Monday, July 6, 2015

What luxury homebuyers are looking for, version 20.15.

Surveys show that today's highly affluent homebuyer is looking for some things old and some things new, like technology, green homes, and outdoor living.

As our economy climbed out of the doldrums of recession into today’s landscape of bluer skies and greener pastures, the luxury real estate market not only recovered, but exploded. In fact, sales of the most expensive 1% of homes in the U.S. are up 21.1% over the past year, following up on a 35.7% increase in 2013-14.

And with an estimated 9 million millionaires in the U.S. – many of them self made and enjoying financial bounty for the first time – it’s great news for those current homeowners who are looking to sell their high-end properties. But luxury sellers really need to understand the market and whom they’re selling to in order to maximize their price and attract a bevy of full-price offers.

The following information is based on several different studies, polls, and surveys of luxury homebuyers from a wide array of credible industry leaders.

Understanding the new luxury buyer:
The most profound shift in demographics of the High Net Worth Individual (HNWI) who purchases luxury real estate is that he or she is much younger than we’ve seen traditionally. And these younger HNWI are looking to spend more for the house they love than the typical 55 and older buyers. The younger HNWI spent an average of $2.1 million on their home, almost twice as much as their older counterparts bring the average to $1.6 million for wealth individuals.
In general, all Millenials are the next big wave of homebuyers, though they are still taking a wait-and-see approach so they won’t get burned like the generation before them. It’s reported that 43 percent of younger wealthy consumers are considering purchasing residential property in the next 12 months, compared to only 21 percent of those age 55 and older.

Younger HNWI also want to own two or more residential properties (38 percent of those surveyed) for their personal residences or vacation homes, and also consider looking out of the country for one of those purchases (6 percent).

But one of the most significant changes between younger affluent homebuyers is that they’re not emphasizing square footage over all else. They still enjoy sizable homes, but are willing to sacrifice 1,000 square feet or so if it means they’re in better locations – such as closer to work or cultural attractions in a nearby city – or find the other luxury amenities they’re seeking.

But they have certain expectations, priorities, and desires on their checklist.

What’s "in" this year:
-Some things never change, like the fact that 70 percent of respondents say the location of their home is the most important factor. Homes near the beach or mountains are still popular, with great views and access to leisure activities paramount, but many younger buyers are purchasing expansive property in the country or rural settings, too.

And 54% of luxury buyers still put top priority on a chef’s kitchen when they go looking for their next home.

60 percent of affluent customers want hi-tech and wired homes, fully automated so they can control features like lights, security systems, video cameras and intercoms, climate control, TVs and music, window shades, and door locks from an iPad, remotely via a mobile app, or even with voice activation.

In fact, almost 90 percent of this demographic of luxury homebuyer said they wouldn't even consider living in a home that isn't tech-friendly.

Buyers want green and environmentally friendly homes that are also energy efficient. Two thirds of high end buyers looked for Energy Star-rated windows and doors and insulated glass, and 18 percent of those surveyed reporting that they a home's Green-LED certification was very important.

Open floor plans are more important than ever according to 39 percent of high-end buyers.

Media rooms still are in vogue, with 60 percent of respondents looking for homes that contain one, and 19 percent looking for home theaters.

Home gyms and specialty exercise rooms were an important feature for 50 percent of buyers.

28 percent of luxury homebuyers want swimming pools.

Outdoor kitchens are still a red-hot trend, with nearly half of new luxury buyers on the hunt for homes with that feature. But aside from the typical wet bar (desired by 42 percent of respondents), they’re also looking for warming drawers, sinks, and climate controlled wine, beer, and beverage fridges. 

Buyers also are looking for outdoor fireplaces and firepits in close proximity to the swimming pool and outdoor entertainment area.

New trends in luxury home design:
Mediterranean and French designs are in for luxury homeowners, with Victorian, Italian country, and Classical designs becoming passé.

Instead of granite kitchen counters (don’t do it!), natural stones like sandstone are the new trend. Quartz countertops are the hottest new trend, the crown on any royal kitchen. 

Likewise, natural floor flooring has taken over the more slick and impersonal tile.

Silver and nickel fixtures and hardware are being updated with brass.

In the kitchen wood finished cabinets are considered extremely outdated, with white, gray, black modern cabinets the newest hot look, some with faux natural patterns and often purposely mismatching with other elements to highlight secondary and tertiary colors.

In years past, luxury buyers wanted to enjoy sprawling, elegant bathtubs. But the reality is that we all take far more showers than baths, so the new wealthy buyer is looking for huge, luxurious showers.

It’s now in fashion to show off a well-designed, extravagant powder room for your guests.

Dining rooms have been depersonalized and are more modern and nontraditional, with simple, neutral colors and fixtures.

New additions to the list of luxury home amenities:
Open rooftops are being utilized as spaces for entertainment, exercise, reflection, yoga, and sunset watching, and also to create stunning rooftop gardens and green areas.

The real ultra wealthy buyer isn’t treating the garage like the worst space in the house anymore, but making sure their luxury and specialty automobiles are highlighted with subterranean parking, high-tech automated parking, and even glass ceilings or walls so the autos are on display as you walk through other areas of the house.

It’s not enough to have a wine fridge for luxury buyers; they want dedicated wine cellars with precise climate controls and also dining and tasting areas to host their friends for vineyard-quality events and parties.

Affluent homeowners are equally concerned with leaving a smaller environmental footprint and improving their living space for health and wellness. That’s why super purification systems are one of the biggest new attractions in the luxury market, with filtration systems that include UV lights, humidification systems, and energy-efficient fans run to keep the air purified.

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