The Agency’s founder & CEO Mauricio Umansky talks luxury real estate moving into 2021. Umansky founded the luxury brokerage firm in 2011 as an “industry disruptor” with one small Beverly Hills office. Fast forward to today—The Agency has global brand status with over 700 agents in 36 corporate-owned and franchise locations throughout the United States, Canada, Mexico, and the Caribbean.
The Agency’s latest Annual Report: The Red Paper 2020 took a deep dive into 16 U.S. and 6 international markets with Agency locations.
Here are a few highlights from The Agency’s Red Paper:
Pent-Up Demand and Limited Inventory: Markets that saw a slow to steady pace of absorption pre-COVID, experienced extreme demands for inventory. For instance, in Park City and Aspen, properties such as lots and pre-construction homes, which typically spent months on the market before the right buyer came along, sold for handsome sums to buyers looking to custom build or live a little way outside of town.
Lifestyle-Driven Real Estate Transactions: A wave of lifestyle-driven real estate purchases began across the country in the spring. Scores of newly minted remote employees fundamentally moved markets—an impact that will be felt for years to come. The movement among buyers seeking a bigger backyard or more room to roam has caused a tectonic shift in inventory levels and pricing across the board.
A Mass Movement to Purchase in Second-Home Markets: In high-end, second-home markets, buyers sought to live where they vacation. In Turks and Caicos, the minute the travel ban was lifted, travelers took to the skies to buy a little piece of island paradise. One hour from Cabo, the quaint Mexican beachside town of Todos Santos welcomed those seeking experiences off the beaten path as pending sales surpassed the US $1M benchmark. The same can be said for Mexico’s popular resort destinations including Los Cabos, Todos Santos, La Paz, Riviera Maya, Puerto Vallarta, and Punta de Mita.
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Umansky knows the luxury market as well as anybody. He consistently ranks among the country’s top agents by the Wall Street Journal’s REAL Trends. I recently did a Q&A with Umansky on The Red Paper’s findings.
EP: Takeaways for buyers?
MU: In 2021, buyers in most markets will continue to seek more room and outdoor space as the work from home model is being fully adopted by many major employers. We will see more people make major lifestyle decisions – moving throughout the country and even abroad for an enhanced lifestyle, yet they will face tight inventory and hot competition for premium and well-priced properties. The increased activity in most of the markets around the world saw prices rise and inventory becoming limited.
If I were to provide advice for buyers in 2021, it would be to think with your head as much as your heart. As most well-priced homes are receiving multiple offers, know what your budget allows and what your maximum is without overextending. While inventory will be tight, there will be many people who waited to list their homes that will come to market. The perfect home is out there, you will just need to really do your homework, trust your real estate agent in guiding you in the process, and have patience.
EP: Takeaways for sellers?
Across the board we are seeing very low levels of inventory paired with an increased demand. This means prices will rise as a result. Later in the year, we anticipate local and national buyers to be joined by more international buyers, who will be able to move more freely as the vaccine rolls out and travel restrictions ease. Again, creating an even bigger demand in most markets.
We also expect to see the demand for top-dollar rentals for the summer, fall and holiday season soar as they did in 2020. In some cases, brokers took a “name your price” approach for their clients, with properties renting for never-before-seen prices each month.
If I were to provide any advice to sellers in this market, I would say to be mindful with your pricing as we are still seeing homes that are not well-priced stay on the market. Buyers are really doing their homework and while they are willing to up their bids for homes they truly want, they are unwilling to overpay if the value is not there.
In 2021, expect video content to remain king as buyers continue searching the world over for properties.