While the pandemic continues to exert pressure on the U.S. economy as a whole, there is still substantial opportunity in the real estate market segment targeting luxury homes. As a realtor, it is my job to ensure that I am up-to-date on this topic as much of my work is specifically within the luxury home market here in New Jersey. So, with that being said, let me explain why I think this is still a great time to buy a luxury home:
New Industries Create New Wealth
Surely we have all heard of the amazing news headlines about the explosion in valuations of companies like Tesla and Apple and even Ford Motor Company is up quite nicely, and these examples all underscore my point here: new business models create new wealth and that new wealth will be driving the luxury home sales for many years to come. While many industries were in a downward cycle recently, at the same time we are able to behold the changes announced at companies like Jaguar Land Rover, where the goal is to go fully-electric by year 2025 which is only four years away. These are all very positive leading indicators for the luxury home market, which is why I am looking forward to helping people buy and sell homes in this category of real estate for many years.
Stock Market Growth is a Positive Influence
It goes without saying that having a feeling of wealth, be it in the form of plain old money in the bank, or in the form of stock holdings with valuations that have risen dramatically in the last 12 months, entices people to go out and buy homes, especially in the luxury home realm. I have seen this before, after the great financial crisis of 2008, where people who found new ways of accumulating wealth needed to upgrade their housing status to a tier more in line with their financial status. So why would it not be the case again in 2021? I say bring it on, let the selling and buying commence!
New Administration and Political Effects
Many people are concerned that the new administration will be looking to raise taxes as compared to the previous president and his tax plans, the simple truth is that neither republicans nor democrats are interested in raising taxes for the time being because the country needs to recover from the adverse impacts of the pandemic. This means that pro-growth strategies will be their main focus, and taxation should remain fairly stable for the time being, so the luxury home market will likely remain unaffected for now.
Nothing to Fear in the Luxury Home Market
There are many reasons why people buy homes in this market segment, but the points iterated above all give us encouraging signs for health home buying activity in this year and beyond. Sure, the markets always move up and down at various times, but people who buy homes in the high end of the real estate market know this and are generally not swayed by short-term fluctuations. I am only optimistic that we will do well in this business for many years and thus I have no reason to worry at night. :)
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