They say luxury never goes out of style. Throughout the world, home buyers seem to be subscribing to that maxim as luxury properties have, once again, emerged as the hottest real estate market trend.
In mid-April, Christies International Real Estate released its second annual Luxury Real Estate Property Market report with some pretty fabulous findings. The study looked at the luxury market in 10 of the world’s major cities: Cote d’Azur, Hong Kong, London, Los Angeles, Miami, New York, Paris, San Francisco, Sydney and Toronto. Markets for these cities were compared with one another in categories such as sales price, prices per square foot, percentage of non-local and international buyers and the number of luxury listings per population.
Topping out the list was London with its top sale property of $101.5 million and the highest dollar per square foot average of $4,683. New York came in second with Los Angeles rounding out the top three. The luxury market in the U.S. seems to be flourishing as all three cities analyzed in the research exhibited significant growth from 2012 to 2013. While the luxury market in 2012 looked promising, 2013 was the year that it flourished in the U.S. with robust growth. In 2012 there were a total of 35,000 sales in the $1 million plus market, but in 2013 that value jumped up to an impressive 41,700 sales.
The luxury market in Los Angeles proved to be a particularly interesting point of research as it jumped from sixth place in 2012 to third place in 2013. Los Angeles also had the highest sale in the United States in 2013 with the purchase of a $74.5 million home.
Why the Uptick For Los Angeles, U.S. Markets Now?
With the housing market still in recovery mode, it is positive for the rest of the country that the luxury market has taken off in such a grand manner within the two years. Inventory throughout the country is still very low but lending companies have shifted rate policies and are gaining confidence in borrowers day by day. This has brought interest rates down for high-end mortgage rates to at or slightly below conventional mortgage rates.
With lower interest rates and boredom from the stale market following the tightening of the belt due to the recession, buyers are taking advantage of this opportunity and getting active in the market. Christies reported that three prominent buyer groups have made major moves on the luxury market in the last year. Those groups are local buyers at the lower end of the luxury market, buyers from the millennial age group and overseas buyers who have typically been buying at the very top end of the market.
With inventory still low and demand very high, prices in luxury markets like Los Angeles are on a continual upward trend. Just since the beginning of this year the median price for single family homes in Los Angeles jumped up almost $100,000, according to Altos Research, a California-based real estate analytics company.
As long as current trend continue, the jump in price shouldn’t be scaring away too many buyers and the luxury market can look forward to a continually prosperous future.
Are you looking to get into the luxury real estate market in Los Angeles? Please contact us, our team of luxury property experts would love to help you find your next home.
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(all data current as of 10/22/2017)
Listing information deemed reliable but not guaranteed. Read full disclaimer.