Sotheby’s International Realty is pleased to announce the release of its inaugural 2021 Luxury Outlook report which examines high-end residential markets across the globe in the wake of the Covid-19 pandemic. The comprehensive report provides insight into the world’s top primary and secondary markets and the anticipated wealth trends that will drive discretionary investment in the coming months. The report reveals that global wealth is forecasted to grow and pandemic trends are expected to persist in the year ahead. With priorities shifting toward larger homes with special amenities, including “Zoom rooms,” multiple offices and workspaces, and an increased interest in sustainable homes with wellness and technology features, the Luxury Outlook highlights new spending habits and homebuying trends.
“As a leader in luxury real estate, it was important for us to analyze trends emerging from the most unparalleled year in modern history,” said Bradley Nelson, chief marketing officer for Sotheby’s International Realty. “The pandemic recalibrated interest in larger, greener properties, secondary cities, and geographies with favorable tax and emigration policies. These preferences are likely here to stay for the foreseeable future, and it was important for us to provide a resource to those looking to navigate the months ahead.”
In sharp contrast to the “slacker” stereotype that has defined their generation, millennials aren’t living in parents’ basements. They’re buying multimillion-dollar homes.
At 38%, millennials—adults born from 1981 to 1996—represent the largest share of home buyers in the U.S., according to a survey by the National Association of Realtors released last year. “They’re just as interested in owning a home. They just waited longer to buy their first one,” says Bradley Nelson, chief marketing officer of Sotheby’s International Realty.
Breaking from the notion of a “starter home” that older generations embraced, wealthy millennials, Nelson says, are going big.
“In the past, people bought a modest property, lived in it until starting a family, and then traded up to a larger property,” he says. “Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home in the U.S. or internationally.”
As a result, millennials are quickly becoming a dominant force in high-end real estate.
Millennials are the most educated generation in history, have higher earnings, and are set to inherit more than any prior generation, according to a May 2020 report by the Brookings Institute.
Characterized by their tech savvy and environmentally conscious values, millennial preferences are poised to dramatically shape the market, a dynamic that has been on display during the Covid-19 pandemic. Beginning almost immediately after the coronavirus hit, for instance, buyers began to flock to areas that offered walkability, nature, and a well-rounded quality of life. (Think food and an art scene.)
Total sales volume in Aspen hit a record high of more than $1.5 billion in the third quarter, while in some neighborhoods of Park City, Utah, median sales prices spiked by more than 50% during the summer, according to Sotheby’s 2021 Luxury Outlook.
Outside the U.S., the Mornington Peninsula outside Melbourne on Australia’s southeastern coast has also seen a similar influx, the report states.
Going forward, developers are likely to integrate touchless, high-tech features into more homes and focus on bolstering sustainability credentials in new buildings, Nelson says.
From energy-saving geothermal systems and solar panels to green roofs, “these are the features that are most attractive,” he adds. “If a home is move-in ready and environmentally conscious and has a Tesla charger installed in the garage, those homes are generating a premium, because you have so many buyers interested in competing for them.”
Overall, the luxury real estate market is ripe for growth.
According to a December Sotheby’s International Realty survey, 63% of affiliates polled said they expected luxury home prices to rise over the next three years in their respective markets. More than 70% of respondents reported heightened demand at the end of 2020.
In the short term, however, disjointed vaccine distribution and renewed quarantine restrictions could hamper foreign buyer interest. Only one-third of Sotheby’s affiliates expect to see an uptick in demand in the first half of 2021, according to the report.
Additionally, amid indiscriminate declines in overall tax revenues caused by the pandemic, governments globally are reassessing property and wealth taxes as a means of filling budget gaps.
“Across all buyers, tax implications are going to be larger part of their home-purchase consideration,” Nelson says.
For the fast-growing cohort of young, affluent buyers eager to snag their dream homes, millennials face slim pickings for options that meet their unique tastes. “Inventories are at near-record lows in general, and especially for the homes with the features they’re looking for,” he says.
Still, Nelson adds that with “wealth creation growing and cost of capital declining, it’s a promising storm for the high-end housing market.”
