WELCOME MESSAGE

THIS IS YOUR LUXURY MARKET REPORT

MAP OF LUXURY RESIDENTIAL MARKETS

Welcome 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 © 2021 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 compiled by 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.

NORTH AMERICAN LUXURY REVIEW

LUXURY HOME SALES SET TO SURPASS 2019 AND 2020 NUMBERS

As we enter in the last quarter of 2021, we review the number of year-to-date sales as they compare to the full years of 2019 and 2020. We also look at several trends to establish the types of properties currently being purchased and to ascertain which were seeing the highest demand in the luxury real estate market.

Seven takeaways for the North American Luxury Market:

1. The number of sales in the luxury real estate market, year to date, have already surpassed the number of sales for the full year of 2019.

2. Demand remains strong, with the majority of luxury markets reporting sales in 2021 already outpacing the total number of sales in 2020.

3. The luxury markets whose sales are not currently outpacing 2020 are, for the most part, predicted to do so by the end of 2021.

4. Demand for properties in the $5 million range and above in 2021 is currently in the double digits compared to 2019, ie. there are more than double the number of $5 million + homes sold in 2021 than in the full year of 2019.

5. Sales of properties in the $1-5 million range are currently 50% higher than the full year of 2019 but are predicated to be as much as 100% higher by the end of 2021.

6. Inventory levels continue to remain at one of the lowest levels of availability, certainly over the last 20 years, if not longer.

7. The median sold price in for luxury single-family homes, year to date in 2021, is approximately

US$1.7 million, a 22% increase compared to 2020, and for luxury attached homes it is approximately US$1 million, a 12.8% increase compared to 2020.

What does this tell us? In simple terms, the luxury real estate market remains extremely robust and luxury properties are still very much in high demand. If trends remain on track, then 2021 could report one of the strongest years on record for the number of sales as well as the median price point for luxury properties.

However, despite these extraordinary numbers, the fall market is currently experiencing a slowing down, especially if we compare it to the activity of last spring’s market — not so much in the number of sales, but more that price increases have slowed, inventory levels increased, and there are fewer bidding wars. There is more a semblance of normality for all parties concerned in today’s market.

Similarly, communities themselves are starting to return to a more normal way of life, as individuals have learned to live with the COVID-19 restrictions, coupled with more and more North Americans being vaccinated, which has helped reduce the frenzied buying activity as well as the mass exodus out of cities. In fact, the number of individuals returning to city life has increased exponentially month-over-month in 2021, as eased pandemic restrictions has renewed some confidence.

The two largest property types that are trending this fall are city dwellings, condominiums in particular, and second home properties.

Major cities such as New York, San Francisco, Chicago, Toronto, and to some extent Los Angeles (whose urban sprawl made it easier to relocate to the city’s outer limits) offered returning buyers a softer condominium market in which to negotiate.

In many of the high-density metropolitan markets, inventory levels are still higher comparative to the numbers for the fall months of 2019. This allows buyers to be choosier, and price points,

especially when compared to the escalating prices found in suburban counterparts, seem comparatively affordable.

However, buyers sitting on the fence might well find themselves pushed out of the market if they wait too long. Prices of condominiums are escalating as inventory levels are starting to fall, and negotiations will become tighter in terms of what a seller is willing to do to close their sale.

So, too are we seeing developers starting to scale back on the concessions and discounts they offered to entice buyers, who were once skittish at the prospect of buying a condo, especially in new luxury buildings located in metropolitan markets.

New developments have specifically seen an upswing in demand whether this in a metropolitan area or second home location, particularly if their specifications cater to three key demands. Space is an obvious requirement, but flexibility of its use is highly prized – rooms or spaces that can be used for different purposes, but most importantly offer a dedicated location to be able to work from home, if required. Wellness is key, from offering a truly comfortable space to air, water, and heat filtration systems. Equally, building amenities that provide residents the opportunity to enjoy a dedicated, communal location to views, amenities, and outdoor space.

Townhomes or Brownstones within the inner cities were not as affected as condominiums during 2020, in fact many affluent condominium owners who could not or did not want to leave their respective city tended to upsize into these types of properties, especially if they offered a private outdoor space.

Today, they are still highly prized, especially by families who wish to return to city life but are not ready to move back into an apartment block. This