Although the last year has been full of surprises, the luxury home market seems to have survived the storm. Despite rising materials costs, longer lead times, and supply chain challenges, the luxury home market continues to be optimistically promising. However, there are a few things that luxury home buyers need to know, so here is a recap of some of the top luxury home market trends for 2021.
Mid-Atlantic Trends in the Luxury Home Market
Here in the Mid-Atlantic, the luxury home market has historically been able to weather housing fluctuations, better than most markets across the country. The Washington, DC area has always attracted high-profile clients. In addition, more and more people are realizing that surrounding communities offer a plethora of lifestyle options too. This has caused a ripple effect of luxury homes to be built in many desirable outlying areas. Annapolis, Howard County, and even Southern Maryland have seen an uptick in the luxury home market. These areas are attractive for a variety of reasons. Many luxury buyers are seeking less dense communities, larger properties, more amenities, and access to larger outdoor space. They may also be seeking convenient weekend getaway options, a future retirement home, or perhaps the desire to live a more virtually balanced lifestyle. Annapolis, in particular, has attracted many high profile clients by offering a unique waterfront lifestyle within a 45 mile commute of the nation’s capital.
Housing Costs & Materials
Covid has dramatically impacted the supply chain for housing materials. While politicians and industry leaders debate the cause and effect of these issues, seasoned home builders like Mueller Homes have been able to adapt. Paul Mueller, Jr., President of Mueller Homes, notes that, “We have seen these cycles before, in our 30 year history. We adjust our production schedules, special orders, and manage client expectations accordingly. Overall, we have been able to manage these changes in our luxury custom home building process.” There is no doubt that rising costs have impacted pricing, but most luxury home owners understand these challenges and are continuing to move forward with their luxury home building projects.
Demographic Trends
The luxury home market is also driven by opportunity. As noted in the Luxury Market Report from May 2021, “low interest rates coupled with profits in the stock market, as well as people having amassed large amounts of personal savings during the last year, means that there is a lot of money still available to invest in real estate.” The cost of money (i.e. mortgage rates) allows many more people to invest in luxury real estate, as a viable option. This environment has sustained growth while the international investors have been kept at bay, due to Covid travel restrictions. So, as international travel resumes, we may see another uptick from international investors. In addition, baby boomers, who historically moved to condominiums for retirement, are opting instead to build their ultimate retirement property and family estate. All of these trends are indeed positive too.
Selecting A Reputable Builder is Critical
While no one can forecast the future, we are optimistic that the Luxury Home Market Trends for 2021 show a pretty sustainable future ahead. However, it’s critical to work with a luxury home builder that has the experience and business acumen to properly manage their business operations. Previously, in this environment, we have seen some builders co-mingle or mismanage funds which can be devastating for the builder and clients they serve. In addition, cash flow is critical. If a customer is relying on bank draws and the builder does not have good cash flow, this could impact construction lead times and timely delivery of the finished product.
If you are thinking about building a luxury home, educate yourself on some of the best practices, common mistakes, and even get free checklists! The book “Designing & Building Your Custom Dream Home” is a great way to educate and inform you on the factors that we have found essential to creating a memorable, one-of-a-kind, luxury custom home building experience. Download or buy a copy of your book today!
Mueller Homes has been handcrafting distinctive custom homes and luxury estates for over 25 years. We collaborate with top architects in the region to deliver an extraordinary custom home building experience! Contact us to schedule a discovery session.
Source: The complete report on Luxury Home Market Trends 2021 is published by the Institute for Luxury Home Marketing and available for download here.