From the sale of the highest-priced home in the history of Vail, Colorado, to that of an architectural masterpiece in Las Lomas, Mexico, highlighted here are 10 Significant Sales from 2020 represented by the Sotheby’s International Realty® global network.
Sold for $57,250,000 | Tye Stockton, LIV Sotheby’s International Realty
Ranch living keeps it on the level. Spread out over one floor, these homes are more casual than other styles, often lacking the symmetry of more classic designs. Buyers are attracted to that casual air, and the style maximizes indoor-outdoor living that adds to the feeling of ease. The homes can also allow for privacy, with clever layouts and landscaping.
Modern examples incorporate features like open-floor plans, floor-to-ceiling windows, and the latest technology into the build, but they are still centered on indoor-outdoor living.
The style flourished in places like California, where the weather allows for the outdoors to be an extension of the home most of the year. Many of these were built as suburban developments in the years immediately following World War II.
Property ID: 0593275 | sothebysrealty.com
Sotheby’s International Realty | Santa Barbara Brokerage
“In the 1930s, ’40s, and ’50s, most of the very good residential architects here in California were designing ranch houses; it was just part of their portfolio,” explains Irvine, Calif.-based architect Alan Hess, author of The Ranch House. “They are just excellently designed.” Architect Cliff May popularized the style, inspired by the adobe ranch houses owned by his family near San Diego, according to a 1986 New York Times article.
“I rebelled against the boxy houses being built then,” May, who died in 1989, told the Times. “The ranch house was everything a California house should be—it had cross-ventilation, the floor was level with the ground, and with its courtyard and the exterior corridor. It was about sunshine and informal outdoor living.”
May built the first home in this style in 1931, and, over his career, designed more than 1,000 custom houses. The bulk of them were in California, but he also had projects as far away as Ireland, Australia, and Switzerland.
Modern architects are also melding cutting-edge design with one-level living. In Santa Barbara, Calif., local architect Ken Radtkey and his team at Blackbird Architects created a ranch-style home there in 2016. It incorporates a modern kitchen, dining, and living area as the center of the home, with the master suite and office separate from the additional bedrooms. Guests and residents can access the outdoors from almost anywhere in the home.
The home has modern sliding doors and floor-to-ceiling windows, and its curved roof creates a shaded outdoor living space. And the outdoor areas are just as well planned, with native and drought-resistant plantings, grass terraces, an orchard, a pool, gardens, and a koi pond with a stone waterfall.
The owner’s imported Moroccan doors have been incorporated throughout the house, creating a unique contrast to the home’s clean lines, according to the architect. There’s also a separate garage with an artist’s studio. Recently listed for just under $5 million, Montecito-based Sotheby’s International Realty agent Joe McCorkell is representing the property.
The Rancho Santa Fe home, has an open-floor plan.
Homes by May are still in demand, as well, according to Clara Yang, an agent with the Beverly Hills Brokerage of Sotheby’s International Realty. Yang is currently marketing a three-bedroom, two-and-a-half bathroom home designed by May in 1948. Located in the lower Mandeville Canyon area in Los Angeles’ Brentwood neighborhood, the home is listed for $3.6 million.
The kitchen and bathrooms of the 2,322-square-foot home have been updated, but much of the design remains the same, Yang says. “Wherever you are, there’s a door to walk outside,” she notes. “And there are windows throughout to let the light in.”
The home, built in a U shape, surrounds a courtyard with a firepit and mature landscaping. There are also two patios with fountains, a pool surrounded by a glass fence, and a pocket garden.
“It’s not like a modern house with an open-floor plan. It’s like a treasure hunt; there’s something different around every corner, ” Yang says. “It’s perfect for staying home, because each person can have their own space and everyone can meet up in the middle.”
Other May-designed properties do offer that open plan, however. A four-bedroom, five-and-a-half bathroom home in Rancho Santa Fe, Calif., boasts a flowing layout, as well as abundant natural light and a central courtyard that connects seamlessly to the indoor living areas.
