LUXURY PORTFOLIO - Thoughts on Today's Luxury Buyer
I attended the annual Raveis convention a few weeks ago where I was able to listen to several interesting speakers. A senior representative with Luxury Portfolio, the largest global network of premier brokerage companies internationally and a partner of Raveis, made a compelling presentation on the current state and future trends of the luxury real estate market.
In the United States there are more affluent consumers than ever before. In 2017 personal wealth in the U.S. grew by 8.5 trillion followed by China at 1.7 trillion. America's financial wealth has risen 9% since 2016! You're not feeling it??? That's because the wealthiest Americans have benefited the most since the post recession economy. The top 1% owns 39% of the assets. With the phenomenal gains in the stock market combined with new legislation that favors the wealthy, this segment of the market will continue to grow at a record level. Today, the consumer in the million dollar market is between the ages of 25-49 and have inherited or plan to inherit significant wealth. They tend to be a more sophisticated buyer because many have also grown up with wealth. This is different than the “baby boomers” who established wealth while they may not have grown up with it.
The 50 and older luxury consumer is “downsizing” relatively speaking! They are giving away wealth while they are alive and want the freedom to travel with less real estate to worry about.
It's all about lifestyle. 54% of today's buyers want an urban location. Whether you are a young buyer or a baby boomer, people are buying a lifestyle; preferably close to great restaurants and shops.
There doesn't seem to be a particular style home buyers are looking for, but the interior trends are consistent with clean lines and open spaces. While they seek out an open floor plan, they want at least one interior space that allows for privacy. We see this trend for young buyers in general.
These are some of the essential amenities wealthy buyers want in order of importance:
- Close to restaurants
- Great outdoor space with a patio, terrace or outdoor kitchen
- Commercial grade appliances
Another trend, buyers enjoy are home fitness/ pool or spa and in-home technology for efficient HVAC, doors and windows, smart phone control and water efficient landscaping. These are not must haves for the average consumer, but they are considered a valuable asset in a home. If you are thinking about adding any of these features to increase the enjoyment of your property, they may prove to be valued enhancements when you go to sell in the future.
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