The luxury real estate buying boom that began in 2020 escalated in 2021 and will continue in the new year. Insatiable demand depleted inventory across the U.S. and put upward pressure on prices. Driving the real estate surge was a combination of factors that include shifting consumer values caused by the pandemic and historic wealth growth due to cryptocurrency gains and soaring stock markets. As people searched for safe places to put their wealth and re-envisioned “home” as multi-functional spaces for work, play and sanctuary, they sought out bigger and better living environments.
A 2021 report states an estimated 71% of individuals with a net worth of more than $5 million now own properties in the $1 million to $5 million range. Luxury sales surpass 2020 and an unprecedented demand has depleted inventory and put upward pressure on home prices in the top 10% of the market. The Realtor.com Top Housing Markets of 2022 report lists Metro Phoenix at No. 19 of the cities that will lead the nation in 2022 when it comes to listing price appreciation and home sales growth.
The mass migrations of the last few years will continue in 2022. Buyers were making moves to small and mid-sized cities with more affordable home prices and reasonable commuting distances to major employment centers. The Phoenix metro area sees scores of buyers from across the country relocating to the Valley of the Sun due to the booming economy, robust culinary and arts scene, award-winning golf courses and vast job opportunities.
Low inventory continues to constrict the top 10% of the market. In September 2021, there were 36% more luxury homes sold than new inventory entering the market. Inventory is and likely will remain a challenge for some time as shortages in labor and materials, as well as general supply chain challenges, delay new construction. As the market begins to rebalance and buyers who were sitting on the fence decide to get in the game, the value of a skilled, full-time real estate professional will be even more evident. Into 2022, it will remain important for serious homebuyers to be ready to act quickly and be prepared with a pre-qualification and pre-approval for a mortgage loan. A strong partnership with a top selling real estate agent will better prepare buyers for landing their dream home.
What will 2022 bring? Inflation, mortgage rates and construction supply constraints are all economic factors to watch. Arizona real estate will remain a top market in the country and agents with their finger on the pulse of trends and new technology will be in the lead to guide clients through the home-buying process effectively.
Greg Remmers is president of RETSY, technology-based real estate brokerage comprised of agents with more than 300 years of combined experience and more than US $3.5 billion in sales. After breaking ground in October 2020, RETSY secured more than US $500 million in closed and pending sales, solidifying the brokerage as one of the fastest growing in Arizona. RETSY was recently named the exclusive brand affiliate for Forbes in Arizona after joining Forbes Global Properties. This partnership will expose luxury Arizona real estate to millions of viewers worldwide.