Buyers Around the Globe Expand Their Searches
In luxury markets across the globe, buyers are taking a closer look at slightly more out-of-the-way destinations that may offer a bit more value, after a booming real estate market saw prices skyrocket. “We are seeing some new luxury areas apart from Tuscany, the very top cities—Rome, Milan, and Florence—and Lake Como,” says Diletta Giorgolo Spinola, head of residential, Italy Sotheby’s International Realty. Instead of Tuscany, for example, buyers are looking at Umbria, she says. Instead of Lake Como, they are going to Lake Maggiore, the second-largest lake in Italy. And there has been an increase in post-pandemic buyers in the south of Italy—Puglia, which forms the heel of Italy’s “boot,” and the island of Sicily.
“With English buyers, it used to be Lake Como because of George Clooney and the Villa d’Este” luxury hotel, says Giorgolo Spinola. “Now people want to be in places that are as beautiful and maybe less expensive.”
Lake Maggiore is “like the new gem,” drawing buyers from Germany, France—which is quite close to the lake— and Switzerland, she says. “The setting is beautiful with larger views because the mountains aren’t as close. It has a very different feeling from Lake Como.”
For both Sicily and Puglia, “we’re now seeing some really famous resorts in both places, and two years ago we opened an office in Noto,” in Sicily, she says. Noto, which has been named a Unesco World Heritage Site, is “10 minutes from the seaside,” she says. It has top restaurants, and “you can buy seaside mansions or small farmhouses.”
Also in 2022, “we have seen a really strong comeback of high-net-worth U.S. buyers on the island of Capri,” Giorgolo Spinola says.
Luxury buyers are still coming to Italian cities, especially Rome, Florence, and Milan, where they are looking for larger homes, she says.
U.S. markets are seeing similar trends.
In Nashville, Tennessee, “we’re seeing the full spectrum,” says Jessica Averbuch, CEO, Zeitlin Sotheby’s International Realty. “It’s like bookends at either end of the luxury market.”
The market in downtown Nashville continues to “skyrocket to new levels of luxury,” she says. The Four Seasons Private Residences Nashville is now delivering and the hotel component should be completed soon.
A new downtown Ritz-Carlton project that will have both a hotel and residential living is in the “early development stage, and the St. Regis just announced that they are looking at downtown properties,” Averbuch says. “This urban high-rise living takes us into a new stratosphere.”
“At the other extreme, we’re seeing so much luxury activity in the exurbs, far away from our urban core, especially in an area of middle Tennessee known as College Grove or Arlington,” she says. “This is a classic rural and pastoral setting, and now we’re seeing new highly amenitized communities with some of the highest price points in the entire region.”
The average list price for a house in College Grove/Arlington, both of which are south of Nashville in Williamson County, is US$2.25 million, and the highest is US$14.5 million, she says.
Discovery Land Co., which has “uber luxury resort-style living all over the world,” recently opened its Troubadour Golf & Field Club in College Grove, Averbuch says. In another neighborhood in College Grove, there is a new luxury community called The Grove, which offers equestrian facilities.
Buyers are now going farther south from Nashville, both east and west, she says. “People who are new here are less tied to a specific location” within the Nashville metropolitan region.
There is a “lot of movement within our region that’s driven by lifestyle choices and affordability as prices have gone up,” Averbuch says. “We’re also seeing a massive influx into our market from around the country,” citing new luxury buyers from California, Illinois, and the East Coast as well as movement within the southeast region, such as the cities of Atlanta, Georgia, and Birmingham, Alabama.
In Scottsdale, Arizona, a desert city east of Phoenix, the state capital, the two most in-demand areas in the luxury market are Paradise Valley and Silverleaf, which is part of the master planned community of DC Ranch, says Frank Aazami, sales associate, Russ Lyon Sotheby’s International Realty.
Paradise Valley is “like our Beverly Hills,” he says. “You have 15 miles of minimum one-acre lots, so people have a good buffer and space between their neighbors.”
Further, there is no commercial zoning, and many properties have both mountain and city views, as well as easy access to the Scottsdale airport, Highway 101 and Desert Mountain, which has seven PGA golf courses, Aazami says.
Other popular amenities in the Scottsdale area include the many hiking and biking trails as well as a “lot of ponds, which is surprising for the desert, and people here like to go boating,” he says. Hot-air balloons are also popular, especially in the cooler weather.
In the Paradise Valley luxury market, “one-acre lots trade north of US$2 million,” Aazami says. “I just sold one for US$3.5 million, and earlier this year I sold a five-acre parcel that went for north of US$11 million.”
The Scottsdale area is booming, Aazami says. “People aren’t moving here for jobs—jobs are moving here for people. We’re seeing a lot of technology growth, chip manufacturers, and electric-car and battery makers.”
Back in Europe, in the southern Spanish city of Seville, “apart from the classic market niches that we have historically worked as a luxury residential, such as villas, private condominiums, and the medieval city center of Seville, we have recently detected two areas that are experiencing an extraordinary boost in their demand,” says Sergio André, managing director, Seville Sotheby's International Realty. “One is located on the banks of the Guadalquivir River as it passes through the neighborhoods of Triana and Los Remedios. The other is the second-home residential market on the coast of Cadiz, preferably very close to the beach and surrounded by services.”
In terms of prices, “we are observing a continuous increase for several quarters, so we expect them to stabilize, but little by little, because new-buyer profiles are also emerging,” he says.
Back in the U.S., the Austin, Texas, market has also begun to stabilize, says Kumara Wilcoxon, global real estate advisor, Kuper Sotheby’s International Realty. “We’re definitely experiencing a normalizing of our market. We still have a lot of buyers and pent-up demand, but we aren’t seeing the craziness we saw during the pandemic.
“Some of the areas where we’re seeing growth are on the outskirts of Austin, and developers are buying up land there,” she says. The outlying communities of Dripping Springs and Driftwood have remained strong, and “central Austin neighborhoods have stayed consistent,” she says.
“I had a sale north of US$20 million recently and a few in the US$8 million to US$12 million range.”
The big feeder market for Austin is California, “both Los Angeles and San Francisco, and we get a decent amount from New York, along with other parts of Texas—Dallas and Houston,” she says. During the pandemic, “120 to 150 people a day were moving here, so we’ve had a significant amount of growth over the last two years, and people are still coming,” she says, citing data from the Austin Chamber of Commerce.
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The Sotheby's International Realty 2023 Luxury Outlook Report is an ambitious exploration into high-end residential markets across the globe and identifies trends that are likely to shape the coming months in luxury real estate.
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