply of homes to balance the demand. Construction has continued to increase but still not enough to see an immediate impact, contributing to the unlikelihood of home prices falling.
Add in the last but important demographic of new buyers – Millennials, both above and below 30, followed by Gen Zers – and their demand for larger, spacious properties, and the upward pressure on prices continues.
Homebuyer Generation
% of 2021 Buyers
Median Age in Group
Gen Zers: 21 Years and Younger
2
21
Younger Gen Y/Millennials: 22 to 30 Years
14
27
Older Gen Y/Millennials: 31 to 40 Years
23
35
Gen Xers: 41 to 55 Years
24
48
Younger Boomers: 56 to 65 Years
18
61
Older Boomers: 66 to 74 Years
14
69
Silent Generation: 75 to 95 Years
5
78
Source: National of Realtors
Although this chart is for the total real estate market, it highlights the significance of these two new groups and their impact on the demand for real estate. First-time homeowners represent at least 30% of people purchasing homes – according to data by both the National Association of Realtors (NAR) and the Canadian Real Estate Association (CREA) – with most being under 40 years old. “In a few years, Gen Z will be turning 30 and more financially ready to become homeowners than Millennials were at their age,” says Polina Ryshakov, senior director of research and lead economist at Sundae, a real estate marketplace for distressed properties. “This means that the demand for homes will be as high, if not higher, while inventory will still be behind in the demand.”
Warning Signs and New Challenges The future is not all rosy; some warning signs point to more negative impacts on the real estate market, including continued rising inflation and ongoing geopolitical issues that affect supply chains. As stated earlier, purchasing a property in today’s market will face new challenges compared to last year, but there is a silver lining. If inventory continues to increase, buyers will not only have more choice, but they will also face fewer multiple offer situations, be less likely to have to pay substantially above the appraised value and will not need to waive all the contingencies to secure a property. The art of selling and buying in this market needs a critical and analytical approach; understanding the realities and setting expectations accordingly will ensure that goals are achieved. For homeowners looking to buy or sell in today’s market, we recommend working with a Realtor who can capitalize on the preferences, trends, and demands in this dynamic and evolving environment. 1
Redfin Estimates homes’ market values and defines luxury homes as the most expensive 5% of homes in each metro area.
2
https://www.realtor.com/research/video-weekly-economic-and-housing-market-update-june-10-2022/
– 13 - MONTH MARKET TRENDS – FOR THE LUXURY NORTH AMERICAN MARKET
Single-Family Homes
Attached Homes
Single-Family List Price
Attached List Price
All data is based off median values. Median prices represent properties priced above respective city benchmark prices.
20
DAYS ON MARKET
18 16 14 12 10
16 11
13
14
15
15
15
15
11
12
18
17
11
16
17 12
15
11
11
11
9
8 6
7
7
8
8
8
4 2 JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
$552 $448
$443
$526
$543
$423
$526 $420
$412
$516
$534 $416
$496
$401
$401
$495
$495 $399
$482
$480
$392
$300
$379
$390
$400
$494
$500
$517
$600
$200
$100
$0
SALES PRICE VS. LIST PRICE
JUN
$379
PRICE PER SQUARE FOOT
0 MAY
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
$2,100,000 $1,900,000 $1,700,000
$1,500,000 $1,300,000 $1,100,000
$900,000 $700,000 $500,000
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
Discrepancies in previous month statistics between the May 2022 and June 2022 reports are due to the addition of Hamilton, ON and Smith Mountain Lake, VA.
– LUXURY MONTHLY MARKET REVIEW – A Review of Key Market Differences Year over Year May 2021 | May 2022
SINGLE-FAMILY HOMES May 2021
May 2022
May 2021
Median List Price
$1,600,000 $1,628,000
Total Inventory
Median Sale Price
$1,339,500 $1,300,000
New Listings
Median SP/LP Ratio Total Sales Ratio Median Price per Sq. Ft.
100.00%
100.59%
63.35%
62.48%
$379
$448
Total Sold
31,059
39,248
13,191
21,182
19,677
24,521
11
7
3,648
3,171
Median Days on Market Average Home Size
May 2022
Median prices represent properties priced above respective city benchmark prices.
7,991
4,844
New Listings
Total Sold
4
1.37%
Med. Sale Price
Days on Market
Sales Ratio
39,500
$
SINGLE-FAMILY HOMES MARKET SUMMARY | MAY 2022 •
Official Market Type: Seller's Market with a 62.48% Sales Ratio.1
•
Homes are selling for an average of 100.59% of list price.
•
The median luxury threshold2 price is $925,000, and the median luxury home sales price is $1,300,000.
•
Markets with the Highest Median Sales Price: Aspen ($35,000,000), Telluride ($7,100,000), Vail ($4,510,000), and Los Angeles Beach Cities ($4,487,500).
