Lucrative News for Luxury Agents: High-End Buyers Are Spending Big
Today’s luxury market is prime real estate, and with high-end buyers newly tripping over themselves to make the most of their spaces, there are plenty of clients to go around. Whether you’re interested in entering this lucrative niche yourself or you’re simply soaking up triple-digit increases in home sales, you won’t want to ignore this market.
Today’s Luxury Real Estate Market
While real estate as a whole has emerged as a decided winner amid the global COVID-19 pandemic, luxury real estate in particular saw a sizable boom. In fact, luxury home sales, defined here as those priced at or above $975,000, increased nearly 42% year-over-year in the first quarter of 2021 alone. That figure practically dwarfs all other home types, most notably the modest 7% increase in sales of affordable homes, or those priced around $184,000.
What’s more, all of the nation’s 49 largest metropolitan areas saw sizable upticks in luxury home sales in early 2021.
The Greatest Luxury Home Sales Year-Over-Year Growth
- Miami, FL: 101%
- San Jose, CA: 92%
- Oakland, CA: 82%
- Sacramento, CA: 79%
- Las Vegas, NV: 73%
As wealthy buyers newly working from home sought to make the most of their spaces, outdoor-oriented communities including Colorado, Idaho, and Utah saw significant inbound migration as well. Of course, those new residents have included hordes of luxury buyers.
Wes Stewart of Mile High Luxury is a Denver-area real estate veteran with expertise in high-end properties and agent success. Stewart reported incredible growth throughout the pandemic, in an already-hot market, no less.
“The luxury market [in Denver] saw one of its best boosts during the pandemic,” said Stewart. “The greater Denver metro area saw an overall growth since about May of last year… [and] saw strong growth from buyers relocating from out-of-state, especially in the luxury market.”
Nancy Tallman is a long-time luxury Broker Owner in Park City, Utah, and she shares Stewart’s sentiments.
“In Park City, [the luxury market] has completely exploded,” Tallman said. “We have people moving here from all over the country, [including] from areas that are actually more expensive than Park City… They’re coming here with pockets full of cash and feeling like [Park City] is a good value. They’re ready to make a lifestyle change.”
Stewart agrees, emphasizing that much of this growth and migration is due to work-from-home allowances and a new emphasis on the functionality of home and community.
“So many companies gave their employees the ability and permission to work from home full time,” said Stewart. “So, we saw a lot of people saying, ‘I’m going to get out of the city and go somewhere like Denver and get a house, a yard, and my own space.’ When you look at what a 1,000-sq.-ft. condo in New York City, Chicago, or San Francisco costs, you can come out [to Denver] and get a 2,500-sq.-ft. house for two-thirds of what they were paying in rent.”
With 40% of Americans hoping to continue working entirely remotely and 35% interested in a hybrid schedule, if companies give in to demand, this luxury boom could well continue, indicating further opportunities for agents across the nation.
Tap Into the Lucrative Luxury Real Estate Niche
So, how can hungry agents looking to make their mark on the luxury real estate industry take advantage of this uptick? First, you’ll want to hone your market niche and review our comprehensive luxury podcast episode:
Next, you’ll want to take some notes from the pros. Stewart and Tallman both recommend sharpening your skills as these high-end, luxury buyers are largely unlike most.
“[Luxury real estate] is very different from working with someone like a first-time buyer, who wants you to coach them every step of the way,” said Tallman. “[Luxury clients] will ask for your expert guidance when they need it, but for a lot of things, they will just trust their own instincts. You have to respect that and not let your ego get in the way.”
Stewart agrees and also encourages agents to trust themselves while navigating these hefty transactions.
“Patience is certainly a [valuable] trait,” said Stewart. “Higher-dollar clientele don’t move nearly as fast as people who are purchasing or selling at lower price points. One of the most important things is belief in yourself. You really have to believe that you are capable of working with someone who has needs that you may not be accustomed to.”
To find and best serve this kind of client, your hard skills must be up to date, too. Comprehensive CE or even upgrading your license could differentiate you from the pack and set you up for success. After you hit the books, you’ll want to continue strengthening your sphere of influence.
In other words, strategic networking is critical in this niche.
“It’s important to talk to and learn from agents who work in the luxury sphere,” said Stewart. “One of the biggest mistakes that a lot of agents make is not picking up the phone. Call another agent and ask questions. I would say more than half of the agents out there would take 5-10 minutes to talk with you, answer your questions, and give you a little bit of their life and career experience.”
Finally, add some luxury-oriented accolades to your resume. High-end buyers expect world-class knowledge and expertise, so you’ll want to deliver. The National Association of REALTORS®, Institute for Luxury Home Marketing, and many local associations offer designations that demonstrate your commitment to excellence in the luxury scene.
If you’re looking for additional information or advice, you can connect with and learn more from these two industry thought leaders. Find Wes Stewart on Facebook or Instagram, and Nancy Tallman on LinkedIn or Instagram.
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