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Luxury Outlook 2023

An ambitious exploration into high-end residential markets across the globe.

LuxuryOutlook.com

While conventional wisdom about supply and demand and interest-rate fluctuation would suggest luxury home prices should be falling, we simply did not see that in 2022. Prices, for the most part, remained steady in 2022.

We believe the reasons for prices staying strong are multifold First, the world’s seen a surge of wealth creation in recent years and the affluent still have more money to spend. Second, many luxury purchases are made in cash, so the high-end sector remains somewhat insulated from interest-rate fluctuations. Finally, there’s a lifestyle change resulting from Covid-19 that we believe is here to stay. People are spending more of their time at home and putting more of an emphasis on their home lives, even as the world has opened up. What that means is luxury homeowners can rationalize the expenses of owning multiple properties since they are spending more time in them and are therefore less likely to put them up for sale. As such, inventory continues to be low coupled with an under-supply of new construction.

Fannie Mae’s November 2022 forecast predicted that home sales will decline but begin to rebound in 2024. Fannie Mae economists also believe mortgage rates will steadily fall, but likely not drop below 6% any time soon. Despite this, luxury agents remain busy brokering deals for their clients, many of whom are looking to make opportunistic investments during a fluctuating market. From sustainable luxury items to recordbreaking auction sales and wine investments, visit LuxuryOutlook.com for a look beyond the real estate sector into what consumers of luxury goods desire.