The world’s affluent population– people worth $5 million or more– grew 19.8% in 2021, and with it grew the luxury housing market, according to Coldwell Banker Global Luxury’s 2022 Global Luxury Market Insights report, titled “The Report.”
There are now 3,612,730 affluent individuals worldwide, with a combined wealth of over $75 trillion. Wealth growth in the U.S. rose 24.8% in both population and wealth in 2021, up from 8.1% in 2020.
At the same time, luxury single-family home sales– the top 10% of any given market– increased 14.5%, with prices jumping 20.3% from 2020. Attached luxury homes saw a 29.6% increase YOY and a 16.6% increase in prices.
“Double-digit wealth and affluent population gains have happened concurrently with a once-in-a-generation change in living patterns and migrations,” said Liz Gehringer, President of Coldwell Banker Affiliate Business and Chief Operating Officer, Coldwell Banker Real Estate LLC.
“As luxury real estate represents a larger percentage of the total housing market than ever before, it is absolutely crucial that luxury real estate professionals have a firm grasp of all factors influencing wealthy buyers and sellers today. The agent has become the affluent buyer’s connection point to new locations around the world. ”
The luxury home market experienced steep inventory drops along with the traditional market, ranging from 10% to 36% YOY. Demand remains high as freshly-minted affluent buyers seek out new or second homes.
Forty properties sold for more than $50 million in the US in 2021. Vacation hotspots like Palm Beach, Aspen, and the Hamptons made the list of most expensive home sales last year.
In Hawaii, home sales over $10 million are six times higher than in 2020.
“It’s like nothing anyone has ever seen before,” Matthew Beall, CEO of Hawaii Life, told the Wall Street Journal. “It’s almost like a hot nightclub. It’s not can you get a deal, it’s can you get behind the rope and to the door.”
International buyers are expected to return to the U.S. luxury market in full force, eyeing spacious turnkey properties and secondary or suburban homes. California, Arizona, Texas, Florida, and New Jersey attracted the most foreign homebuyers in 2021.
Luxury buyers are also focusing more on climate change and moving to “green” cities such as Portlant, San Francisco, and St. Paul. But urban areas are also attracting buyers. Manhattan saw a 101.7% rise in luxury sales in 2021.