•
Markets with the Highest Sales Ratio: Hamilton Country (199%), East Bay (168%), Seattle (167%) and Waterloo Region (143%). 1
Sales Ratio defines market speed and market type: Buyer's < 15.5%; Balanced >= 15.5 to < 20.5%; Seller's >= 20.5% plus. If >100%, sales from previous month exceeds current inventory. 2The luxury threshold price is set by The Institute for Luxury Home Marketing.
– LUXURY MONTHLY MARKET REVIEW – A Review of Key Market Differences Year over Year May 2021 | May 2022
ATTACHED HOMES May 2021
May 2022
May 2021
Median List Price
$994,500
$999,000
Total Inventory
Median Sale Price
$869,900
$855,000
100.00%
100.01%
46.35%
56.32%
$494
$552
Median SP/LP Ratio Total Sales Ratio Median Price per Sq. Ft.
May 2022
12,568
12,778
New Listings
4,615
6,386
Total Sold
5,825
7,196
12
8
1,977
1,769
Median Days on Market Average Home Size
Median prices represent properties priced above respective city benchmark prices.
1,771
1,371
New Listings
Total Sold
Med. Sale Price
Days on Market
14,900
$
4
9.97% Sales Ratio
ATTACHED HOMES MARKET SUMMARY | MAY 20 22 •
Official Market Type: Seller's Market with a 56.32% Sales Ratio.1
•
Attached homes are selling for an average of 100.01% of list price.
•
The median luxury threshold2 price is $700,000, and the median attached luxury sale price is $855,000.
•
Markets with the Highest Median Sales Price: Aspen ($7,000,000), Vail ($4,085,000), San Francisco ($2,500,000), and Naples ($2,200,000).
•
Markets with the Highest Sales Ratio: Howard County (491%), Santa Barbara (286%), Waterloo Region (222%) and Lake Norman (220%). 1
Sales Ratio defines market speed and market type: Buyer's < 15.5%; Balanced >= 15.5 to < 20.5%; Seller's >= 20.5% plus. If >100%, sales from previous month exceeds current inventory. 2The luxury threshold price is set by The Institute for Luxury Home Marketing.
June
2022
Princess Pan Real Estate Residential | Commercial
VANCOUVER BRITISH COLUM B I A www.PrincessPan.com
VANCOUVER
SINGLE - FAMILY HOMES
LUXURY INVENTORY VS. SALES | MAY 2022 Inventory
Sales
Luxury Benchmark Price 1: $2,500,000 $13,200,000+ $8,200,000 - $13,199,999 $7,200,000 - $8,199,999 $6,200,000 - $7,199,999
59
1
59
1
$3,700,000 - $3,949,999
2 Total Sales Ratio153 : 9%
7 84
3
84
4 45
6
71
20
$2,950,000 - $3,199,999
130
12
$2,700,000 - $2,949,999
1
96
10
$3,200,000 - $3,449,999
$2,500,000 - $2,599,999
114
12
$3,450,000 - $3,699,999
$2,600,000 - $2,699,999
Buyer's Market
94
$4,200,000 - $4,699,999 $3,950,000 - $4,199,999
Total Inventory: 1,288 Total Sales: 122
4
$5,200,000 - $6,199,999 $4,700,000 - $5,199,999
113
3
104
23 50
8
32
8
Square Feet3
Price
Beds
Baths
Sold
Inventory
Sales Ratio
-Range-
-Median Sold-
-Median Sold-
-Median Sold-
-Total-
-Total-
-Sold/Inventory-
0 - 1,999
$2,700,500
3
2
4
94
4%
2,000 - 2,999
$2,850,000
4
3
41
389
11%
3,000 - 3,999
$3,440,000
5
4
42
275
15%
4,000 - 4,999
$3,944,000
6
6
20
249
8%
5,000 - 5,999
$4,602,500
5
6
10
103
10%
6,000+
$8,000,000
5
7
5
172
3%
The luxury threshold price is set by The Institute for Luxury Home Marketing. 2Sales Ratio defines market speed and market type: Buyer's < 14.5%; Balanced >= 14.5 to < 20.5%; Seller's >= 20.5% plus. If >100% MLS® data reported previous month’s sales exceeded current inventory.
VANCOUVER
SINGLE - FAMILY HOMES
13 - MONTH LUXURY MARKET TREND 4 Median Sales Price
$3,450,000
$3,350,000
1,222
1,181
173
May-21
$3,179,000
1,198
138 Jun-21
118 Jul-21
$3,268,000
$3,210,000
1,100
1,158
97 Aug-21
121 Sep-21
Inventory
$3,398,400
$3,427,000
1,085
1,012
146 Oct-21
$3,550,000
Nov-21
$3,398,300
114
94 Dec-21
$3,230,000
$3,200,000
Jan-22
195
$3,350,000
191
Feb-22
Mar-22
$3,294,000
1,288
1,173
1,033
902
822
787 139
Solds
171
122
Apr-22
May-22
MEDIAN DATA REVIEW | MAY TOTAL INVENTORY May 2021
May 2022
1,181
1,288 VARIANCE: 9 %
SALE PRICE PER SQFT. May 2021
1,068
$
May 2022
1,087 VARIANCE: 2 % $
TOTAL SOLDS May 2021
SALES PRICE
May 2022
173
122 VARIANCE: -29 %
May 2021
$
3.45m
3.29m VARIANCE: -5 %
SALE TO LIST PRICE RATIO May 2021
May 2022
May 2022
$
DAYS ON MARKET May 2021
98.80% 97.31% VARIANCE: -2 %
May 2022
9
11 VARIANCE: 22 %
VANCOUVER MARKET SUMMARY | MAY 2022 • The Vancouver single-family luxury market is a Buyer's Market with a 9% Sales Ratio. • Homes sold for a median of 97.31% of list price in May 2022. • The most active price band is $3,200,000-$3,449,999, where the sales ratio is 28%. • The median luxury sales price for single-family homes is $3,294,000. • The median days on market for May 2022 was 11 days, up from 9 in May 2021.
