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Luxury Trend Watch: The ‘Lock and Leave’ Lifestyle

Imagine a shiny brand-new luxury condo in a desert paradise, where you can jet off to the South of France for a month and know that your home is safe, secure and maintained while you’re gone. That is the lifestyle many affluent homebuyers want these days, according to Wendy Walker, a leading sales associate affiliated with Coldwell Banker Residential Brokerage in Arizona’s Paradise Valley.

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6431 E Cactus Wren Road | Paradise Valley, AZ 85253 | $4,795,000 USD

“It’s not just happening in Phoenix, which tends to be a second home market,” reveals the top-producing industry veteran and elite member of the Coldwell Banker Previews International® program. “It’s happening everywhere. I was just in New York City for a conference with many luxury real estate agents who represent the top 1% in the country, and we all agreed that the major trend driving the luxury real estate market right now is ‘the lock and leave lifestyle.’ High net-worth individuals want less maintenance, more amenities, quality finishes and smaller square footage.”

It goes against conventional wisdom — that bigger is better in luxury — especially in an era when we have $150 million residences in Holmby Hills and $90 million estates in Massachusetts weighing in at 30,000 square feet and 26,000 square feet, respectively. What in the world is driving the “lock and leave” trend? We recently sat down with Walker to discuss the demographic shifts responsible for the phenomenon and what it means for the future of luxury real estate buying and selling.

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Wendy Walker of Coldwell Banker Residential Brokerage, Paradise Valley

Previews Inside Out What do you think is primarily driving the shift towards a ‘lock and leave’ lifestyle in your market? 

Wendy Walker Homeowners who have larger, older estate properties now want less maintenance, less square footage, more amenities and new high-end finishes. They generally don’t have the need for the square footage anymore. They also want to minimize the upkeep and maintenance expenses associated with the larger estates and the grounds. Likewise, many buyers in Phoenix tend to be baby boomers, snowbirds and/or seasonal visitors, so they generally own a home already or even multiple homes, and they tend to enjoy travel. So, the lock and leave lifestyle is very attractive to them. Another consideration, whether Phoenix or elsewhere, is that also millennials prefer the lock and leave lifestyle. They don’t want the upkeep either, nor do they want to be bound to a larger property. They also enjoy the idea of travel and being on the go. 

Previews Inside Out What kinds of properties are the ‘lock and leavers’ looking for right now?

Wendy Walker Properties that have amenities, such as a valet, concierge service, restaurants, property shopping, golf, workout facilities, spa or pool onsite, are a big draw in my marketplace. Since we have a lot of second homeowners, they may be flying in from other cities and they don’t want to drive a great distance to enjoy the necessities. They just want to land and go straight to their house, park their car and have the walkability to the things they enjoy.

In general, there are two types of properties: high-end condos and luxury patio homes. The high-rise condos come with all of the luxury amenities you can imagine — like the new Ritz-Carlton Residences, which is on track for a 2019 delivery, and Mountain Shadows, which is also under construction with a 2017 delivery. Patio homes have a little more space than a condo, but are generally not attached. It’s still a smaller property — usually gated with an HOA. Interestingly, it is extremely difficult to sell a two-story with stairs in my marketplace. If it does have two stories, it must have an elevator. I think this is due to the demographics here, which is very attractive to retirees.

Previews Inside Out You mentioned that many of your clients also own multiple properties. How does that factor into their buying decisions? 

Wendy Walker They want an easy lifestyle with no maintenance. They are not here year-round — so they are really drawn to properties where the maintenance is included. As a result, we’re seeing a drastic increase in HOA dues. It is not uncommon now to see HOA dues at $1,500 to $2,000 per month. Even though those prices sound astronomical, it’s not all that outrageous — when you consider that the fees generally incorporate water, electric, concierge services, a pool, the grounds and access to all of those amenities. It’s not all that outrageous when you compare it to what they were spending before on the maintenance of their larger estate. Additionally, our marketplace is inexpensive from a tax perspective. So, they’re not paying much in taxes and they’re’ still getting the benefit of a true luxury lifestyle.

Previews Inside Out This trend appears to parallel the findings from the last few Previews’ luxury market surveys, which have found that affluent buyers’ increasing mobility (i.e. ability to live anywhere) has made lifestyle a more important factor than location. Would you agree with that?

Wendy Walker Absolutely. I would agree that more affluent buyers are buying based on lifestyle today. New, high quality finishes and access to amenities are the key drivers of this trend. Affluent buyers in my marketplace want to have access to a pool, but not the upkeep of pool. They want a view, but they don’t need to live on an acre for that view. They want to be able to walk to shopping and restaurants. They are also very much driven by quality finishes. Before, “value” might have been defined by acreage, status or the size of your house, but now people are willing to pay a higher price per square foot if the lifestyle and quality is there. Another interesting contributing factor is that people are having fewer children and they’re having them later in life. So, we’re also seeing millennials being more driven by location as opposed to where the job opportunities are. Before, a job would transfer them to a city. Now they’re saying, “I want to live in Portland, and I will find a job there.” It’s quite a reversal from years past.

Previews Inside Out All of this brings up a challenge for the listing agent. How do you market these older, larger estates? 

Wendy Walker I’m really selective when it comes to listing the larger estate properties. I only take one or two at a time, knowing that they will take longer to sell. People just don’t want to purchase the older estates and remodel them anymore — so the buyer pool today is much smaller. If it’s 8,000 square feet and brand-new, it will still sell. But if it’s 8,000 square feet with 1985 décor and appliances? That is a real challenge because there is almost no demographic for that type of property. It almost becomes land value at that point, and you’re marketing to developers and builders who may want to split up the property into multiple acres and build something new on the land vs. an end user.

For instance, I have a $5 million listing right now in Paradise Valley that is almost 12,000 square feet, built in 1983. While the property does have some really beautiful features — it’s set on over two acres with beautiful grounds in an A+ location — the owner spent about $1 million on renovations to bring it up to date. However, buyer feedback has been that it is still being viewed as an older home and they are comparing it to other homes on the market that are brand-new. They’re saying, “What can I get for $5 million that is brand-new vs. a property that is 30 years old?”

I think it’s really important to set expectations upfront with the seller. Then you have to determine who your demographic will be for that particular property. Does it have a lot of garages? Does it have equestrian facilities? Was it built by a famous architect? You can use those “stories” as part of your marketing strategy, but you have to seek out and define who that very narrow group of potential buyers will really be, and strategically market to reach that demographic.

Previews Inside Out Do you have any last words of advice for an affluent seller who is considering listing an older estate home? 

Wendy Walker Be very realistic about who the demographic really is for the property, and understand that the demographic is narrowing — especially in an affluent area where the homeowners are in the baby boomer stage. The natural historical evolution of has shifted, so that the buyers who were once attracted to those estate homes are now attracted to the very same properties that the sellers are: new construction, new finishes, less maintenance, a lock and leave lifestyle. Sellers also need to be patient and realistic with regards to price, and realize that larger square footage does not necessarily equate to higher dollars anymore. It is truly a trend that I do not see changing anytime soon.

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Luxury Trend Watch: The ‘Lock and Leave’ Lifestyle

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