Landscaping is key to ranch homes, and May is known for having brought in mature trees to plant on the grounds of his projects. This property is no different, note agents Eric Iantorno and Beth Van Boxtel of Pacific Sotheby’s International Realty. The home, built in 1973, sits on almost three acres and is currently on the market for $5.8 million.
“Cliff May used adult trees and plants at the time, and these days they are giant,” Van Boxtel explains. They include olive and pepper trees, plus a small fruit tree orchard, a vegetable garden, several kinds of berries, and a variety of tropical plants.
“The olive trees make it feel so romantic,” Iantorno notes. “And the details of the space—things are small and then expand, and that play on proportions makes it feel very special.” Single-level houses have gained in popularity as the baby boomer generation looks to retire and relocate to places without stairs. But Yang says she’s seen more interest in ranch-style homes from buyers of all ages.
People are attracted by the informal ease of living there, as well as the integrated indoor-outdoor experience. Others are drawn to the deceptively simple architecture. “They’re just brilliant little designs, and people are appreciating them,” Hess says.
In a city known worldwide for its storybook Victorians, this 1889 Queen Anne home, located on a lovely block in Pacific Heights, fits right in. Its eye-catching façade features decorative millwork, stately columns and marble steps, elegant sashed and bay windows, and whimsical trim, all telltale elements of the period style.
The home stands out, however, for a provenance that is uniquely Californian and for recent owners themselves known and beloved worldwide. A forebear of current governor, esteemed architect Samuel Newsom is best known for his designs of landmarks such as the Napa Valley Opera House, Oakland City Hall, and the Carson Mansion in Eureka, but his keen eye and steady hand were also behind the design of this home. The San Francisco residence of Meg Ryan and Dennis Quaid during the 1990s, it was thoughtfully rejuvenated in 2018 by the current owner, with the help of notableBay Area designer Nicole Hollis.
Today, the home’s iconic façade belies 7,050-square-foot interiors that are wholly contemporary, with chic shades of light and dark gray, sleek surfaces, eye-catching accents and finishes, handsome angle-planked walnut flooring, and an array of modern amenities. Public spaces were designed with entertaining in mind. The foyer flows effortlessly to a living room with striking lighting and a fireplace and a formal dining room. The open-plan kitchen and family room will appeal to entertainers and chefs of all skill levels; it boasts a wall of built-ins, superior professional-caliber appliances—including a rare Lacanche range—a Calacatta-marble-wrapped island, an adjoining patio, and a butler’s pantry or caterer’s area with two ovens, generous storage, and refrigerator and freezer drawers. But everything—most notably a disappearing wall of glass—seems to direct the eye to one key, enviable feature, a breathtaking view that sweeps across the bay to Marin County in the distance, with the unmistakable silhouettes of Alcatraz and Angel Island in between.
A skylit stairway and an elevator link each of the home’s four levels. Tucked behind one gracefully curving bay window on the second floor, the serene master suite is a peaceful oasis that includes a tony dressing room, a bath with a soaking tub that overlooks the bay, a spacious shower, and discreet water closet. Completing this level are two light-filled guest bedrooms, each with an en suite bath and a fireplace.
Two additional quiet bedrooms with a shared bath are secluded on the uppermost level. But the pièce de résistance is the pentroom, tucked beneath the angles of the timeless pitched roofline. Stylish relaxation and entertaining are easy here, thanks to a well-outfitted media area and an extensive bar. A wall of glass offers an inspiring vista and opens to a breathtaking open-air patio, where a fire pit offers cozy warmth and a frameless glass balustrade keeps the outlook purely uninterrupted.
A coveted three-car garage is located on the ground level along with a thoughtfully appointed mudroom, a laundry room with abundant counter and cabinet space, and a three-quarter bath. Practicalities aside, this floor features versatile space—ideal for an office—with a glimpse of the bay, a temperature-controlled wine room, and a cheerful family room. Yet another a wall of glass gives way to a heated covered patio enveloped by greenery for the utmost in sophisticated privacy—a welcome bonus here, at one of the city’s most sought-after addresses.
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