The luxury home market is seeing steady demand nationwide, according to a study released by Point2.
The Sotheby’s International Realty 2023 Luxury Outlook Report attributed the steady high-end sales to the explosion of personal wealth and homebuyers emphasizing their home lives post-COVID. And interest rate changes may not affect as many high-end transactions as many purchase their properties with cash.
Stephanie Biello with Sotheby’s International Realty in Pennsylvania and Maryland said, in their market luxury home prices are holding steady, with some falling a little and they’re spending a little longer on the market. Biello is also PAR’s District 1 vice president.
“Summer is a quieter season,” she said. “I’m getting calls from clients who want to know what’s going on in the market and buyers are not driven by high interest rates because many of these clients make their purchases with cash.”
Biello noted that homes in the $500,000 to $800,000 range are receiving multiple offers. “First-time homebuyers in this market are often being outbid by cash investors and in those situations, we’re seeing parents contributing to the down payment to help get them into a property,” she said.
She said some of the higher-end properties might see a more break-even sale, as opposed to escalating prices that are seen at lower price points.
“Rittenhouse used to have a waiting list to purchase and now we’re seeing movement in the upper end of the market slowing down,” Biello said. “Although I am seeing more properties coming onto the market, which is a good thing. Properties in the $1.5 to $3 million range aren’t moving quite as quickly as they were during the pandemic.”
She noted that the change in work habits has also affected the luxury market. “Many of my clients were commuting between New York City and Philadelphia, so it made sense for them to buy a smaller, luxury home so they didn’t have to stay in a hotel every time they traveled for work. Now they’re able to work remotely and no longer need that extra space.”
“The luxury market is reflective of the real estate market in general. Life changes, working remotely, needing less space – those all revolve around life events – and all of our lives have changed in the last several years,” she said.
The Philadelphia luxury market remains a great place to invest. “Philadelphia has beautiful inventory and has lots to offer with the arts, restaurants and things to do. It’s a great place to live,” she added.
David Onufer, who works in the luxury market for Howard Hanna Real Estate Services in the Pittsburgh market, said prices are generally up in the region. He is also the president-elect of the Realtors® Association of Metropolitan Pittsburgh.
“Homes in the $750,000 to $1.5 million price range seem to be moving quickly and selling at about 98% of the list price,” he said. “Once over the $1.5 million price point, homes are still moving but a little slower.”
He said a recent home sale in the Fox Chapel area for over $7 million, set a precedent for other homes coming onto the market.
He agreed that most of the luxury property buyers are paying cash for the homes and are looking at the house as an investment.
Features popular with luxury property buyers are well-appointed kitchens and bathrooms, better outdoor space and larger living spaces. “They’re looking for quality, high-end appliances and big open areas,” he added. “And location, location, location. Some are looking for office space, family space and gyms so they can do as much in their homes as possible.”
Onufer said clients looking for luxury properties are discerning. “They know what they want and it may take months to years to find the right place because there aren’t as many higher-end home choices available. I worked with a couple for nearly 18 months before finding them the perfect property.”