March 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 March 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:

Demand for Luxury Real Estate on the Uptick

The last four months have seen a subtle change in the luxury real estate market.

While the affluent tend to be less impacted by outside influences, concerns over the financial market and economic variables did see buyers take a long pause and the market stagnate during most of 2023. Falling inventory, especially new listings entering the market and, even more specifically, a lack of home types in high demand, also resulted in a decline in the volume of sales.

In recent months, there has been a quiet optimism building as the increase in new inventory entering the market has opened more opportunities for buyers. In turn, this has resulted in an uptick in sales.

The data for February 2024 indicates there is positive movement with respect to sales. Compared to February 2023, the number of new listings entering the market increased by 41.4% for single-family homes and 46.4% for attached homes, but of more significance is that the number of sales also increased in both markets by 23.5% and 18.5%, respectively.

The reality is that except for the locations where the buying frenzy caused both price increases and continued sales growth to become unsustainable, luxury home purchases are once again seeing higher transaction levels across many markets.

The continuation of this upward trend is one that heralds the return of seller confidence and buyer demand as we enter the spring market.

Drivers of Demand

In addition to the opportunity for buyers’ pent-up demand to be released, as more inventory becomes available, we are seeing other drivers start to play a significant role.

More competitive rates for mortgages and other loan types are now being offered to affluent buyers (as their wealth makes them considerably less risky to lenders), which is likely to help ignite more sales from those looking for a spring purchase.

Equally, markets that still offer more affordability or potential price growth are expected to see an uptick in demand. The growth of demand for the luxury sector in these markets is heavily driven by millennials, particularly those who can work from home.

This generation is not living in their parents’ basements anymore; they are buying multimilliondollar homes and is the generation expected to change the high-end housing market as their preferences are driven by technology and environmental requirements.

According to Coldwell Banker Global Luxury’s recent Trend Report 2024, there is a new demographic about to enter the arena called ‘HENRY’s” (High Earners, Not Yet Rich), whose influence could be equally as significant as that of millennials on the luxury property market. They expect HENRYs to become first-time luxury homebuyers as their wealth becomes more solidified and their lifestyle requirements change due to settling down, family, or aspirations matching their new financial status.

Expectations are that we will see many fluctuations in demand, prices, and sales over the next few months. There will be a lack of consistency between markets and within markets themselves, where certain price points will see high demand and others will see very little interest.

Specific property types, as well as locations, are very much on the table when it comes to buyers’ preferences too. Demand for 'move-in-ready’ as well as the need to find a property that not only fulfills aspirational lifestyle choices but is amenity-rich too will be equally important for buyers in 2024.

Locations in Demand

Location has always been important to the affluent, and there is very little expectation for this to change, except perhaps in the diversity of new locations that will come to the forefront of demand this year.

The migration of high-power companies to new locations away from major metropolitan cities throughout North America during COVID is still very much a factor in attracting new affluent buyers. According to Sotheby’s International Realty report, the rise of tech hubs in cities such as Houston, Miami, Phoenix, San Diego, Charlotte, Boston, and Tampa saw double-digit growth in salaries over the past year, which will certainly remain a strong enticement.

Old favorites such as key metropolises will continue to attract those whose businesses lie within, especially as more and more companies are demanding the return of not just their workforce but their senior executives too.

However, it is the continuing demand for multiple ownership of properties in rural, waterfront, and mountain locations, especially those that are less affected by climate change, that could see the most growth in 2024.

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