The Agency's Mauricio Umansky discusses what the trend means for prime real estate market.
—thanks to a combustible mixture of low interest rates and lockdown-related savings. Umansky and his firm explore this surge, and other trends, in its second annual red paper. The report offers a snapshot of luxury real-estate trends worldwide, deploying data from its network of offices from Los Angeles to Amsterdam. Some of the findings aren’t surprising: The six million homes sold stateside last year was the highest tally since 2006, just before the Great Recession, for example.
Only one category of move-in ready mansions is struggling right now, per the Agency: the classic, airy open-plan SoCal spread is no longer as crave-worthy, thanks to widespread remote working. Buyers need to carve out private spaces for each family member, however large the footprint of a home. Umansky says the firm now stages these open-plan mansions differently, breaking up the space to show how it can be reconfigured.
Most mortgage-watchers know that that luxury real estate is now trading largely on all-cash offers. “I just did a deal this week for $40 million, and it was all cash, and we’re seeing it for the first time all around the country, not just Los Angeles but Florida, New York or an Aspen ranch,” Umansky says. Despite impressions, though, most aren’t from cashed-up tech bros and their ilk.
The biggest shift, according to Umansky, isn’t in how homes are financed—it’s the number of properties in a buyer’s portfolio. Many well-to-do families have long owned two homes, a primary estate and a vacation getaway. A portfolio of homes was once limited to the ultra-wealthy. That’s no longer true. In 2022, third or fourth homes are now the norm for much of the 1 percent.
remain strong, with Americans who ditched hotels during the pandemic remaining keen to rent a standalone property. “And I can tell you from personal experience, I pay my entire year’s costs for a home from four weeks of rentals—that’s an amazing lifestyle,” Umansky confesses, noting that such a business model has expanded from areas where it was traditionally used—the Hamptons, say—to other luxury vacation markets, whether Mexico or high-end islands in the Caribbean like Turks & Caicos.