If there was one takeaway from 2023, it’s that the luxury housing market was thriving at the end of the year. Looking ahead, limited inventory remains in high demand even amid rising interest rates, which deep-pocketed buyers have accepted as the new norm. What has changed, though, is the type of property high-end shoppers are looking for as more listings enter the scene.
According to a new Luxury Outlook Report from Sotheby’s International Realty, sustainability has become an increasingly important touchpoint for developers as more homebuyers prioritize eco-conscious residences that help reduce their carbon footprint.
“People are making decisions with a focus on the future related to what’s best for the environment,” said Onie Bolduc, head of sales at Wohali and associate broker with Summit Sotheby’s International Realty in Park City, Utah. As a result, features such as solar panels, ground-source heat pump geothermal systems, energy-efficient appliances, and garages with electric-vehicle charging stations are now sought-after amenities that can bring benefits to homeowners like tax credits and cost savings.
At the same time, the luxury hotel industry is expected to play a growing role in home buying behavior as five-star branded residences continue to make an impact on the real estate market. In terms of design, the report highlighted a demand for private homes with spacious suites, in-room kitchenettes, cocktail bars, and spa-like perks including wellness rooms, plunge pools, and infrared saunas.
“There’s a focus on elevated amenities and hospitality experiences baked into private homes,” added Jim Tinson, AIA and CEO at Hart Howerton. “Every client right now is looking for a morning kitchen or wet bar in their [primary bedroom] suite as well as guest rooms. They want the kind of hospitality experience they would get at a hotel delivered to their home.” He added that family entertainment destinations that offer a game room, pool table, bowling alley, or golf simulator are also at the top of the list.
Looking ahead, Philip A. White Jr., president and CEO of Sotheby’s International Realty, is optimistic about what 2024 has in store for the luxury sector as a whole. “The story of 2023 was about the post-pandemic real estate market adjusting to slightly higher inventory levels and ever-increasing interest rates—a bit of a market reset. The demand was there if the frenzy wasn’t. We may not be seeing as many bidding wars, but standout properties in desirable areas still tend to sell, and at a premium, too.”
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