Jobs. Community and culture. Affordable luxury.
These are some of the main drivers propelling new cities onto the nation’s map of upscale real estate. Another facet is location – away from the coasts, which traditionally host the country’s prime housing, and toward middle America, which largely offers a shelter from high taxes and extortionate costs of living.
The emergence of the luxury segment in locales not previously associated with high-end homes has commanded industry and media attention for several years now. Last month Coldwell Banker Global Luxury acknowledged the steadfast rise of mid-major cities as high-end real estate hubs with its list of five “luxury markets to watch,” published in The Report 2020.
Together with the Institute for Luxury Home Marketing, the brokerage melded key real estate metrics (home price appreciation, inventory, days on the market and sales) with local economic factors (job and population growth) to determine the novel luxury markets poised to perform the strongest this year.
These markets are Boise, Idaho; Colorado Springs, Colorado; Charlotte, North Carolina; Fort Worth, Texas and Cincinnati, Ohio. All five of them also feature in U.S. News & World Report’s rankings of best cities to live (all ranked in the top 40 out of over 100 metros).
While two of these cities come relatively close to accommodating one million inhabitants in the Census Bureau’s 2018 estimates, neither of them actually reaches this mark. Three of the markets have populations of less than half a million.
These tallies, though, might be poised for an upward revision as major companies expand in the five cities, bringing young and often affluent workers. In Cincinnati, for instance, Macy’s, Procter & Gamble and GE are large employers, Coldwell Banker states in its report. Lured by tax incentives, tech companies are settling in Boise, while the banking industry is facilitating Charlotte’s growth.
“Charlotte is a very popular place for companies to relocate to because it’s easy to convince employees that Charlotte’s a fabulous place to live,” says Kim Grace, with Coldwell Banker Residential Brokerage in the city.
People come not only for the jobs, mild climate and low living expenses but also for the local lifestyle. Cincinnati, for example, has emerged as an LGBTQ-friendly community.
“We have a 100-point Equality Index,” says Julia Wesselkamper, agent with Coldwell Banker West Shell. “In other words, this city as a whole is committed to equality.”
What is luxury in these markets
Determined by price, the top tiers of these five housing markets denote affordable luxury. In all five cities, $750,000 characterizes high-end real estate.
“That does open up a wide range of people being able to purchase who may not be able to in other cities where the luxury market starts at a higher price point,” says Grace.
Heeding national trends in desirable home features and amenities, upscale real estate in Boise, Charlotte, Fort Worth, Colorado Springs and Cincinnati focuses on environmental stewardship and wellness.
“We’re seeing more lifestyle and fitness features, green spaces for pets, pools, spas, elegant master baths,” says Laurie Kelfer, with Coldwell Banker Realty in Fort Worth. “We’re even seeing gen-smart home that are designed to provide flexible space for multiple generations.”
Also popular are turnkey residences, which have either been extensively renovated or newly erected. In all cities, this dynamic has spurred the creation of luxury enclaves where new construction razes and replaces old properties or sprawls into the suburbs.
In Colorado Springs new builds also supply a modern alternative to the large McMansion properties that sprouted in the area two decades ago. While shoppers may seek smaller square footage, they often want to build on large lots suitable for outdoor activities.
“New construction in the luxury market is the strongest it’s ever really been,” says Camellia Coray, with Coldwell Banker Residential Brokerage in Colorado Springs. “It’s hasn’t been this strong since probably the early 2000s.”
Who is the luxury home buyer
One cohort of upscale home shoppers comprises millennials, who not only secure good employment but also the kind of abodes they would not be able to afford if they lived elsewhere.
“I think jobs and the renaissance of our urban neighborhoods are really attracting younger professionals,” to Cincinnati, says Wesselkamper. “That demographic enjoys [abodes in densely populated, cultural areas] for a while and then what they’re doing is they’re upsizing relatively speaking to larger homes still within the city limits.”
Empty nesters as well as retirees wishing to be closer to children and grandkids also flock to the five cities on Coldwell Banker’s “to watch” list.
“A lot of the older generation, the baby boomers that are moving here from other states are [attracted by the affordable luxury] and treating themselves for the hard work they’ve done over their life,” says Bob DeBolt, with Coldwell Banker Tomlinson Valley in Boise.
What does the future hold
While many of the country’s prime cities are seeing their luxury housing stock undergo price corrections in a time of slacking demand, agents in Boise, Cincinnati, Colorado Springs and Fort Worth describe their upscale real estate markets as healthy.
“It’s pretty strong and steady,” says Kelfer in Fort Worth. “People may take their time but it’s pretty consistent. Some properties may take a little longer than others but generally a lot of the properties are selling fairly close to asking price.”
In Charlotte, where about 60 people settle a day, according to the city’s planning department, Grace identifies a shortage of inventory – a challenge that rarely plagues the national luxury segment – as a rising hurdle.
“The influx of people moving to Charlotte and then people [already here] just moving up naturally into the luxury market make inventory our biggest issue right now,” she says.