Hybrid work, crypto and inflation poised to stoke 2022 luxury market

Another strong year ahead for the sector: Sotheby’s

New York /
Jan.January 11, 2022 10:45 AM

A. Bradley Nelson, chief marketing officer, Sotheby’s International Realty (Sotheby’s International, iStock/Illustration by Steven Dilakian for The Real Deal)

Trends that have taken hold during the pandemic are poised to fuel another banner year for the global luxury housing market in 2022, according to a report from Sotheby’s International Realty.

The report is predicting a strong year for the sector. Bloomberg noted key factors behind the forecasted boom include still-low interest rates, inflation and hybrid working options available to many employees looking to grab more land.

“The real estate market is now being driven by hybrid work vs. remote work,” said Sotheby’s International Realty chief marketing officer Bradley Nelson.

The ability to work remotely could be advantageous to some in the luxury market who want to take advantage of markets without state income taxes, such as Florida and Texas. Conversely, international markets imposing increased taxes on luxury deals such as Ireland and Canada could suffer.

“You’re going to see the greatest investments continue to be in tax havens,” Nelson said to Bloomberg.

Another trend Sotheby’s is looking out for is increased transactions in cryptocurrency.

“If wealth creation drives a market, and crypto is driving wealth creation, then I think there’s going to be an increased demand for that kind of payment, as opposed to cash,” Nelson said, looking ahead to the next five years.

The report predicts other trends to continue into 2022 in the luxury space will include fading demand in the suburbs and higher prices in the exurbs, as well as a rebound in urban centers. Nelson said it was virtually impossible to underprice a home as demand and low supply would pull up competition, but the same isn’t necessarily true for overpricing a home.

“It’s certainly possible to overprice a property,” Nelson said. “But ultimately, with some of these ambitious asking prices, I think it’s a strategy of price discovery.”

In Manhattan, the luxury market kicked off 2022 with a strong start. The market saw 22 luxury contracts signed between Dec. 27 and Jan. 2, the highest volume to start the year since Olshan Realty’s luxury market report began in 2006.

[Bloomberg] — Holden Walter-Warner





    Related Articles

    arrow_forward_ios
    New York Ranger Jacob Trouba (Getty)
    Rangers’ star Jacob Trouba nets Tribeca condo for $6.7M
    Rangers’ star Jacob Trouba nets Tribeca condo for $6.7M
    Chrissy Teigen and John Legend with 374 Broome Street (Credit: Karwai Tang/Getty Images; Google Maps)
    John Legend and Chrissy Teigen selling penthouse apartments in Nolita
    John Legend and Chrissy Teigen selling penthouse apartments in Nolita
    Michael Fulfree and Bianca D’Alessio of Nest Seekers International (Nest Seekers)
    They can sell the Hamptons. But can they sell “Selling the Hamptons”?
    They can sell the Hamptons. But can they sell “Selling the Hamptons”?
    From left: Ryan Johnson and Jeff Berens, co-founders of Culdesac, in front of a rendering of Culdesac Tempe (Culdesac, iStock)
    Startup that wants to build car-free cities raises $30M Series A
    Startup that wants to build car-free cities raises $30M Series A
    Former WeWork CEO Adam Neumann (Getty Images, iStock, Yard 8 Miami, Stacks on Main, Trulia, Power Design Inc., Inkwell Decatur, Wikipedia, Illustration by Kevin Cifuentes for The Real Deal)
    Depreciation Man: Adam Neumann’s real estate binge to ease tax bill
    Depreciation Man: Adam Neumann’s real estate binge to ease tax bill
    Eviction problems hit NJ, NY after moratoriums lift
    Eviction problems hit NJ, NY after moratoriums lift
    Eviction problems hit NJ, NY after moratoriums lift
    (iStock/Illustration by Kevin Rebong for The Real Deal)
    Existing home sales hit 15-year high in 2021
    Existing home sales hit 15-year high in 2021
    Joseph Tsai, executive vice chairman, Alibaba (Getty Images, LoopNet, iStock)
    Office behind Joseph Tsai revealed as buyer in 220 Central Park South megadeal
    Office behind Joseph Tsai revealed as buyer in 220 Central Park South megadeal
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...