On The Outlook

Sotheby's International Realty has recently released their 2022 Luxury Outlook report, which identifies the trends likely to shape the world's prime housing markets in the year ahead. The comprehensive report offers insight into the high-end real estate industry as the starts-and-stops of the pandemic's reopening fueled even stronger demand and inventory struggled to keep pace.

The global report reveals that relief from the market frenzy may not happen quickly as prices are expected to rise in 2022. In addition, a shift to a hybrid work model is fueling more buyers to invest in real estate and seek larger homes that can accommodate remote work while remaining within commuting distance.

"Once again, Sotheby's International Realty remains a trusted resource for buyers and sellers looking to navigate the luxury real estate market," said Bradley Nelson, chief marketing officer for Sotheby's International Realty.

"It was important for us to offer our perspective on the trends ahead as luxury real estate remains a trusted investment amid relatively low interest rates and inflation. Now in its second year, the 2022 Luxury Outlook report offers expert insight following last year's frenzied housing market and what buyers can expect in the coming year as pent-up demand from international buyers is expected to increase."

The Sotheby's International Realty 2022 Luxury Outlook report was compiled by surveying Sotheby's International Realty agents around the world who transact in the $10 million+ price category. This information was complemented by gathering supporting data from other leading industry experts, including UBS Wealth Management; Henley & Partners, a global citizenship and residence advisory firm; the National Association of Realtors; in addition to art and luxury experts at Sotheby's, the famed auction house, to round out luxury trends in the year to come.

Key findings featured in the report:

• 2022 is likely to be the year of the international buyer as borders open and vaccinations and boosters roll out.
• Nearly half of respondents agree that a rise in interest rates might affect the market.
• In North America, millennials and Gen Xers are expected to make up the majority of luxury-home sales in the coming year.
• Between 2018-2042, nearly $70 trillion will be passed down from older generations and millennials will continue to use their share for real estate, according to Cerulli Associates.
• In the U.S., price appreciation of second homes is expected to continue even after the number of transactions slowed due to limited inventory.
• The most important amenities for today's luxury buyers are a garage with storage, first-floor full bathroom, eat-in kitchen, and deluxe primary bedroom suite.

"Following another historic year in real estate, Sotheby's International Realty agents around the world continue to have their finger on the pulse on industry trends and market acuity," said Philip White, president and chief executive officer of Sotheby's International Realty.