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Ample square footage is commonplace in a luxury home, but these days, wealthy homebuyers are placing even more emphasis on this factor. The health crisis has shown homeowners and buyers how valuable lots of room is in a home, and this is influencing their homebuying decisions in the luxury real estate market.
Buyers in the luxury real estate market may continue to focus on high-end features, but lots of space may trump all other must-haves on their list. In particular, enough square footage to accommodate home offices, gyms, and other on-site amenities are what luxury homebuyers are looking for in a new home purchase.
A luxury home is one that features high-end materials, finishes, architectural details, and features. They’re also larger in size than the average home and are located in very desirable areas.
Let’s break down the factors that make a house a “luxury home.”
Location plays a key role in the value of a property, and luxury homes tend to be located in the more optimal areas of a local housing market. For instance, locations with mature greenery, good schools, low crime rates, and close proximity to amenities are more desirable than areas with minimal greenspace and everyday amenities.
Further, the lot that a home sits on within a neighborhood also matters. For example, a home that’s built on a larger lot backing onto a ravine would be valued higher than the exact same home on a much smaller lot on a noisy street.
Size matters when it comes to luxury homes. Generally speaking, the larger the home, the more luxurious it is considered. A larger blueprint offers more room for more rooms, open areas, and other nice-to-haves.
Luxury homes typically boast high-quality materials in their construction, such as natural stone counters in kitchens, thick hardwood floor planks, detailed wainscotting, and crown molding.
The average subdivision is typically characterized by cookie-cutter homes. Luxury homes, on the other hand, are typically constructed with more unique architectural design to suit the tastes and style of the individual homeowner.
Luxury homes are often complete with lavish amenities, including swimming pools and pool houses, tennis courts, saunas, wine cellars, and movie theaters.
Homeowners and homebuyers may find their needs changing with each passing year, prompting them to re-evaluate their living arrangements. In turn, some may consider luxury properties with more unique layouts and fine features more suitable for their evolving tastes and requirements.
Interestingly, the recent health crisis gave rise to a strong luxury real estate market in 2020 and 2021. Demands for more elegant homes among homeowners changed over the course of the past couple of years.
More specifically, the spike in work-from-home arrangements during the pandemic has been among one of the biggest driving factors for homeowners and buyers who seek more space for home offices.
In addition, there has been a growing interest for more space, both indoors and outdoors, given the challenges that many people faced during quarantine.
Further, the ongoing low interest environment has made home buying more affordable. This has given buyers the opportunity to purchase more expensive homes while offsetting the higher prices with very low rates.
What trends will we see going forward into 2022 and beyond in the luxury real estate market?
City centers tend to be more expensive on a price-per-square-foot basis, but suburban locations are becoming increasingly sought after by luxury homeowners. Lately, homeowners and homebuyers have been moving out of urban areas in search of more space and tranquility that are difficult to get in a more densely-populated area.
As such, one popular trend we’ll continue to see for the foreseeable future is a preference for suburban living.
While luxury homeowners may have no problem affording high-end properties in the city, their dollar goes much further in a suburban community for the amount of space and type of home they purchase.
Luxury homes are not exactly void of high-end amenities, but such features are becoming increasingly focused on, particularly following the recent health crisis. For instance, homeowners are more often looking to improve their homes’ air filtration systems to ensure optimum safety regimens for the health and well-being of all occupants of the home.
Condo owners are also seeking amenities that provide a healthier living environment, such as rooftop decks, spas and saunas, larger patios and outdoor areas, on-site medical care, and even wellness technology to optimize health.
With an increase in homebuyer demand comes the need for new home builds to keep up. Fortunately, home builders seem to be prepared to meet such demand.
According to the US Census Bureau, more than 1.55 million privately-owned housing starts were reported for September 2021. That’s 7.4% higher from September 2020.
Amidst this new construction, luxury home builders and developers are looking to improve on their designs to accommodate consumer demands and preferences, especially after the pandemic.
What are the benefits and drawbacks of purchasing a luxury home?
What are buyers looking for when shopping for a home in the luxury housing market? With more money to spend on a home compared to the average homebuyer, luxury buyers are increasingly setting their sights on the following traits, particularly in the wake of the pandemic
Before setting out on the hunt for a luxury home to buy, keep the following tips in mind to ensure a sound transaction.
Regardless of the type of home you’re buying, working with an agent who is well-versed with the local real estate market is advised. These experts often have information about upcoming listings before they even hit the market, giving buyers the chance to pounce on a home before other buyers catch wind of it.
In fact, many luxury homes are not listed publicly to protect the seller’s privacy. As such, these homes are often only found through the agent’s network of other industry professionals.
Even though luxury buyers tend to be wealthy, approval for mortgage financing isn’t necessarily guaranteed. Buyers should still approach a lender and get pre-approved for a mortgage before house hunting. In fact, a preapproval letter may be a requirement before luxury home sellers even allow a prospective buyer to view their home and will likely be required as part of an offer.
Depending on how much is needed to buy a luxury home, a jumbo loan may be necessary. A jumbo loan is a type of mortgage where the loan amount is more than the conforming loan limit in the area as set by the Federal Housing Finance Agency (FHFA).
In King County, Washington, for example, the current conforming loan limit is $891,250 That means any loan amount over this limit will be considered a jumbo loan.
These loan types are more common in higher-priced areas and tend to require stricter lending criteria when it comes to credit scores, asset profiles, and down payment amounts. Interest rates may also be slightly higher compared to conventional loans.
At Sammamish Mortgage, we are well accustomed to helping homebuyers find the perfect house on the luxury real estate market. We have a streamlined preapproval process, and can help you get the jumbo loan you need to move into your dream luxury home.
Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get preapproved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.