If the owners of St. Cloud luxury homes have enjoyed watching their property’s value growth of late, they have nothing on what Forbes Global Properties reports for the luxury segment of international residential properties. They define the world’s luxury market as the top 20% of transactions—a designation that yields a startling single-year price increase of 34% for 2022!

International luxury markets are subject to many global oscillations that don’t affect U.S. and St. Cloud luxury markets, yet major similarities exist that also set the high end of the domestic market apart from the rest. As with global markets, buyers here have higher net worths than average buyers in the wider market, so they are better insulated from economic downturns. The same is true for sellers, who are less likely to be moved by transitory business cycles. For the same reason, buyers and sellers are less reliant on outside financing—so recent interest rate gyrations are less consequential. Since luxury homes in general are typically in high demand, support for premium prices is often stronger than for the rest of the market.

According to fastompany.com, 80% of well-heeled respondents agreed that real estate is “a safe investment.” Affluent consumers are frequently attracted to luxury properties for their track record of staying power during economic downturns.

That level of confidence may be pivotal in today’s uncertain economic environment. In a survey of more than 2,000 high-net-worth Americans, more than half expressed confidence in luxury real estate investments. Three times as many thought that 2023 will be a better time to invest in real estate than was the case in 2022. That might be connected with what Bloomberg reported at the end of last week’s bond-buying rush. It headlined, “Investors are Dumping Equities and Cash Amid Fears of Hawkish Fed.” If investors are not just dumping equities, but cash too, that leaves two fewer of luxury real estate’s major rivals.

St. Cloud luxury homes remain in limited supply—a constant that prompts successful buyers to stay informed on a regular basis. Call me to help in that department!  

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