Trends have remained anything but predictable in the housing sector over the last six years. In the wake of the decline, we have seen property values shift between each end of the price spectrum and interest rates reach near record lows. However, as perhaps one of the most predictable variables associated with the housing sector, younger generations are finding themselves increasingly in control of the luxury market.
According to a survey conducted by Coldwell Banker, in association with the Luxury Institute, wealthy younger buyers are “driving the luxury market.” Subsequently, it is more apparent that the younger generations of wealthy individuals are willing to pay more than similar wealthy buyers ages 55 and older.
The survey was specifically dedicated to Americans that were 21 and older. However, to be included in the study, each participant must receive a minimum gross annual household income of $250,000. Of those surveyed, 43% admitted to considering purchasing a home within the next year. Conversely, only 21% of those over the age of 55 are currently considering purchasing a property. Perhaps even more importantly, younger buyers reportedly spent an average of $2.1 million on their most recent property, approximately twice as much as those in the older study group.
“Luxury homes are for more than successful and retired empty nesters,” says Milton Pedraza, CEO of the Luxury Institute. “Today’s luxury buyer is both dynamic and diverse, and it’s reflected in the homes and products they’re buying.”
According to real estate professionals and brokers who spoke at the recent National Association of Real Estate Editors conference, factors driving luxury home sales are as follows:
- Low mortgage rates
- Rising consumer confidence
- Cash buyers
- International buyers
However, young buyers are increasingly interested in houses that feature “luxurious” amenities. Among the features in the luxury market are outdoor kitchens boasting spacious patios and home spas. These buyers are also drawn to “properties with a story—say, a famous former owner or a renowned architect,” The Wall Street Journal reports. Prospective buyers that are both young and wealthy are significantly more likely to purchase a house with these amenities than those over the age of 55. Other amenities that younger clientele may desire are:
- A pool
- An outdoor kitchen
- A home gym
- A home theater
- A wine cellar
- Houses with 4 or more garages
- A house that is green or LEED-certified
“This trend toward younger luxury buyers is leading a change in desired home amenities,” says Betty Graham, president of Coldwell Banker Previews International NRT. “Whether these younger buyers have young families or are single without children, they are looking for homes that fit their active and unique lifestyle.”