Market Insights: Post-Election Analysis and Luxury Real Estate Trends

As we navigate the outcome of the recent election, it's essential to understand how the shifting political landscape could shape the luxury real estate market in the months ahead. 

These results present new opportunities for HNW owners, buyers and investors looking to acquire or liquidate luxury real estate. 

Here’s what you need to know about the key factors that may affect our luxury market:

1. Impact of Policy Changes

The new administration's approach to economic policy, particularly with potential tax cuts for high-income earners and incentives for real estate investment, will be crucial. Revisions to capital gains tax, easing of zoning regulations and land-use policies could make luxury real estate an even more attractive asset class. 

High net-worth individuals are especially vigilant about changes in tax law, and the right policy adjustments could spark a surge in luxury property acquisitions.

2. Boost in Economic Confidence

We're already seeing renewed interest in the Paradise Valley market, with 17 homes priced over $2 million going under contract since November 6th. This is a promising indicator of consumer confidence returning. Buyers at the luxury level often respond to broader economic stability—job growth, controlled inflation, and positive sentiment following the election. Should the administration signal a commitment to continued growth and stability, we can expect this momentum to build.

3. Interest Rates: A Game-Changer

Another immediate positive indicator was the Federal Reserve’s decision to cut interest rates by a quarter point on November 7th. While affluent buyers are less impacted by rate fluctuations, lower borrowing costs can still drive interest, particularly among those looking to leverage financing for real estate investments. If the trend of rate cuts continues, it could unlock additional purchasing power and accelerate activity in the ultra-luxury segment.

4. Investment Flow into Real Estate

As the new administration embraces a “Peace through Strength” strategy, we may see increased confidence among international investors. A stable geopolitical environment, coupled with a strong U.S. dollar, could draw more foreign capital into the luxury real estate market, especially in key areas like Scottsdale and Paradise Valley.

5. Global Market Dynamics

The stability of international relations plays a significant role in the performance of the U.S. luxury market. A diplomatic approach that fosters strong global trade ties could boost interest from affluent buyers in Europe, Asia, and the Middle East. If the administration successfully establishes itself as a reliable partner on the world stage, we may see an influx of international buyers seeking to invest in U.S. properties as a secure and profitable option.

6. Short-Term vs. Long-Term Effects

While immediate market reactions are often driven by sentiment, the actual impact of policy changes will unfold over time. As economic policies take effect—particularly those focused on growth, job creation, or real estate tax incentives—we expect to see increased demand for luxury properties. The immediate effect of high-value homes going under contract is an early indicator, suggesting that the market is poised for a strong performance if these favorable conditions persist.

Looking Ahead

The combination of lower interest rates, favorable economic policies, and a stabilized global landscape sets the stage for a robust luxury real estate market.  As these factors converge, we anticipate continued demand, making this an opportune time for sellers, buyers and investors to engage.

The uptick we're currently witnessing, especially in Paradise Valley, underscores the resilience and appeal of high-end properties in the Valley. These positive indicators are aligning with the benefits of our seasonal market.

If you’ve considered downsizing, a second home, or expanding your real estate portfolio, Murphy Group Advisors is here to streamline your goals.

As part of the exclusive, Sotheby’s Preferred Advisor Network (SPAN), our reach spans the globe, providing unparalleled access to premier properties and expert advisors, no matter where in the World you focus your real estate endeavors.

Let’s discuss your plans and explore how we can help you capitalize on the current market landscape.

Respectfully,

Amy Murphy
Murphy Group Advisors
Russ Lyon Sotheby’s International Realty
Amy@AmyMurphy.com
480-269-2830