Over the past few years, a variety of analysts have trumpeted the end of luxury real estate. Built primarily by Baby Boomers during their prime earning years, many luxury homes and communities experienced a loss in value as those same Boomers retired and downsized and Millennial buyers chose to maintain smaller, in-town homes.
Now, however, luxury real estate appears poised for a massive uptick in interest. But why is this a great time for luxury homes and how has COVID-19 contributed to the changing perception of this niche market?
Additional Interior Space
While work from home spawned a thousand memes, it has now taken on new credibility as companies from the tech sector and beyond embrace WFH policies permanently. At the same time, school systems, colleges, and universities are struggling with decisions around Fall 2020, including whether to go online-only or develop a combination plan with alternating in-school and online classes.
That means the search is on for families who now require multiple home offices plus plenty of space for the kids to conduct their Zoom classes, projects, and online activities. In addition, everyone may be feeling more fractious, with the need for room to spread out when tempers flare. That means homes with a larger footprint—and maybe even a move away from the beloved open-concept floorplan into layouts that offer more privacy.
Additional Exterior Space
With clubs, camps, country clubs, and recreational facilities closed, luxury homes with larger lots and more extensive outdoor spaces are the new must-haves. Socially distanced entertaining becomes possible with outdoor kitchens and dining spaces. Playtime for homeschooled children is easier with larger backyards and playspaces.
In addition, many luxury homes are located in luxury communities with expansive greenspaces and outdoor facilities. Gated communities mean less through-traffic and more safety for bike rides. Walking paths mean more space for leisurely family strolls in the afternoon or after dinner. Resort-style communities and those built around golf courses provide plenty of space to get out and wander more safely and easily.
Upgraded Recreational Features
Similarly, as the outlet provided by school and community sports goes away, many families are looking for ways to get their children out of the house and build activity into every day. Larger lots allow for play equipment and room for outdoor activities. High-end play features like in-ground trampolines and backyard or indoor basketball courts offer even more options.
Of course, many luxury homes feature lavish pool areas, tennis courts, and other recreational facilities. When vacations aren’t possible, these upscale elements can provide resort-style amenities to create the ultimate staycation. Although bowling alleys and golf courses have been named essential services in some areas, why go anywhere else when there’s a bowling alley and putting green at home? Why go to the gym when there’s a fully furnished fitness center—with a killer view—onsite? Add in spa services, like an in-home sauna and whirlpool tub, for even more luxe living.
Upgraded Fixtures and Finishes
Your favorite coffee shop may not be open or may be offering drive-thru only. An Italian espresso maker can make your mornings a little brighter. Your favorite restaurant may be operating at half capacity. Who needs a reservation when you have a gourmet kitchen and wine cellar? Can’t have a movie night with the family? Of course you can—in your luxury media room.
While we may think of luxury amenities as over-the-top personal preferences, they start to make more sense in a time of extended stay-at-home orders and quarantines. Upgraded spaces, appliances, and surfaces offer additional options that make everyday meals and activities more special. Keeping the family happy and entertained isn’t just a luxury, it’s a necessity during times of stress and frustration. Luxury spaces and home features can make it easier than ever.
Healthier Building Materials
Because they are often newer and built to modern standards, many luxury homes make use of higher quality building materials including those that facilitate healthier air quality and sustainability. LEED-certified luxury homes are healthier still, with benchmark design, construction, and operational standards that are better for your family and the environment.
In addition, upgraded luxury homes often come with more up-to-date and energy efficient systems and appliances. Everything from carpeting to flooring to paint in a luxury property may have a lower chemical load and contribute to a healthier home and lifestyle.
Talking to Your Real Estate Professional About Luxury Homes
If you’re considering a luxury property, here are a few things to ask your agent:
How do you properly evaluate a luxury property?
Luxury properties may be highly unique, with one-of-a-kind features and upscale finishes that make it hard to apply a comp-based valuation. Ask your real estate agent to walk you through the process of evaluating your offer to ensure that you are competitive without overpaying.
What will convey?
Many luxury homes boast custom-made elements that enhance the look of the home. These may include commissioned artwork, specially designed furniture, or unique lighting fixtures. If there’s something you love, ask if it can be included in your offer.
What is the home’s history?
Luxury homes may have a unique background that makes them highly desirable, including land or buildings of historical importance or a celebrated former owner. Take this into consideration when preparing your offer and determine what restrictions might govern your use or improvement of the home.
Who is the builder or architect?
Similarly, a well-known and well-regarded architect can add value to a home and make it more desirable and important. At the same time, it can mean that alterations or additions to the home would diminish the home’s value upon resale.
How have values held up in the neighborhood?
A well-established luxury, resort, or country club community may continue to be in-demand generation after generation. However, not all luxury communities are created equal. Find out the trendline for home values in your chosen neighborhood, and let your real estate professional help you evaluate its future potential.