Luxury real estate is rising in popularity. If you’re thinking of listing your fixer-upper home, how can you compete? To answer this question, let’s look at what a luxury home really is, how market demand is changing, and what this means for you as a seller.
What IS luxury, really?
When you think of luxury, the first thing that pops into mind is likely a big mansion on a huge lot with a price tag to match. Luxury homes do come with a higher price tag, of course, but the home itself isn’t always big.
With a great location, a smaller home can be luxury; imagine a beautifully updated condo in Georgetown or a peaceful waterfront cottage on Chincoteague Island. Investopedia notes that “wealthy buyers want locations with access to luxury activities such as high-end shopping, dining, and the arts, as well as proximity to other luxury homes.”
Of course, luxury also includes high-end features—according to Investopedia, this can include custom architecture, top-of-the-line finishes, and the best amenities like a chef’s kitchen, luxury pool, expansive owner’s suite, and the latest home automation.
Is luxury rising in popularity?
According to the Luxury Market Report from the Institute for Luxury Home Marketing, there’s been a substantial increase in how many buyers are purchasing luxury homes over the past two years. The report tells us that “North America recorded the fastest growth of demand during the first year of the pandemic. Also, demand has… consistently increased, and even in April 2022, we saw a higher volume of sales compared to 2021.”
Where is this demand coming from?
Why are more buyers looking for luxury? According to the report mentioned above, the demand is stemming from a rise in net-worth: “In 2020, we saw a 2.2% growth in the number of individuals with wealth of over $5 million in net value, but in 2021 that number grew by an outstanding 19.8%. This total increase has resulted in the introduction of over 660,000 new individuals into the high net-worth bracket.” Once people reach a certain net-worth threshold, they tend to look to luxury to fulfill their vision of their dream home.
What does this mean for me as a seller?
If you’re planning to sell your home in 2022, you need to be aware of what the market is looking for.
If you’re selling a home that needs substantial work, you’re not competing for the same buyers as someone who’s listing a multimillion-dollar luxury property. As luxury gets more popular, though, even your first-time home buyer will be looking for some upscale finishes and special amenities. Since the market is moderating slightly, buyers can be a little choosier than they could last year—though it’s still a seller’s market.
Making necessary repairs to your home before listing may not be enough; you may also need to consider some luxury upgrades to be truly competitive. Just be aware: many upgrades do not have a great return on investment. Figuring out which repairs and upgrades are worth it is a delicate balancing act. For this reason, selling a distressed house in this market can be a challenge. If you’re looking to save time and effort, there’s a better option.
Work with MarketPro
We’ll give you a fast cash offer for your current home just as it is now; no repairs, no luxury upgrades, no inspection, no commissions or fees. You can even choose your exact closing date to coordinate perfectly with the purchase of your new home. Our team will walk you through your quote, including a review of what your home would likely bring on the open market.
If you’re in Washington, D.C., Maryland, Virginia, or Pennsylvania, we’d love to show you how easy and stress-free the sales process can be. Contact us today for a same-day, no-pressure quote.