Each month, The Institute for Luxury Home Marketing prepares an in-depth report on the latest trends in the luxury home market, for the United States and Canada. While the report covers the entire nation, we dissect those national trends and compare how they are playing out here in Maryland. Here are some of the highlights we think are particularly appropriate for those who are considering building a luxury home in the Maryland region.
Affluent Homeowners
According to Wealth-X, generational wealth is increasing substantially while the ultra-high-net-worth have seen a significant increase in wealth over the past few years with a 20.4% increase in 2021 vs. 2.2% growth in 2020. This kind of continued growth brings more people to the luxury home market. Certainly, here at Mueller Homes, we have seen a dramatic increase in potential clients from states like New York, New Jersey, Pennsylvania, Colorado, and Illinois for Maryland luxury homes.
As noted in the report, “Affluent homeowners are on the move with the luxury markets still very much in high demand.” However, as the report notes, there are many more global buyers coming on the scene. This is proposed to be a result of pandemic-related effects. After all, with shutdowns across the globe, only those here in the United States were able to take advantage of buying real estate here. Foreign buyers were stuck in their home countries and largely unable to participate in the demand. Now, with many countries no longer under lockdown, global buyers have flooded the luxury real estate markets keeping the pace of demand steady.
Global Demand
The report also highlights the demand in global luxury home markets like Dubai, Delhi, Mumbai and even Sydney and Melbourne. Inventory levels have been incredibly low in places like Monaco and St. Moritz while prices are incredibly high. Here in the U.S., cities and urban areas continue to be popular but affluent homeowners are also seeking retreat areas in the coastal towns of Maryland like Annapolis, St. Michaels, Easton and Queenstown. Here at Mueller Homes, we have seen incredible growth in this market alone.
What Does it Cost?
It is extremely difficult to get an average price on homes in luxury markets because of all the variables. The report does show that, in Maryland, it’s still a seller’s market. The average days on market hovers around 5 days in the top 5 markets in Maryland. Talbot County leads the median sold price in Maryland at $2,010,000. Nationally, the cost per square foot for luxury single family homes averages $443/sf. and we have seen similar construction costs for a new luxury custom home.
To Build or Not to Build
For many people, the decision to build or not to build may be driven by the economy, interest rates, or the overall global outlook. Some of our clients move forward because they believe that things are only going to continue to rise, while other clients err on the side of caution with a wait and see approach for the next 8-12 months. The one thing we have seen consistent over the past five years is the incredible shortage of land. And this is not a problem that is going to get any better. So, we encourage our clients to continue to search and secure your lot, even if you decide to hold off on building, for the time-being.
If you are considering building your once-in-a-lifetime dream home, give us a call. We will share with you our experience, over the past 30 years, to help you understand the Maryland Luxury Homes market and whatever direction you decide to take. Schedule a call or consultation today.
Source:
The Luxury Market Report – May 2022 is prepared by the Institute for Luxury Home Marketing
