There is no doubt that 2020 was the year of unpredictability, from dramatic stops and starts to multiple offers on properties that had sat on the market for years, as well as significant lifestyle changes in both work and home life.  It is expected that the affluent will continue to realign their priorities to spend more on real estate to provide their families a sense of security, health safety, and privacy. For the wealthy this will mean that work, school, socializing, and entertainment will take place in their homes through much of 2021. 

Prices for luxury properties have climbed steadily over the last few months in the majority of luxury markets across North America, even in major metropolitan cities.  

Much of this demand has stemmed from the growth of the wealthy, both in terms of financial and numbers, during 2020. They have been responsible for an upsurge in property purchases in exurban and rural communities, as well as larger attached properties in metropolitan markets.  Many experts believe that, if COVID starts to dissipate or becomes more controllable during 2021, there will be a return to the big city life, as some will miss the cultural and social aspects, and others will recognize that it is a necessary step to advance their careers or businesses.

Other experts believe that the demand for exclusive residential properties that offer larger footprints, provide more amenities such as private outdoor space,  numerous home offices, and health perks including air and water filtration to natural and ambient lighting systems, will still be the driving force of luxury real estate in 2021. Stating that the trends of 2020 have created a complete shift in lifestyle choices that is unlikely to be reversed. Factor in lower interest rates, low inventory levels, new wealth from sectors that benefitted from the pandemic, a millennial population that is ready to find a safe haven, and significant increase in second home buying as well as upsizing and new properties offering higher wellness standards, and you have the perfect storm for creating a continued strong buyer demand. 

The bigger question lies in whether current sales levels and price increases can be sustained indefinitely. There is always a point at which prices do become too high and demand levels off, but for communities where inventory levels are at an all-time low, this trend may well continue far into 2021. In fact, many luxury markets saw a significant decrease in inventory in January 2021. Single family available properties are down over 30% from January 2020.