How do affluent consumers view their real estate investments now and in the future? Who is buying luxury real estate and why? Coldwell Banker Previews International® collaborated with the Luxury® Institute LLC to answer some of those questions in the Fall 2013 Luxury Market Report.
According to the survey of Americans with a minimum gross annual household income of $250,000, most of today’s affluent consumers report that they own at least one home and express confidence in the value of owning real estate. While location is still the most important deciding factor in a home purchase, one in five affluent consumers and 24% of ultra affluent consumers say that they are not limited by geography and have the freedom to purchase a property that truly fits their lifestyle.
“It seems that more affluent consumers are basing their home purchase decisions on how they want live as opposed to where their workplace is located,” says Betty Graham, president of Previews®.
Wealthy young buyers are also making inroads in the luxury real estate market, and they are willing to pay more to do so. The survey found that 43% of younger wealthy consumers are considering the purchase of residential property in the next 12 months, compared to 21% of those aged 55 and older. On average, these younger wealthy consumers spent more than $2.11 million on their most recent purchase of residential property, more than twice the average amount spent by older and similarly wealthy luxury buyers, which was $1.07 million. Adds Graham: “This shift toward younger luxury buyers is driving a similar change in desired home amenities. Whether these younger buyers have young families or are single without children, they are looking for homes that fit their active and unique lifestyle.”
So what are they buying? The survey finds:
- Younger buyers are significantly more likely than wealthy buyers aged 55 and older to want homes with amenities such as a pool, outdoor kitchen, home gym, home theater, wine cellar and four or more garages.
- Wealthy consumers under age 55 are more than twice as likely to value green or LEED-certified residential properties than their older counterparts (23% compared to 11%).
- Open floor plans and a fully automated and wired home environment are the top features wealthy consumers, regardless of age, say have become important to them in the last three years. Less importance is placed on staff quarters, tennis/sports courts and separate catering kitchens.
Full findings of the Previews Wealthy Consumer Survey can be found by downloading the report above.