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
    422 E. 84th Street (Google)
    Uptown chiropractor, diamond dealer battle over $349K in rent on UES
    Uptown chiropractor, diamond dealer battle over $349K in rent on UES
    The property on 73rd Street formerly owned by Grace Kelly. (Getty, StreetEasy)
    UES townhouse rumored to have been owned by Grace Kelly sells for $25M
    UES townhouse rumored to have been owned by Grace Kelly sells for $25M
    Firefighters battling a 11-alarm fire at a chemical plant in Passaic. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)
    Bergen County residents told to close windows after fire at chlorine plant
    Bergen County residents told to close windows after fire at chlorine plant
    1428 N Genesee Drive and Freddie Krueger (Realtor, Wikimedia)
    ‘A Nightmare on Elm Street’ home sells for $3M
    ‘A Nightmare on Elm Street’ home sells for $3M
    Discovery at West Road on 9404 West Road, Houston and Haven at Eldridge on 13115 Whittington Drive and McCann Realty Partners Matt Akin (Pegasus Residential, McCann Realty Partners)
    McCann Realty Partners swings two Texas multifamily deals
    McCann Realty Partners swings two Texas multifamily deals
    (Illustration by The Real Deal)
    More than 14K LI residents in mortgage delinquency
    More than 14K LI residents in mortgage delinquency
    9811 Copper Creek Drive, Austin with Tides Equities’ Sean Kia and Ryan Andrade (Tides Equities, Google Maps)
    Tides Equities snags another Texas multifamily property
    Tides Equities snags another Texas multifamily property
    Liz Nunan, ceo, Houlihan Lawrence (Houlihan Lawrence, iStock)
    Lower Hudson Valley notched home sale growth in 2021
    Lower Hudson Valley notched home sale growth in 2021
    arrow_forward_ios

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

    Loading...