A luxury home is something you know you deserve. It’s a reward for a lifetime of hard work and achievements, or a necessity that allows you all the comfort and conveniences you need in life.
In addition, luxury real estate is always considered a good investment, whether you make it your primary or secondary home, or put it on the rental market. Historically, luxury homes rebound faster from economic downturns than the rest of the real estate market. They also tend to appreciate in value over time, even when they’re also vulnerable to short-term volatilities in prices. And with more people around the world gaining affluence today more than ever before, the market for high end real estate is also expanding significantly.
As with the rest of the real estate market, the luxury sector is going through some transitions in response to changing market dynamics. To guide you in managing your investment, keep yourself abreast of the latest developments in these increasingly complex conditions.
Who are buying luxury homes today?
In a 2018 survey conducted by Inman.com among luxury real estate agents across the US, it was revealed that the largest high end homebuyers are the following:
- Generation X, or those 38 to 53 years old, which make up the majority (49.12%)
- Baby Boomers or 54 to 72 year olds (33.33%)
- Millennials or 22 to 37 year olds (15.79%)
Also in 2018, Luxury Portfolio International came up with the research paper, The Rise of the New Aristocracy in 2018, which states that personal wealth around the world has been growing significantly in recent years. The United States was the growth leader in 2017, followed by China.
New wealth in the US was coming either from inheritance or through the survey respondents’ own success, particularly in the field of technology. This has resulted in the rise of the “New Aristocracy” composed mainly of Millennials and younger Generation Xers. They’re the latest to enter into the luxury real estate market, and their distinct take and preferences in home buying are influencing the market significantly.
What are today’s luxury buyers looking for in a home?
- The size
While there’s still a significant demand for expansive estates with all the bells and whistles, large acreages are becoming less important in the luxury market. That said, size is still a major consideration, with many homebuyers looking for a property that can accommodate a multi-generational family. This usually means a home with four or more bedrooms and three or more bathrooms.
Younger homebuyers are showing a preference for smaller properties with great locations and amenities. This is also the trend for Baby Boomers, who are looking for living spaces that are easier to manage but with all the conveniences they want in their retirement years.
- The location
Luxury buyers are interested in properties with a great location, but what defines a “great location” depends on personal preferences, so it’s widely varied. Much of it is related to the buyers’ lifestyle choices, as well as to the nature and location of their work.
The top location choices include:
- Suburban – In the Inman research, almost 50% of those surveyed said they prefer a home in the suburbs, where the atmosphere is more tranquil and residential, and there are more open spaces and access to good schools
- Waterfront – About 23% of those surveyed preferred a home near a beach, lake, or other bodies of water
- Urban – Around 16% said they prefer to live in an urban environment, close to offices, restaurants, entertainment centers, and other services
- Architecture and property type
According to the Inman survey, most high-end buyers are looking for modern luxury homes for sale. Contemporary is the most popular choice both in architectural style and interior aesthetics. However, a good number still prefer the traditional style.
Among the “New Aristocracy”, while the modern aesthetic is a top choice, classic and traditional architectural styles, such as Victorian, Tudor, and Brick Georgian, are also highly preferred.
Single-family homes remain the preferred housing type, but lofts are also popular with the “New Aristocracy.”
- Features and amenities
As has always been the case, luxury homebuyers today are looking for exclusivity, privacy, security, and convenience. However, changing lifestyle priorities are also changing many of the features sought by high-end home buyers.
Smart home technology tops the list of preferred home features, particularly among younger buyers. With their energy-efficiency benefits, they’re seen as essential to a sustainable lifestyle.
Other sought-after features and amenities include:
- Open floor plans
- Fitness rooms
- Swimming pools and grottos
- Indoor movie theater or entertainment center
- Gourmet kitchens
- Outdoor living and entertaining amenities, including outdoor kitchens
Learn more about investing in luxury homes with me, James Weekley
Thinking of investing in Malibu luxury real estate or a high end home in other Southern California communities? I can guide you through the complexities of today’s market and help you succeed. Call me at 310.401.0901, or send an email to james(at)JamesWeekley(dotted)com