It’s only the beginning of October, but real estate sales are already in a record slowdown.
In the real estate world, luxury real estate is the best place to be…usually. In today’s political and economic climate, people are becoming less and less likely to invest in costly real estate ventures. This is being seen in most major markets in the entire US and has been reported by the likes of CNBC.
What is Causing the Decline In Luxury Real Estate Interest
Real estate experts are no strangers to seeing declining interest in buying and selling real estate when the majority of news indicates a recession is looming. The category also suffers when news is primarily focused on political agendas. Knowing that 2020 will see a new president, people are reluctant to invest in buying new properties. This behavior has especially hurt the luxury real estate market (anything greater than $1 million dollars in sales).
It’s a Shift for All Markets
Most major cities are feeling the decline of interest in luxury condos and homes. From Florida to New York and Chicago to San Francisco, the trend is the same.
Usually this scenario happens when the weather is continuously bad, there is tension in politics or the economy is at the brink of a recession. We saw this happen in 2008 when the recession occurred and this is feeling oddly familiar.
– Lynne Koy, Sarasota Luxury Real Estate Agent
When we caught up with this luxury realtor in Sarasota, Florida, we learned her business had been steadily rising since 2011. Now, in 2019, business has slowed down and the market has grown increasingly quiet quiet. We asked if she changed anything her office was doing regarding advertising, SEO, print marketing, etc., and she indicated that her marketing efforts are the same as always.
Next, we discussed the issue with a tenured luxury real estate agent in Chicago, Illinois.
The Chicago luxury real estate market hasn’t been this slow in almost a decade. I went from 3-4 showings a day to 3-4 showings a month. I think the political climate is part of the issue, but people are also more hesitant about investing in real estate. I really hope there is a turn around in the coming months and hopefully by the time 2020 kicks off.
– Richard Shelly, Chicago Luxury Realtor
The Silver Lining With a Recession
Although any recession is concerning, there is a silver lining in the upcoming recession. This will allow interest rates to be at historical lows, which resets the buying market. It’s not the best for real estate agents, but it is good for anyone wanting to invest in real estate.
If you are a real estate agent or an investor, now is the time to pay very close attention to the luxury market.