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Luxury homebuyers gravitating to states with no income tax: Sotheby's International Realty CEO

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Yahoo Finance’s Alexis Christoforous and Philip White, President and CEO of Sotheby's International Realty, discuss the real estate market amid the pandemic.

Video Transcript

ALEXIS CHRISTOFOROUS: The housing market has been one of the few bright spots throughout the pandemic, but rising mortgage rates could start to put the brakes on home sales. According to Freddy Mac, the average rate for a 30-year mortgage topped 3% this past week for the first time since July. But that may not matter so much for the very wealthy. Sotheby's is out with its 2021 outlook for the luxury real estate market. And joining me now is Phillip White, president and CEO of Sotheby's International Realty.

Philip, good to have you here. I thought there were lots of great nuggets in this report that was just out. And, you know, we've heard a lot of talk about this mass exodus from big cities to the suburbs to secondary housing markets. Did you see that in the luxury real estate market?

PHILIP WHITE: Yes, Alexis, thanks for having me. We did, in fact, see that, people moving from New York to the Hamptons, from New York to Greenwich, you know, from Boston to Cape Cod, to Martha's Vineyard, to Nantucket. That doesn't mean that they're selling their properties, their in-town properties, however. We really haven't seen a spike in that respect.

ALEXIS CHRISTOFOROUS: So they held on to the city property. They just tacked on another property. Where were they looking? Where were some of the hot geographic areas?

PHILIP WHITE: Well, the ones I just mentioned. But in addition to that, also, they're gravitating to the states with no income tax. You know, Florida, Wyoming, Nevada, those areas were extremely hot. The Rocky Mountains, whether that's Denver out to Vail, where we had a record breaking sale in the summer, Park City, Utah, Jackson Hole, Wyoming, just to name a few. So those are really strong markets here in the United States. There are a lot of strong markets internationally as well.

ALEXIS CHRISTOFOROUS: Yeah, I also saw in the report sales of million dollar single family homes in Palm Beach County more than doubled. So lots of folks going there, too, and again, a state, as you say, that's favorable when it comes to taxes. What about amenities? What are sort of the high end home buyers looking for out of their property? Because it looks to me, at least from this report, that a lot of them are buying, like, these compounds, where it's at least an acre or more.

PHILIP WHITE: Yeah, exactly, Alexis. You know, we talk about big is better. And that's clearly a trend that we're seeing. You know, they're looking for houses with gyms. They couldn't go to the gyms during the lockdown. They're looking for gourmet kitchens. They're looking for pools. They're looking for spas. They're looking for Zoom rooms. They're looking for, in some cases, multiple home offices.

You know, one of the big drivers here is this whole work from home boom, where people can relocate, whether it's St. Barts or Aspen, and really work from there. And that's what's really has a lot of impact in terms of driving, you know, the demand for luxury housing at this point.