Posted on 19 Jan
With unprecedented demand and record low inventory being the theme of the current global real estate climate, the question everyone wants to know: is relief on the way? The Agency Development Group represents a multi-billion dollar portfolio of new construction properties all over the world, from urban developments and mixed-use offerings to luxury resort residences and estate communities. The team, led by Managing Partner Mike Leipart, advises developers through the rapidly shifting needs, wants and demographics of their target buyers, which shifted at a much quicker pace than usual over the last year. They weighed in on the market of 2021 and what to expect in 2022 in The Agency’s newly released Red Paper 2021 Annual Market Report.
“2021 was the year to play catch-up for developers and home builders across the marketplace. Demand pent up fast and furiously during the pandemic-induced, nine-month pause in construction,” Mike explained. “The year brought little relief as developers faced rising construction costs, labor shortages and supply chain lags. Developers had to shift quickly, and those with available inventory won the day,” he added.
“Several trends emerged as buyers sought more turnkey, concierge service offerings, both for their primary and vacation homes,” said Managing Director Leo Medeiros, the newest addition to The Agency Development Group executive team. Joining The Agency from Compass and based on the West Coast, Leo has led sales for some of the most prominent and influential new real estate developments in the United States, including 181 Fremont in San Francisco.
“Hotel brands are increasingly stepping into the residential market, building highly serviced homes without an attached hotel component,” Leo added. Among the other trends reported in The Red Paper by the development team was a buyer demand for onsite dining, leading restaurant brands to wade into the residential business.
After years of discussion, tech and energy efficient integrations came to life in new residential projects. Buyers cared deeply about the health of their living space, wanting optimal airflow and resource efficiency. Another trend here to stay: Buyers are more informed and hyper-connected.
Savvy developers responded by creating apps for their buildings so owners could unlock the door for their housekeeper, call the valet and schedule food delivery all at the touch of a button. As for the homes themselves, buyers sought larger floor plans, an elevated level of finishes and expanded outdoor living spaces.
Still untethered from their places of employment, buyers could explore new locations and split their time, spending summer in the mountains and winter by the beach. With multiple properties, they craved less upkeep—another reason why turnkey offerings were the star of the show. Investment properties also made sense, as the shortage in housing sent rent prices in the most desirable markets soaring.
As for the year ahead, relief in construction lags and supply chain delays is hoped for and anticipated, while prices may not budge much. The new development sector will continue to evolve out of pandemic norms, seeing a return in demand for townhomes, condos and apartments.
“Each regional housing market is slightly different, with the local employment, job growth and housing stock as factors,” Leo explained. “Overall, most markets will continue to show strength with some slight tapering based on the Fed’s interest rate increases in 2022. Interesting housing markets to watch for growth in 2022 include Bellevue, Washington, Austin, Texas and Las Vegas, Nevada.”
Among new product coming to high-demand markets such as Los Angeles, Las Vegas and the Mexican Caribbean are three properties represented by The Agency Development Group: Mandarin Oriental Residences Beverly Hills, Ascaya and Mayakoba.