Here’s How Vibrant Art Scenes Can Boost Luxury Real Estate Markets

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A bustling, big-time art scene not only enriches the local community, but it can do a heck of a lot to boost the luxury real estate market too, according to a new report. 

Sotheby’s International Realty just published its 2024 Mid-Year Luxury Outlook, which found that the presence of cultural institutions, including museums, festivals, and murals, is strongly associated with the increase of property values in cities across the world. In New York, “luxury residences have built up around cultural concepts such as public spaces, the arts, and restaurants,” explained Stan Ponte, senior global real estate advisor for Sotheby’s International Realty—East Side Manhattan Brokerage. 

Take the High Line, for example, which now hangs over Manhattan’s West Side. The previously abandoned railway was reborn in 2006 as a high-design private park, and since then, it has transformed the area into one of the city’s most sought-after locales. In 2024, residential prices in the Meatpacking District soared to as high as $6,000 per square foot. “When the High Line opened in 2009, the average condo price was $1,596,279,” Ponte added. “In 2023, the average price stood at $4,345,027.”

Recently, rental costs in Manhattan have hit an all-time high, according to new market research from The Corcoran Group. In June 2024, Manhattan rents skyrocketed to $4,667 per month, surpassing the previous peak reached in April 2024 ($4,595). Indeed, increases in residential property prices seem to be the running trend across major luxury hubs that have embraced the addition of cultural institutions and events. For example, a similar scenario played out in Beverly Hills, where the average price per square foot is $1,487, compared to a city-wide average of $718, as noted in the report. Marc Noah, real estate advisor for Sotheby’s International Realty—Beverly Hills Brokerage, said that the 90210 ZIP code specifically still sees the highest demand for luxury properties, which he attributes to its proximity to LACMA, the Petersen Automotive Museum, and the Hammer.  

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Over in Miami, cultural events like Art Basel, which began in 2002, have contributed an estimated $500 million to the local economy. In addition, the city’s glitzy Design District has helped the area evolve into a sunny mecca for fashion, art, and architecture. “Art Basel is a perfect fit for Miami’s eclectic tastes,” explained ONE Sotheby’s International Realty agent Elena Bluntzer. “Many of my clients are serious art collectors, so it’s crucial to find properties that complement and showcase their collections. Fortunately, Miami offers an abundance of such homes, making it an ideal market for art enthusiasts.” 

On that note, the artwork on display inside a home can also be a key ingredient in securing high-profile sales. Everything from paintings to sculptures can raise the value of a property, and it’s not uncommon for collectors to be the owners and sellers of multimillion-dollar residences. “It is very typical for owners of homes worth $10 million and higher to be collectors,” Michael Carucci, executive vice president of Gibson Sotheby’s International Realty in Boston, said in the report.  

To draw in deep-pocketed buyers, brokers will even go as far as to decorate an abode like a gallery with works from legends like Damien Hirst and Robert Rauschenberg. “There is no better way to create environments that resonate with discerning buyers than to showcase a carefully curated art collection,” added Tania Toubba, real estate advisor at Sotheby’s International Realty—San Francisco Brokerage.