August 2023 Boca Raton Area Luxury Market Report from Jean-Luc Andriot and The Institute for Luxury Home Marketing
Posted by Jean-Luc Andriot on Tuesday, August 22nd, 2023 at 10:43am.
As I am a member of The Institute for Luxury Marketing, I thought I would share with you their August 2023 report for Boca Raton - Delray Beach.
It is your guide to a general analysis on the trends and comparative data on the top-residential markets in the Boca Raton - Delray Beach area.
Statistics are separated between single family homes and condominiums / townhomes in Boca Raton - Delray Beach.
At the national level:
Understanding the New Reality of 2023
In this month’s report, we take a step back in time to understand why the luxury real market has truly changed, how this new reality for buyers and sellers was created, and why it needs to be appreciated.
Using 2019 as our benchmark year, a year that saw a steady and more typical sales cycle but one that also showed a growing confidence in the purchase of luxury homes as the year progressed. Growth was driven by demand as buyers saw financial potential due to strong stability within the luxury real estate market.
Inventory availability in 2019 was not considered to be a factor in preventing sales, as most markets typically saw a significantly greater number of homes for sale than potential buyers. It’s interesting to note that prior to the pandemic it was rare for the luxury real estate market not to be more favorable to buyers, and equally, expectations were that homes would take much longer to sell than those in the traditional market.
As we all know, and it has been well documented, this all changed with the onset of the Covid-19 pandemic and the surge in demand for luxury properties. Demand outstripped supply at a dramatic and voracious level so that even the rapid change of the market in April 2022, which saw an influx of new listings, proved to be too little, given the uptake in sales during May and June of the same year.
Like 2019, in 2023 there has been a return of confidence in the purchase of homes, month over month sales volumes have increased, after the market faltered in the last four months of 2022. However, this is where the similarities end, as while demand is still important, the new reality is the status of the luxury real estate market is now clearly correlated to the level of available inventory.
Comparing inventory data in 2023 shows the average level of total listings per month is still approximately 40% below levels in 2019. The data also clearly shows that it is not just the depleted level of inventory that is holding back sales, but as we can see from the charts below, it is the actual number of new listings entering the market each month that must also be directly correlated to sales activity – if the level of new inventory increases, so does the number of sold properties for the month, and vice versa.