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luxury real estate

Luxury new developments boom in USA

 The migration from states such as New York, New Jersey and Illinois to those in the south of the country has had a number of effects, including triggering a new construction boom

Those who are very close to the technology industry have an inkling that there is an upcoming boom in real estate. According to the realtor’s website, there is a strong demand for luxury homes in the states of California, Florida, Arizona and Texas.
As a matter of fact, more than 40% of Americans now own their own home and this trend does correlate with a decline in interest rates. The average American home price has increased by 0.4% since 2014, according to . Compared with other major markets like London and Hong Kong , income levels here remain relatively low relative to other major nations including Japan and Taiwan .
Moreover, people are becoming increasingly concerned about their retirement assets because concerns about wealth replacement preceded by concerns about longer-term wealth preservation due to stock market volatility throughout 2015/16. This can be reflected by how far down investment returns keep going since last year’s peak levels:
Real estate prices were up 2.6% — or 10% — during this time period according to Zillow data; so on the surface it seems like more expensive housing stock might be good news for Americans’ finances.


One of the reasons for this construction boom is the tax advantages offered in southern states

It’s a foreshadowing of the future: New York and New Jersey will be nothing more than “tax traps” for the rest of us. Maybe we are wrong, but we will see a similar trend in other states. If you want to be wealthy in US, don’t move there. Just buy a house in California or Florida, rent it out and make your money elsewhere.
But if this trend continues, we can expect more people to come to the south in search of escape from taxes and crime — not because they want to live there, but because they want to avoid troubles.


The warmer climate and slower pace of life are also factors that have contributed to the increase in construction

Luxury apartments are popping up in Florida and other cities and states, with prices ranging from hundreds of thousands to millions of dollars.
The growth in luxury housing dates back to the 1980s, when interest and demand for homes in the United States began to rise.


The new construction is not just limited to housing: commercial development

A recent article by Jane Friedman states that the new construction boom in the United States is not limited to housing. According to the real estate industry, there’s a total of 1.5 million units of new construction activity going on right now, and it doesn’t appear to be slowing down anytime soon.
The boom has been fueled largely by high demand for housing, but there are other factors at play as well. The unemployment rate has dropped significantly since late 2008 and the stock market has still gained over 20% in 2015, despite many indicators pointing towards a decline in economic growth.
One of the most talked about factors behind this sudden development is the fact that more people are looking for affordable housing options and are moving out of state or across the country to do so. New construction projects have increased nearly four-fold since 2010, and some say that this trend may continue into 2022.
We don’t see anything particularly new about this boom; it’s just a continuation of what we’ve seen before and what has been happening for years now. But there is something more significant behind these numbers than one might think at first glance: this development isn’t just limited to housing; commercial development is also being fueled by new construction activity in major markets such as New York City (NYC). This year alone, commercial developments have already created more than 50,000 jobs – up from 35k jobs last year — when all projects were completed (not counting cranes). The number of retailers and restaurants opening each month continues to skyrocket as well.

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Luxury real estate in USA

The Covid pandemic has brought to light the growing rift between the rich and the poor

When it comes to real estate, the gap is widening. Wealth inequality is growing. And it’s not a new phenomenon, either. The gap between the rich and the poor has been widening for decades, and real estate is no exception.
As The New York Times describes it: “The rich are getting richer, but it is happening across the board, across all types of real estate. And as a result, the gap between the haves and have-nots is growing.”
What this means to you as a buyer or seller of real estate: if you are looking to buy or sell a property in 2022 with high prices in US cities – make sure you research that property with care because the demand for luxury residences will only increase relentlessly over time.
And when you go overseas – do some research because many places in international markets have high demand for luxury properties too.


The rich are getting richer

Luxury real estate is a different beast.
The rich are getting richer.
But the poor are getting poorer.
It wasn’t always this way.
In the early 1900s, the average person had $1,000 to live on. The rich were still poor, but they were many times richer than today’s rich.
Based on data from the Federal Reserve Bank of St. Louis, about 95% of Americans lived in suburbs or cities and only 10% lived in rural areas, indicating that many people didn’t live off farms and ranches as much as they do today. In houses which were similar to those our grandparents lived in, each person had an income that was roughly equal to what they made in their entire lives combined, meaning that almost everyone lived off a single income that they saved each month and shared with their family. It was believed that if you worked hard and saved money you would be able to get ahead and eventually become wealthy enough to buy land outside of your city or suburb where you could raise a family who would eventually be able to afford luxury real estate like those of today’s super rich. And when it came to home ownership, most people thought that people who grew up with luxury real estate paid more for their homes than those who grew up in rural areas because they had more money per square foot than folks living on farms or ranches did and could afford luxury homes in more expensive neighborhoods like Manhattan or New York City than those living on small farms where land is affordable only by working for them for years until they can pay a mortgage on their home (whereas most people who don’t own land cannot).
All of this changed when the Great Depression hit America in the 1930s and was followed by World War II during the 1940s and 1950s (and then again during the Vietnam War era during the 1960s). Many Americans lost jobs and went bankrupt while others worked long hours just trying to keep food on their table; it wasn’t uncommon for many families to lose up to 5 members of their immediate household at one point because nobody was able to pay rent any longer because there weren’t enough jobs out there anymore thanks to new factories being built all across America making things like steel products, automobiles, computers etc…


This is particularly evident in the US real estate market, where the sales of luxury homes are booming

For example, the rising prices in luxury real estate are a sign of a growing gap between rich and poor in the United States. The affluent spend more money on luxury real estate each year than the bottom 90 percent of households combined.
And how does this happen? In case of US real estate, it’s not hard to figure it out: it’s because rich people own property, and they have bought them at a discount. And then they do whatever they want with them. They renovate them. They turn them into castles…


The phenomenon is not confined to the US, however; it is happening all over the world

Luxury real estate is a growing phenomenon all over the world. Here are some interesting tidbits on this topic:
1. Luxury real estate is the fastest-growing segment of the real estate market, with an annual growth rate of 6.4% (i.e., $88 billion dollars) from 2010 to 2015, reported iPropertyMarket, a research firm based in London;
2. Luxury homes were responsible for 22% of the total sales volume in the US in 2020 and will continue to drive demand for luxury real estate throughout 2021 and 2022;
3. Production costs for luxury homes can range from a minimum of $250,000 to $1 million per unit (i.e., 6-flat), according to iPropertyMarket;
4. Sales volumes of luxury homes reached $216 billion in 2020 and are expected to reach $218 billion by 2022;
5. According to some US analyses, the price of luxury housing has increased by almost 55% since 2008, while average prices have increased by 45%. Average Manhattan rents have increased in line with average house prices, which suggests that competition among buyers is driving up prices; and


What is behind this trend?

Luxury real estate has been a subject of global interest for several years now. The increasing trend of luxury real estate will not be stopped anytime soon. Real estate prices in the US have been increasing at a slower pace but with the recent surge in luxury real estate sales, we might see an increase in wealth inequality and lower standards of living in the country.

Wealthy people are seen as having incredible lifestyles, which makes it easy for them to spend money on houses like this one:
It is no secret that luxury real estate is becoming increasingly rare. The rich are even richer and only those who have money can afford to buy these homes. But are these houses really worth more than they are worth?
The fact that a luxury mall opened in Dubai three years ago has made it likely that more people will become wealthy soon enough. We’ve already seen UBS raise its target price on Swiss Re by 7% due to strong demand for wealth management products from the Middle East market .


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