The shift in the real estate market from the unprecedented boom of the post-pandemic years has raised a lot of questions about what to expect in 2023. While economic volatility remains in the near-term projections, there are stable expectations for the affluent real estate market. One of the reasons to predict strength in luxury real estate is because of its enduring value as a long term vehicle for safeguarding wealth and passing it to next generations. Particularly in Florida, where there is no estate tax, there is a significant advantage to retaining - and growing - equity through real property ownership.
This year's Luxury Outlook Report from Sotheby's International Realty combines the resources of the world's leading luxury brokerage with expertise from peers in finance, banking, economics and policy. A few of the key takeaways are that premium home prices will remain strong because of the proclivity of affluent buyers to purchase in cash and because of the permanent lifestyle changes stemming from the pandemic. The demand for luxury homes and the capacity among affluent buyers to acquire them remains strong and will spur further development of luxury new construction. In the meantime, the lag in this supply of new inventory will keep pressure on the prices of luxury homes.
While interest rates are projected to taper, there is little anticipation that they will reach their historic lows, creating incentive for affluent buyers to continue to transact in cash. Along with interest rate fluctuation, the volatility of the greater economy has kept luxury buyers interested in securing their wealth through assets most likely to appreciate, including real property in markets with strong growth potential like Sarasota.
Click here to read the full 2023 Luxury Outlook Report.