As originally published on Forbes
By Anthony Hitt, President & CEO, Engel & Völkers Americas
For homebuyers today, luxury doesn’t necessarily equate to price point — often it is actually quite personal. Luxury can be more time at home with family, proximity to friends and loved ones, or convenience in terms of amenities and features.
What does this mean for real estate professionals?
It means that we too have to start thinking of luxury differently. Its definition is as unique as every client who walks through the door. It also means that cities and communities with the highest price points are just one type of luxury market. As digital connectivity allows more and more people to work from any location, lifestyle amenities and surrounding recreational offerings allow many to live seemingly happier lives.
With this evolving definition of luxury in mind, these are five of what I believe to be key, up-and-coming luxury markets in North America right now.
1. Southeast Coastal Communities
As recently covered by the Wall Street Journal, more and more people are deciding to turn their vacation homes into their full-time residences, citing quality of life, family time, nature and the ability to unplug as reasons to move their families full-time to traditionally second-home markets.
We’re absolutely seeing this in markets like the Golden Isles in Georgia and Hilton Head Island, South Carolina. It’s a seller's market right now in the Golden Isles, with increasing demand. However, housing prices have yet to reach pre-recession levels, making now the ideal time for buyers to invest.
Similarly, the housing market on Hilton Head is hot. The MLS of the island reported 2017 as its busiest year yet, with $3.85 billion in property transactions and an 11.5% increase in properties sold year-over-year from 2016 to 2017.
2. Bozeman, Montana
Bozeman has been long renowned among outdoor enthusiasts for its fishing, hiking, skiing and cycling. Perhaps one of the first hubs of “Silicon Prairie,” Bozeman has become home to quite a few tech startups. As more jobs pour into the area, people are not only coming to Bozeman but staying there thanks to the outdoor amenities and work-life balance it affords — and the real estate market is reflecting this.
Bozeman is one of the fastest-growing non-metropolitan areas in the country. As the number of single-family homes in Montana has grown exponentially over the past 25 years, Gallatin county continues to lead that growth.
3. Brooklyn, New York
Brooklyn used to be the less-expensive alternative to living in Manhattan, while still in close proximity to the city, but no more. Dumbo, Fort Greene, Greenpoint, Carroll Gardens and Park Slope all rank among the most expensive neighborhoods in New York City, with median sales prices clocking in over $1 million.
However, with amenities like outdoor space more accessible in Brooklyn, along with subway access, some of the city’s best eating and the unique sense of community that characterizes each neighborhood, it remains extremely popular for young families looking to settle down without giving up the city lifestyle. In fact, nearly 88% of the population is under the age of 65.
4. Portsmouth, New Hampshire
Called by National Geographic the "U.S.A.’s Greatest Small Town," touted as one of the top 50 cities in the country for entrepreneurs and featured on countless notable lists ranking the country’s best food scenes, most beautiful towns and best places to visit in New England, Portsmouth has no shortage of accolades. This riverside enclave is experiencing both high-wage job growth and growth in household income, making it an area poised to boom over the coming years. In fact, home inventory for this area hit an all-time low in more than six years at the beginning of this year.
5. Portland, Maine
Since the beginning of 2018, home sales across Maine rose 3.5% and prices saw a 10% increase from the same period the year prior. Portland is also ranked among the top 20 cities for entrepreneurs in 2017 and is continuously recognized among the 100 best places to live in America overall, thanks to the city’s unique combination of New England charm and big-city conveniences. As more people look to settle in places that offer a better quality of life and strike a balance between the personal and professional, this seaside town will continue to grow.
As we look at these emerging luxury markets, one trend is clear: As digital connectivity enables people to work from anywhere, more and more consumers are turning to markets that provide access to the outdoors and allow the realization of a true work-life balance. Real estate professionals will be well served to heed these changing preferences and adjust their offerings accordingly.