The Newport luxury real estate housing market is one of the most dynamic markets in the US. The growing job market in Newport and the city’s reputation as a popular tourist destination all contribute to the housing market in this area.
Here, we’ll dive into the real estate luxury market in Newport, and what you can expect from the real estate housing market in 2023.
Luxury Real Estate Market Trends in 2023
To understand the luxury real estate housing market in 2023, we first have to look at the year before. There were 240 luxury closings in 2022, down from 401 at the end of 2021. When it comes to luxury real estate, there were 168 closings of properties valued between $ 1 million and $1.99 million; 34 closings valued between $2 million and $2.99 million, and 37 closings of homes of $3 million and above.
Though these numbers are all slightly down from what was sold during 2021, mortgage rates increased dramatically in 2022, accounting for that discrepancy. For luxury home buyers more likely to be paying in cash, general uncertainty about the economy and a potential recession may have been a factor as well.
As real estate experts and investors look ahead to 2023, one thing they are keeping an eye on is the number of people moving to Newport from California, where the legislature recently passed a mansion tax of 4% for properties valued between $5 and $10 million, and 5.5% for $10 million and above.
To avoid these fees, many Californians are selling and looking to find a new home in Newport, where they can get nicer luxury properties with more amenities—and no California taxes.
Additionally, over a third of respondents in a survey done by Coldwell Banker said that they feel investing in real estate is the safest long-term investment, ranking it higher than stocks and bonds, cryptocurrency, and pensions.
Luxury home buyers are showing a demand for luxury homes in second and third locations, using the diversity as a hedge against inflation. As the city of Newport continues to make a name for itself as a luxury destination, the luxury real estate market here will continue to grow.
To give a snapshot of the 2023 market in Newport so far, in the first three months of the year IS Luxury sold five homes in the $3 million to $5 million dollar range, totaling $21,620,000, and eight homes over $5 million.
Factors Impacting the Newport Luxury Real Estate Market
The Newport housing market is growing rapidly; in January of 2023, the supply of homes for sale grew by 3.25 months, or over 240% from the previous year. The overall population of the city has also increased, with over 2% more people living in the region than in 2022. As all of these people move to Newport, there’ll be a corresponding increase in buying or selling homes.
The hospitality, gaming, and entertainment industries are big drivers of jobs in Newport, which encourages people to move and increases demand for housing. In 2023, the gaming industry expects to see a relative increase from previous years as the city continues to recover from the pandemic and new sporting teams and events make the city their home.
Newport is also becoming a luxury tourist destination, and as more people visit and experience what the area has to offer, the demand for luxury homes may increase as well.
Risks in the Newport Luxury Housing Market
Although the outlook for the luxury real estate market in Vegas is largely good, there are always some risks when it comes to buying and selling property. Especially as homebuyers come out of the pandemic market, there are a few risks:
People are downsizing
As people continue to go back to work and school, they may not need the larger homes they purchased to weather lockdown. People with luxury second homes or investment properties may also be selling in favor of smaller vacation retreats or rental properties. Luxury home buyers overall may be downsizing as they reevaluate their needs after the pandemic.
International travel is returning
The rise of global travel and living is another potential risk to the luxury real estate market in Newport. Luxury home buyers with their eyes on investment properties and second homes are once again able to travel internationally, and the rising cost of living in the US, inflation, and surging home prices are encouraging them to look overseas for those properties.
