If you haven't invested in luxury rentals just yet, now might be the time to think about it. According to new data, searches for luxe apartments are at an all-time high.
A recent analysis of Google Adwords (NASDAQ: GOOG) analytics shows that January 2021 saw a whopping 313,000 searches for "luxury apartments" -- up 46% for the year and nearly twice the levels seen in 2019.
It's pretty striking considering the economic struggles many Americans are facing these days. What's behind the trend, and should you move to leverage it? Let's dig in.
Is it worth it?
Luxe apartments are certainly in demand right now, but it's not because people have money to burn. In fact, many renters are actually looking for deals on these apartments.
It's true: According to the data, "affordable luxury apartment" searches were up considerably, too.
As the report put it, "Searches for affordable luxury apartments are at a record level as well, highlighting the fact that more and more middle-income renters are looking to take advantage of the low prices to rent homes they would otherwise not be able to afford."
Those lower prices are thanks to pandemic-driven moving trends, which have seen many city dwellers migrating outward -- toward suburbs and rural communities that offer more space.
"This mass suburban migration -- or the urban exodus -- has left metro area landlords, especially of high-end properties, desperately trying to incentivize to fill vacant properties and to compete with new luxury units coming onto the market every day," the report reads. "As prices are slashed, luxury apartments suddenly become affordable to a larger number of people, especially to those mid-range renters looking for good deals."
In short? You might not get much bang for your buck on these high-end properties right now. That's not to say cities won't bounce back in the future -- they likely will -- but it may require some patience before these investments really pay off.
Where to invest
If you do decide to pull the trigger on these in-demand luxury rentals, choose your market carefully. Search data shows that the highest demand for these properties is in Boston.
Other cities in the top 10 include:
At the state level, New York came in tops. Maryland, New Jersey, Massachusetts, Nevada, Texas, Georgia, Arizona, Virginia, and North Carolina rounded out the top 10.
Ready to invest?
Whether you invest in one of these cities or another, make sure to do your research first, and work with a local agent to get a pulse on the latest trends on the ground. Our city-by-city market reports (linked above) can help guide you as well.