Luxury forecast: What lies ahead for high-net-worth buyers in 2024

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The increased use of artificial intelligence and a movement toward “quiet luxury” are key trends that will continue to infiltrate upper-tier housing in 2024, according to an Intel analysis of luxury market forecasts.

The advent of ChatGPT and other high-tech language tools over the past year-plus have unleashed new expectations for the power of technology. Some already claim that the burgeoning tech is poised to shake up the current state of affairs as much as the internet once did, Coldwell Banker Global Luxury program’s “The Trend Report” noted. But real estate brokerages have the opportunity now to learn to wield it early and master it to make their lives easier.

Amidst increased stability in the U.S. economy, recovery in Europe and an influx of Asian funds in high-end global markets, luxury real estate is poised for a strong year, Christie’s International Real Estate’s 2024 Global Luxury Real Estate Forecast reported. Alongside trends like a rise in upscale college towns and the arrival of the Gen Z homebuyer, increased demand for “quiet luxury” is something agents will contend with as the year progresses, Christie’s International Real Estate said.

Both firms’ reports show growing optimism for the luxury market in the next year.

“What really stood out is the level of optimism that we saw heading into the market right now,” Michael Altneu, vice president of Coldwell Banker Global Luxury, told Intel.

“We did a global luxury consumer survey and more consumers believe that the market will be better or the same than worse [in 2024]. And we’re also seeing that with the data points. So I think the best market we can have is the optimism for the current year ahead, as well as the data that continues to support the optimism — and then obviously having the consumer survey which, sharing what we’re seeing in terms of data, is a really exciting touch point.”

The AI revolution

For The Trend Report, Coldwell Banker posed the question to ChatGPT of how generative AI might change the future of real estate. The chatbot came up with the following list of areas ripe for improvement: customer support, market analysis, virtual property tours, automated document processing, personalized property recommendations, language translation and predictive analytics.

“A lot of agents are definitely embracing the technology,” Altneu said in a statement. “They are embracing the ease and how they’re able to incorporate it into their business. But I think at the end of the day, the larger picture that we realize is that human connection matters most, and that it can’t replace that interaction, specifically on the luxury side. Where I do think AI will become incredible is aiding in the relationships between an agent and a seller or an agent and a buyer and perhaps simplifying processes, allowing for additional data points to be relevant to the consumer, perhaps aiding in searches. So I do think we’ll see more informed consumers.”

With the potential for more accurate property valuations, personalized marketing and predictive analytics through AI, homesellers stand to benefit from AI tools in coming years that may help them time the market better for a sale or find just the right marketing strategy, Coldwell Banker Global Luxury’s report noted.

Mala Sander of The Corcoran Group told Intel she’s grown accustomed to turning to ChatGPT for brainstorming ideas on everything from dinner party menus to listing descriptions.

“It’s so interesting — it’s like Google, only better,” Sander said. “Sometimes you sit there and you stare at your screen and you have writer’s block when it comes to talking about a particular property and its benefits, and you just want to word it eloquently. You can [tell ChatGPT], I have this property and I want to highlight these five or 10 or however many features of the property, write me a description. Of course you never just take that description and plop it into your database, but what you can do then is you can tweak it further and take it to another level.”

If Sander is creating social media posts that she wants to cater to a particular demographic, like millennials or hedge-funders, she’ll also add that into her ChatGPT prompt and see what the tool comes up with.

Additionally, using augmented reality to show a home’s potential through virtual property tours or enhanced listing photos may help homebuyers see a property through a new light.

Of course, there are also kinks to work out with any new technology, and learning how to use AI in a respectful, responsible way is something that agents will also need to learn how to do, Coldwell Banker’s report noted.

Camila Lincowksi of Platinum Real Estate Professionals in Las Vegas told Intel that she’s already encountered some hiccups when it turns out that a listing has used enhanced photos, but not clearly disclosed that the photos are not of the property as-is.

“Obviously, [agents] want people to get into their listings and they are using AI-generated photos with the photos they already have of the home, so they’re kind of doing a bait-and-switch,” Lincowski said. “I’ve had clients where we go to the home, and it looks nothing like it did in the photos, which, I know some agents will change colors and stuff like that, but this is like a catfish of a home.”

Likewise, factors like data accuracy and privacy issues with the still-developing technology continue to be concerns that agents will need to take upon themselves to verify when using AI, The Trend Report said.

‘Quiet luxury’ enters center stage

The time of brandishing one’s wealth through extravagance has come to a close as high-net-worths increasingly gravitate toward a more subdued form of luxury, Christie’s International Real Estate’s 2024 luxury forecast reported. Enter the “quiet luxury” trend, whereby the wealthy, particularly in the U.S., are now aiming for something like understated elegance in all things luxury, from real estate to fashion.

Christie’s International Real Estate’s report called out a scene from the final season of HBO’s Succession as the quintessential example of quiet luxury in action. In one episode Tom Wambsgan rails Cousin Greg for his date’s use of a “ludicrously capacious” Burberry handbag at Logan Roy’s birthday party, which is clearly an “enormous faux pas” at such a gathering of the city’s elite, where quiet luxury (tailored styles with discrete or non-visible brand logos) is expected.

Translated to real estate, quiet luxury might mean more natural materials and muted tones in interior design, as well as less-sprawling estates. It is also exemplified through more private, exclusive estates and luxury residences.

Aaron Kirman of Christie’s International Real Estate AKG said that in Los Angeles, quiet luxury has caused buyers to gravitate toward organic materials and less flashy finishes, like honed instead of shiny marble, in addition to smaller footprints.

“Years ago, people of substantial wealth wanted 50,000-square-foot homes,” Kirman said in the firm’s report. “Now they are very comfortable living in 12,000 square feet.”

Sander of Corcoran said that the trend is emerging in the Hamptons as another way of embracing the region’s environment.

“We live out in the Hamptons and it’s a natural environment — we see sand and all of that,” Sander said. “I see people more interested in that organic [quality] in their surroundings, in their homes.”

She added that the trend is manifested by homeowners who want their landscaping to include more native plants, which are also better for the environment than installing a pristine, grass lawn. Hamptons homeowners are also employing the trend in finishes within the home that are more earthy and understated, like concrete or leathered marble.

Quiet luxury, while a somewhat new take on luxury living in the U.S. and UAE, is something that has always been more at the forefront in France’s culture and many other parts of Europe, from which Americans might draw inspiration, the report noted. David Bilder of David Bilder Christie’s International Real Estate said, for decades, people of France’s Atlantic coast seaside resorts have embraced the motto, “live happily, live hidden,” which embodies the spirit of quiet luxury.

Whether agents welcome 2024 by refining their use of ChatGPT or by helping clients find designers who know the value of understated luxury, all agents should be prepared for the luxury market to look a bit sunnier this year. Globally, across the Americas, Europe, the Middle East, Africa and the Asia Pacific, Christie’s International Real Estate affiliates expect a relief to inventory shortages while demand remains stable.

“A stable U.S. economy, early signs of recovery in Europe, and the influence of Asian funds in high-end property markets around the world are all positive signs for the global luxury real estate outlook in 2024,” Mike Golden, co-CEO of Christie’s International Real Estate, said in a statement.

“Amid that backdrop, a number of interesting demographic, lifestyle and locational trends are taking shape, and the purpose of [the 2024 Global Luxury Real Estate Forecast] report is to help luxury buyers and sellers spot and understand those trends so they can be confident participants in the market this year and beyond.”

Email Lillian Dickerson