I recently spoke with the president of Luxury Portfolio International (LPI) Mickey Alam Khan about luxury real estate market trends for 2021. LPI represents the world’s leading luxury real estate brokers and is the marketing and intelligence division of Leading Real Estate Companies of the World, the largest global network of premier locally branded firms. LPI markets more than 50,000 luxury homes annually.
Alam Khan knows the luxury market well as founder/editor in chief of Luxury Daily, the world’s leading luxury business publication, as well as American Marketer, a trends, research and insights platform for marketers and retailers. Alam Khan also founded and edited Mobile Marketer and Mobile Commerce Daily, turning both into leading publications in their space before he sold them in 2017.
Mickey Alam Khan, president of Luxury Portfolio International
Courtesy of Luxury Portfolio International.
Ellen Paris: What luxury market trends do you see continuing in 2021?
Mickey Alam Khan: With affluent consumers making health-driven lifestyle choices amid the COVID-19 pandemic that will continue to shape the luxury real estate market and fuel growth as long as inventory holds out. Demand for exclusive residential properties will continue well into 2021 even as the vaccine for the coronavirus is widely available to large segments of the United States and global population.
Paris: How do you see work from home impacting the luxury market moving forward?
Khan: Coming back to the city will be difficult after you’ve been living in what was your second home. If you can continue to work from home in some flexible way, I see that second home becoming the permanent primary residence for those who did leave the city. The dominant trend with this affluent segment swapping their primary residences for second homes or making them co-primary is here to stay at least for another year or two until the pandemic subsides in the West and other parts of the world.
Paris: Will strong demand continue for second home markets around the country?
Khan: Like bedroom communities, second-home markets will continue to see an influx of clients ready to buy even in off-seasons. Because working from home and remote learning has allowed them the flexibility to enjoy perks of resort market life on an ongoing basis, and not just for vacations. Add to that fervor mindboggling stock market gains and bargain mortgage rates being locked in by millions across the U.S. market, with the downplaying of financial risks in over-extending household budgets.
Paris: What do you see for Manhattan over the next few years?
Khan: Once COVID starts to go away thanks to the vaccine I think people will eventually miss the cultural and social life of the city once it returns. Also, to advance careers especially in big companies you will need to be visible and back in the office. I am totally optimistic about the return of the cities. That includes high-end condominiums that will have a second life where they are in demand once again.
Paris: What is your forecast for 2021 for the affluent market?
Khan: All in all, global and U.S. affluent consumers will continue to realign their priorities to spend more on real estate that gives them and their families a sense of security, health safety, and privacy in a cocoon all of their own. For the wealthy, work, school, socializing and entertainment will all have a common home through much of 2021.