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After three years of unprecedented ups and downs, many luxury real estate agents can hardly remember what “normal” looks like. There have been lockdowns, supply chain challenges, rising inflation and other issues affecting the markets. However, through it all, top agents have adjusted their business and outlook accordingly, and luxury homes have continued to sell.
Now the question on everyone’s mind is: What does the future hold for 2023? That’s the topic that Brad Nelson, Chief Marketing Officer for Sotheby’s International Realty, will explore on January 26 at the Sotheby’s International Realty Insider Open webinar, where top agents will explore market trends, data and opportunities for the year.
Everyone is welcome and invited to register before the webinar, here are insights from the featured experts.
In 2023, what types of luxury homes or markets are likely to be in demand?
Michael Martinez: My team and I have already seen and experienced what it’s like to bring the online and offline worlds together through the metaverse. Some forecasters predict that the market could soon exceed $1 billion based on the current growth rate.
Delita Giorgolo Spinola: We’re seeing some new luxury regions aside from Tuscany, the big cities – Rome, Milan and Florence – and Lake Como. Lake Como was with English buyers (in Italy) because of George Clooney and Villa d’Este. Now people want to be in places that are just as beautiful and maybe even less expensive. We’ve seen a really strong return of high net worth American buyers on the island of Capri.
How does this compare to the United States? Are similar trends emerging on this side of the Atlantic, with vacation markets like the Hamptons and Aspen in high demand?
Dana Trotter: The market is still very competitive because inventory is still at historic lows. But we expect the market to stabilize as more listings come online. While there will be turnover, many owners will keep because they want to use an asset in the Hamptons regardless of fluctuations in rental rates.
Chris Kluge: If its price is in the right range, and it is private property, it will still move.
DT: There is only one chance at first impression when launching a property, and it helps that they are competitively priced.
From a global economic perspective, 2022 was not an easy year. Are there specific challenges that you expect to continue into 2023?
CK: There are many macro challenges – Ukraine, interest rates and inflation affect it.
millimeter: today’s metaverse may be more complex, but it’s still unstructured – and, in fact, its continuity isn’t necessarily deterministic. Phishing and other types of data theft remain a legitimate concern, and I would never advise my clients to purchase virtual property without also warning them to seek professional advice from their lawyers and financial advisors.
DGS: The importance of clean air has returned to everyone’s interest. Small villages surrounded by nature, local markets selling local products and a slow routine are now a lifestyle choice for many citizens. There is a great need to spend quality time in touch with nature, and live authentic experiences.
Looking at 2023 through the long lens
Markets can be volatile, but it is possible to analyze trends and make fruitful future predictions. Spinola’s story provides good evidence of this.
Throughout 2022, I tracked clients getting pulled away from the iconic cities of Rome, Milan, and Florence. But instead of flocking to the ever-popular Tuscany, they’re re-evaluating the unique beauty of Umbria; Instead of the widely revered Lake Como, they appreciate the more expansive views of Lake Maggiore. Many markets are going through subtle but obvious shifts, and agents need to recognize them while they are still emerging.
As buyers continue to look to buy properties in the prized second home markets, it’s just like Trotter said – inventory is still low. In an area like the Hamptons, homeowners may delay selling because they are reluctant to part with such a desirable and valuable asset, and sellers with rare properties may auction their homes in high-profile bidding wars rather than opting for more traditional sales.
Meanwhile, there is the challenge of inflation, and the constant raising of interest rates by central banks in order to tame it, Kluge noted. In 2023, this will be one of the issues that will be top of mind for buyers, sellers, and agents alike.
Sotheby’s International Realty Insider webinar takes place Thursday, January 26, at 1:00 PM ET. This is a palette you don’t want to miss! Make sure to register in advance; This is an open webinar open to all agents.
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