If you follow the real estate news (and you should), you’ll know that the luxury home market is in something of a slump at the moment. That’s never good news for interior designers, but is it cause for concern? The answer, in part, depends on where you practice. Some markets are performing better than others. Let’s step back and look at the bigger picture.
Nationwide, it is a buyer’s market for luxury homes, especially for those at the higher end ($5 million or more). Supply is outpacing demand. Prices are dropping. And it is taking longer for homes to sell. However, you should consider several mitigating factors. First, the market is not the same in all parts of the country. Premium markets such as the Hamptons, Aspen, and Los Angeles have experienced a double-digit drop in sales. Even red-hot Silicon Valley is seeing some softening. Other areas, though, such as Austin, Anne Arundel County in Maryland, Charleston, Memphis, and Vail report robust activity.
Second, the slow down has been highest among speculators and investors who purchase properties in the hope of flipping them in short order and making a nice profit. Sales among more traditional buyers who want a luxury home to live in continue to do fairly well. These are the individuals who are more likely to become your clients in the months ahead.
Third, competition may spur homeowners who are looking to sell to undertake some redecorating, redesign or remodeling projects to make their properties more attractive. Especially in the high-end condominium market, demand continues for staging or refreshing services.
Finally, keep in mind that real estate sales are not leading indicators but lagging indicators of a changing economy. If the economy continues to perform well, and if policies change that provide the wealthy with more favorable earnings, investment and tax conditions, the luxury real estate market should experience a rebound later in the year.