January 2024 Boca Raton Area Luxury Market Report from Jean-Luc Andriot and The Institute for Luxury Home Marketing

As I am a member of The Institute for Luxury Marketing, I thought I would share with you their January 2024 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:

A Year in Review - 2023

The best way to sum up the luxury real estate market during 2023 might be that it remained "unapologetically resilient", despite a slower year in the overall sales volume compared to 2022.
Purchasing a luxury home also retained its appeal with high demand from affluent buyers still looking to realize their desire to buy a new residence. Equally they recognized that the investment opportunity remained, albeit over the longer term.

However, it was a year where buyer demand became hampered by increasing stagnation, with new listings entering the market dropping significantly month over month until the last quarter of the year.

Economic uncertainty, rising inflation and increasing interest rates, led to a growing seller resistance to list their property which further compounded the already low levels of inventory. This was, until the last quarter of 2023, when a shift that started at the end of the third quarter saw more listings enter the market, consequently opening the door for more sales.

Predictions versus Reality

Last year, we predicted that 2023 would see a softer luxury real estate market than 2022. One where properties would stay on the market for longer, prices remain high with little expectation of significant decreases, and where the affluent would base their decisions on long-term investments. All of which have materialized.

While people returned to city life and were happy to embrace smaller footprints again, this did not become a significant trend. Instead, their focus shifted to finding properties that matched their lifestyle expectations – whether that was location, amenities, move-in-ready, intrinsic value, or in many cases all four!

Expectations for a more normalized market, with activity returning to the traditional levels seen prior to the pandemic, did not materialize in the exact manner anticipated either. Hesitation and resistance continued to stall both inventory growth and price reductions expected by buyers, and sellers saw little reason to give up their affordable loan rates or reduce their prices.

Inventory Still A Major Controller

Inventory levels certainly controlled much of the buying narrative during 2023. The initial belief that the market would become more normalized was fueled by an uptick in the number of new listings entering the market during the first quarter of 2023, creating significantly higher inventory levels compared to 2022.

These numbers, however, were still 40% below traditional levels (ie. before the pandemic) and with April’s announcement of further interest rates and talks of recession increasing, seller’s hesitated once more and the market stagnated.

Buyer purchasing demands were also on the shift, and a trend for a move-in-ready home with amenities that matched lifestyle choices fast became the property seeing the greatest demand. Inventory levels began to show the disconnect between buyers and sellers as properties not matching the new criteria started to build up, sitting for longer periods of time on the market.

However, while inventory itself rose, the decline of new listings, particularly of high demand properties, created a dichotomy in the market.

Perception and reality are rarely in sync but by September the luxury market showed signs of an uptick in the right type of inventory entering the market. Sellers were adjusting to meet buyer preferences, the economic climate felt stronger, and the first indications of lower interest rates all contributed.

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