- A new report finds that 85 percent of emerging luxury consumers are confident in the housing market.
- Luxury millennial consumers want their homes to reflect their lifestyle.
Here’s another great acronym for everyone to learn: H.E.N.R.Y. — high earning, not rich yet.
Sotheby’s International Realty (SIR) was hoping to find insights from this group its recent report, Global Affluence: The Emerging Luxury Consumer.
The research, which surveyed high earning individuals from five different countries — the U.S., the U.K., China, the United Arab Emirates (U.A.E). and India — found that 85 percent of emerging luxury consumers (consumers with $250,000 to $1 million in “investable assets”) are confident in the housing market in their respective countries and are ready to purchase a home within the next three years.
Those in the U.S. said key motivators for buying a home are:
- Being at the right stage in life for this type of purchase
- Wanting a home that fits a particular lifestyle
- Doing well in their job
Houses are a reflection of lifestyle
The company said emerging luxury consumers across the five global markets search Sothebysrealty.com in hopes of finding a property that reflects a certain lifestyle.
At the top, 31 percent preferred waterfront living, 31 percent favored an urban environment, 23 percent were looking for something sustainable or eco-friendly and 22 percent gravitated toward historic property.
New Hampshire’s waterfront properties have the highest year over year increase in search rates on Sothebysrealty.com, while Malibu was trending as one of the most popular places for waterfront living.
Four of the top trending metropolitan locations were Boston; Tokyo; Portland, Oregon; and Vancouver. New York City is consistently one of the most popular metropolitan searches, with SoHo and the Upper East Side being the most popular trending neighborhoods.
Denver came out as the metropolitan location with the highest year over year increase in searches, said SIR.
For the top trending historic locations in the U.S., New Orleans and Atlanta were leading the way. The highest year over year increase in searches for historic homes was for Hudson Valley, New York, the report found.
SIR’s new chief marketing officer Kevin Thompson said he was encouraged by the research findings, which showed that this group of luxury consumers was getting ready to buy.
“People may think the millennials are being a bit slow, but it’s just a different journey that they are on,” he added.
As someone who has been trying to decipher the needs of the emerging luxury consumer, working for companies such as Gucci, Barney’s New York and now SIR, Thompson said: “We are all talking to the same audience, trying to make content relevant in terms of how they live their lives.”
Tell the story of a home, and tell it right
Thompson, who said the bulk of emerging luxury consumers were millennials, added that research showed emerging consumers have a growing appreciation for history and heritage: They want their agents to “tell them the story of the home.”
“It’s so important for agents to develop an arsenal of digital tools to use to tell the story with landing pages for the property, a microsite, a drone tour,” he said.
SIR works with Matterport to give remote buyers home tours.
“When being bombarded by brands and marketing 24/7, as these consumers are, you need to have rich content, engaging stories and images for them to look to, read and follow. Once you have got them with the story, then our job is to stay connected with them,” Thompson said.
Despite their consummate online research skills, these millennial consumers are looking for a real estate professional to hold their hand during the buying process. They want someone with whom they will have a personal connection, he said.
Agents are indispensable in helping their emerging luxury consumer client filter the plethora of information out there and find something different, he said. “It might be the finishes of the home that matter to them or the architecture of a home.
“If I was an agent working with a buyer who wanted to find a mid-century modern — one in great shape — then, as the agent, I would find out the story of how the current owners have lived in the home and how it was cared for,” he suggested.
Although the report found that these emerging luxury consumers gave waterfront, historical and urban homes optimal ratings, a suburban lifestyle choice would not be out of the question, said Thompson. However, cookie-cutter subdivisions, where all the homes are the same, would not appeal to this large buyer base, he said.
Developers and suburban planners who want to win this audience should be creating more “signature” homes that appeal to the buyers’ desire to express their personality via their home and get away from “generic tract housing.”
“I think it’s a different set of values. What they value most is individuality — a desire to be different,” he said.