Sotheby's International Realty Releases 2023 Luxury Outlook | Maine Real Estate Blog

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We are pleased to introduce the Sotheby’s International Realty 2023 Luxury Outlook report, which outlines the industry trends and happenings across high-end residential markets around the world. In 2022, we saw mortgage rates soar after two years of historic lows, fueling a “lock-in” effect that strained an already tight market as homeowners continued to spend more time at home than ever before. In this report, we highlight the trends that you can expect in the year ahead, from the projected flow of global wealth into the real estate market to luxury real estate in the metaverse. Through the 2023 Luxury Outlook report, our goal is to help you navigate this fast-moving and ever-changing real estate market. We hope that this compilation of research and industry perspectives, exclusively presented by Sotheby’s International Realty, helps you as you look to invest your equity wisely in the year ahead. Articles of Interest from the Report: Strong Appeal for Luxury Property, Despite Interest-Rate Hikes With Inventory Increases, Markets Begin to Turn–Slightly–in Buyer’s Favor What Lies Ahead: Lessons from Past Market Corrections For Passing Wealth Between Generations, Property is Still King High-End Vacation-Rental Spots Face Changing Market Post-Covid Highs and Lows: Luxury Rental Markets React to Return-to-Cities Most US Markets that Grew During Pandemic are Still Strong–if Slightly Muted Naturehoods: The Great Outdoors is a Top Commodity How to Sell a High-End Home During Any Type of Market Supply-Chain Issues Ease, Yet Prices Remain High Eco-Focus Drives Luxury Market 2022 Record Breakers Anatomy of an Of-the-Moment Home See below for the Welcome Letter from A. Bradley Nelson, Chief Marketing Officer of Sotheby’s International Realty, and read the full report here. Welcome to the Sotheby’s International Realty 2023 Luxury Outlook. We hope this report helps you navigate this fast-moving and ever-changing real estate market. While conventional wisdom about supply and demand and interest-rate fluctuation would suggest luxury home prices should be falling, we simply did not see that in 2022. Prices, for the most part, remained steady in 2022. We believe the reasons for prices staying strong are multifold—first, the world’s seen a surge of wealth creation in recent years and the affluent still have more money to spend; second, many luxury purchases are made in cash, so the high-end sector remains somewhat insulated from interest-rate fluctuations. Finally, there’s a lifestyle change resulting from Covid-19 that we believe is here to stay: people are spending more of their time at home and putting more of an emphasis on their home lives, even as the world has opened up. What that means is luxury homeowners can rationalize the expenses of owning multiple properties since they are spending more time in them, and are therefore less likely to put them up for sale. As such, inventory continues to be low coupled with an undersupply of new construction. Fannie Mae’s November 2022 forecast predicted that home sales will decline but begin to rebound in 2024. Fannie Mae economists also believe mortgage rates will steadily fall, but likely not drop below 6% any time soon. Despite this, luxury agents remain busy brokering deals for their clients, many of whom are looking to make opportunistic investments during a fluctuating market. In the pages that follow, we’ll also look beyond the real estate sector, to see what consumers of luxury goods desire, from sustainable luxury items, to record-breaking auction sales, to wine investments. Now more than ever, we know that the affluent want to spend their equity wisely, and we’re here to help them do just that.