When most people think of luxury real estate, they often envision palatial mansions on large spreads of land. But for those with the ability to buy luxury, size doesn’t always matter. For them, location is far more important.
For instance, property right on the beach or next to a ski lift is appealing to some. For others, a condo downtown is the priority. In fact, the latter is rapidly becoming a bigger target for the affluent. So much so that many real estate agents consider this market to be akin to buried treasure.
Everyone wants to be an urbanite
Many large cities have seen a resurgence in recent years. The downtown locales are no longer rundown. These cities have rejuvenated their core areas, making them a hot spot for luxury investors.
The age demographic of these urban centers is changing fast, too. It used to be composed of individuals with younger money and a focus on business. Today, the money is much older, and the focus is on convenience.
People want to have the ability to walk to the store, stroll down to their favorite restaurants and take a quick jaunt over to the local theater. It’s even more important that cultural events surround them. Symphonies, art galleries and concert venues all add to the allure of downtown living.
As baby boomers become empty nesters, they’re not wanting to maintain huge mansions and the grounds that go with a massive estate. Instead, they prefer quality of life. They want to be able to enjoy their newfound freedom.
The definition of ‘luxury’
Although recent inquiries into luxury cash buyers in Miami and New York City have likely had a stagnating effect on luxury sales, an anecdote from 2013 might illustrate how important location is to the right buyer.
In Miami, the luxury market has been soaring in recent years because of the increased demand. Take Ohio coal-mining businessman Wayne Boich Jr., who sold his penthouse condo on Icon South Beach for just under $21 million a few years ago. That was $2 million above the listing price. A bidding war pushed the cost up to a level three times the amount he paid for the condo in 2007.
Boich isn’t the only who has enjoyed a resurgent luxury market in condos and townhomes. Martha Brannigan of the Miami Herald wrote about the trend in early 2013: “Ultra-luxury condominiums on South Beach are fetching nosebleed prices … A penthouse at the Setai Resort at 2001 Collins Avenue closed for $27 million — the highest price ever for a South Florida condominium, according to real estate agents.”
In-town selling offers more real estate within a smaller footprint, so agents don’t have to cover as much territory.
If you’re looking to break into luxury real estate, don’t ignore one of the hottest trends. Look for condos and townhomes that offer convenience and access to the lifestyle people love.
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Kevin M. Leonard is the founder of Luxury Agent and Valore Group. You can follow him on Twitter or LinkedIn.