The prices of average houses continue skyrocketing. You can constantly find some information about it on TV, radio, social media feed — everywhere. And while you’re busy with your studies, planning to get a degree, or start a career, one thought starts bugging you, will you be able to buy or rent a house? 

House pricing is a hot topic and one that may affect your own life. Even if you tend to order essays from some do my paper for me services, an essay about house pricing would probably be the one you do on your own. As with all the news around, you're becoming an expert on the supply and demand dichotomy and other reasons behind the housing crisis. 

You can also know several solutions, like:

• Financial incentives
• Flexible immigration policies
• Urbanization 

Financial incentives allow the stimulation of both supply and demand. Low-interest loans and tax abatements can fix the issue. Immigrants, more often than not, are the construction labor force. More houses mean lower prices and more buyers. Urbanizing the outskirts makes them a more desired place to buy and rent houses, giving more space for the real estate business. 

But not all parts of the real estate market are affected by the housing crisis—the luxury real estate business. While the low- and middle-price real estate markets continue to experience a decrease, their luxury counterpart grows approximately 15% a year. Since 2008, the number of houses in low- and middle-price markets has continued to fall while the prices continue to rise. 

The luxury real estate market stands strong. But what is the luxury real estate market? It’s hard to pinpoint what is considered to be luxury, as the understanding of the term may vary from coast to coast and state to state. But, generally, any property priced over $1 million can be considered a luxury. So, what are the trends of the luxury real estate market trends in 2022 that keep it more alive than its counterparts?

1. 1. Selling Fast

The low- and middle-priced houses, nowadays, are mainly set for rent. But the luxury real estate market has homes for sale only. And, surprisingly, the time that the houses remain on sale is getting shorter. On average, in 2021, luxury houses spent between thirty and forty days on sale before being sold. For 2022, that time frame seems like an eternity. 

Luxury houses haven’t spent more than eleven days on sale in 2022. Considering that the luxury estate market operates with a smaller segment of the population, it outpaces the market of affordable houses. And there are several explanations for it. Namely, wealthy Americans are less affected by the job market volatility. 

1. 2. Sizes and Prices Don’t Correlate

While you can expect the price to depend on the size of the property, they don’t correlate in reality. A lot of things depend on the location. And the location may mean everything from state to district. For example, you can purchase 1000 square feet (92.9 m²) property for $1 million in Miami. In New York City, however, you can purchase 360 square feet (33.45 m²) property for the same price. 

Basically, you can observe the same absence of correlation in the affordable house market. That also explains why a lot of people move from state to state. One state can offer you more buying power and tax advantages than another. And, as working remotely stopped being a trend and turned into a necessity, during the COVID-19 pandemic, people are more eager to move to a state where you can get a bigger property for a lower price. 

1. 3. The Booming South

Since the lockdowns, the luxury estate market has been booming in the South. For example, nearly 25% of homes sold in Texas between 2020 and 2022 were luxury houses. During the same two-year frame, Miami saw a massive increase in luxury property sales. It grew 101.1% compared to 2019. The reason behind the booming luxury estate market in the southern states is lower prices. 

Another attractive aspect of states like Texas and Florida is the absence of income tax. Those are the tax benefits that wealthy buyers often follow. And the construction is also better developed in the South, thanks to the comparatively lower construction prices. Here, albeit in the luxury real estate market, you can see how financial incentives, as well as urbanization, work. 

1. 4. The Rise of Second Homeownership

The pre-pandemic world was different. People were tied to their workplace physically. That often prevented them from purchasing a second home. Who needs a property that most likely will stay vacant, thus turning into a useless extra expense? But COVID-19 changed things drastically, and more millionaires are willing to have a second home. 

No longer tied to a specific location, wealthy people no longer fear that their second property will stay inhabitant most of the year. The coastal and vacation towns in the mountains are slowly turning into workation ones. Second homeownership is already on the rise, and luxury real estate market experts expect this tendency to continue growing in the next half a decade. 

1. 5. Luxury Real Estate Market Prices Grow as Well

Not only low- and middle-price real estate market prices are going through the roof. Their luxury counterparts also experience an increase in prices. The prices of luxury homes increased up to 15% in the last two years. But that didn’t prevent people from buying luxury properties. Between 2020 and 2022, the sales of houses priced higher than $1 million jumped by 81%. 

Closing Thoughts

All in all, no matter how the prices grow, it doesn’t seem to discourage wealthy Americans from purchasing luxury properties. Houses spend less time on sale, and millionaires tend to buy second homes. But, the location of the properties shows that things like tax incentives and urbanization of the outskirts do work.

Who knows, maybe the same initiatives will be applied everywhere, and it will finally put an end to the housing crisis in all segments of the real estate market. But, until then, you might as well start thinking about becoming a luxury real estate agent.