Trends in U.S. luxury real estate

In partnership with

-

New here? Join the newsletter (it's free).

 American Household Incomes Return to Pre-Pandemic Gains link

• Real median household income in 2023 was $80,610, marking a 4% increase from the previous year. This is the first significant annual increase in real median household income since 2019, indicating a rebound to pre-pandemic levels.

• Income changes varied by race and geography, with the Midwest seeing the largest increase at 6.6% to $81,020. Non-Hispanic white households had the largest income increase (5.7%), while Asian households experienced a slight decline (-0.2%).

• Gender income disparity widened, as the female-to-male earnings ratio fell to 82.7%. This represents the first statistically significant annual decrease in this ratio since 2003, suggesting that women have been disproportionately affected in the workforce recovery.

Trends in U.S. luxury real estate link

• Luxury retail in the U.S. grew by 8.6% annually from 2020 to 2023, reaching $75 billion in 2023. However, the U.S. market share dropped by 4% in 2023 due to cooling demand from inflation.

• Nearly 50% of new luxury stores opened in malls, with Class A malls having a vacancy rate of just 5.8%. High-end brands prefer physical stores in prime locations like Madison Avenue and Rodeo Drive, as e-commerce is less profitable due to costly returns.

• Retailers are expanding into secondary markets like Texas and North Carolina to reduce costs and focus on profitability. Despite slowed growth, luxury retail is projected to surpass $82 billion by 2028, normalizing at a 1.9% annual growth rate.

54% of baby boomers say they’ll never sell their homes link

• Over half of baby boomers plan to stay in their homes for the rest of their lives, with 54% indicating no intention to sell. The main reasons include homes fitting their lifestyle needs, a desire to age in place, and the financial benefits of fully paid-off mortgages.

• 40% of boomers wish to pass their homes on as an inheritance, indicating a reluctance to put these properties on the market. Emotional attachment and community ties also play a significant role in their decision.

• Financial concerns persist, with 90% worried about growing homeownership costs as they age. Rising maintenance expenses and property taxes are primary concerns, although only 25% cite affordability as a barrier to moving.

The fall housing market could see hotter competition, Zillow says link

• Mortgage rates have declined, with the median monthly mortgage payment in August dropping by over $100 since May, now averaging $1,827. This decrease is coupled with rising inventory, giving buyers more opportunities in an unusual fall market.

• National inventory increased by 22% year-over-year in August, though still 31% lower than pre-pandemic levels. More than one-third of homes are selling for over the asking price, indicating ongoing competition in desirable areas.

• Homes are selling faster, taking an average of 20 days to go under contract in August compared to 26 days in August 2019. Buyers can expect more choices and potentially lower prices in late September and early October.

Census Bureau Says Almost Half of Renters Are Cost-Burdened link

• In 2023, nearly half (49.7%) of the 42.5 million renter households were cost-burdened, spending at least 30% of their income on rent. This issue has persisted despite a slowdown in rent growth, with rental costs continuing to rise.

• The real median gross cost of renting increased by 3.8% in 2023, marking the largest annual rent hike since at least 2011. Median rental costs grew from $1,354 to $1,406 after adjusting for inflation, indicating a growing financial strain on renters.

• Cost-burden varied by race, with 56.2% of Black households and 53.2% of Hispanic households being affected. Only six states, including Illinois and New York, saw declines in the share of renters' incomes going towards rent, while states like Arizona and Florida experienced increases.

UK leads resurgence in European office investment link

• The UK accounted for 29% of European office transactions in the first half of 2024, totaling 4.1 billion euros, which is a significant increase from its five-year average. This resurgence was helped by factors like the conclusion of the July general election and the Bank of England's rate cuts.

• Higher office yields in London, averaging above 6%, are attracting investors compared to other cities like Paris and Berlin, which offer yields around 4.5%. The increased liquidity is expected to spread to other European markets as interest rates continue to fall.

• Demand is high for Grade A green buildings, accounting for 77% of London's office leasing activity in Q2. These properties often lease up while still being developed, driving investment toward greener developments amid new energy efficiency requirements.

Investor sentiment trends. A whopping 55% of investors will do this in 2025.

This Area Is Leading the Country in Office Revival

New American Dream…

Multifamily REITs Trends

Mapped: The Purchasing Power of $100 in Each U.S. State

I approve!

(This part of the US is just beautiful)

Link to the listing

That's all folks. Let me know what you think of the email. Quite a lot went into it. If these emails aren't for you anymore, you can unsubscribe here.

Cheers,

Vidit

Linkedin | Instagram

P.S - Read past newsletters here