Square foot table does not account for listings and solds where square foot data is not disclosed. 4 Data reported includes Active and Sold properties and does not include Pending properties.
3
VANCOUVER
ATTACHED HOMES
LUXURY INVENTORY VS. SALES | MAY 2022 Inventory
Sales
Luxury Benchmark Price 1: $1,400,000 $9,000,000+ $7,700,000 - $8,999,999 $6,700,000 - $7,699,999 $5,700,000 - $6,699,999
$4,900,000 - $5,699,999 $4,100,000 - $4,899,999 $3,500,000 - $4,099,999 $2,900,000 - $3,499,999
$2,500,000 - $2,899,999 $2,100,000 - $2,499,999 $1,900,000 - $2,099,999
18
1 7
0
Total Inventory: 965 12
0
Total Sales: 137 Buyer's Market
8
0 1
35
1
43
3
71
3
85
6
115
15
$1,500,000 - $1,599,999 $1,400,000 - $1,499,999
1
108
18
$1,700,000 - $1,899,999
$1,600,000 - $1,699,999
Total Sales Ratio2: 14%
25
156
36 88
17
103
17
91
19
Square Feet3
Price
Beds
Baths
Sold
Inventory
Sales Ratio
-Range-
-Median Sold-
-Median Sold-
-Median Sold-
-Total-
-Total-
-Sold/Inventory-
0 - 999
$1,628,000
2
2
4
89
4%
1,000 - 1,999
$1,730,000
3
3
111
701
16%
2,000 - 2,999
$1,888,000
3
3
20
137
15%
3,000 - 3,999
$2,530,000
3
4
1
28
4%
4,000 - 4,999
NA
NA
NA
0
4
0%
5,000+
$9,400,000
4
6
1
6
17%
The luxury threshold price is set by The Institute for Luxury Home Marketing. 2Sales Ratio defines market speed and market type: Buyer's < 14.5%; Balanced >= 14.5 to < 20.5%; Seller's >= 20.5% plus. If >100% MLS® data reported previous month’s sales exceeded current inventory.
VANCOUVER
ATTACHED HOMES
13 - MONTH LUXURY MARKET TREND 4 Sale Price
$1,670,000
$1,759,900
786
746
129 May-21
$1,767,500
745
109 Jun-21
$1,722,500
Jul-21
114 Aug-21
$1,750,000
752
739
666
116
$1,752,000
Inventory
119 Sep-21
$1,744,950
739
135 Oct-21
$1,850,000 $1,700,000
140
$1,688,500
160
103 Dec-21
$1,675,900
Jan-22
$1,750,000
221
216
Feb-22
Mar-22
$1,768,000
965
850
783
642
610
560
Nov-21
Solds
191
137
Apr-22
May-22
MEDIAN DATA REVIEW | MAY TOTAL INVENTORY May 2021
May 2022
746
965 VARIANCE: 29 %
SALE PRICE PER SQFT. May 2021
May 2022
1,197
$
1,231 VARIANCE: 3 % $
TOTAL SOLDS May 2021
May 2022
129
137 VARIANCE: 6 %
SALE TO LIST PRICE RATIO May 2021
May 2022
99.37% 100.00% VARIANCE: 1 %
SALES PRICE May 2021
$
1.67m
May 2022
1.77m VARIANCE: 6 % $
DAYS ON MARKET May 2021
May 2022
8
8 VARIANCE: 0 %
VANCOUVER MARKET SUMMARY | MAY 2022 • The Vancouver attached luxury market is a Buyer's Market with a 14% Sales Ratio. • Homes sold for a median of 100.00% of list price in May 2022. • The most active price band is $1,700,000-$1,899,999, where the sales ratio is 23%. • The median luxury sales price for attached homes is $1,768,000. • The median days on market for May 2022 was 8 days, remaining the same from May 2021.
Square foot table does not account for listings and solds where square foot data is not disclosed. 4 Data reported includes Active and Sold properties and does not include Pending properties.
3
Thank you for taking time to view this report. For more information about Vancouver luxury market and buy or sell your luxury property, please feel free to contact me.
PRINCESS PAN PERSONAL REAL ESTATE CORPORATION
www. PrincessPan.com