The luxury real estate market is rich — with opportunity. But the price that today’s luxury agent must pay to play in this segment isn’t just in dollars. It’s in data.
The high-net-worth and ultra-high-net-worth markets are more vibrant than ever with the rise in the number of millionaires, multi-millionaires, and demi-billionaires. For luxury real estate agents, it’s crucial to have a holistic understanding of what drives and motivates these clients, how they spend and save, what style resonates with them and how you as an agent can distinguish yourself when working with affluent clientele.
While the luxury market has softened in some areas and some price points, home prices are steady in most parts of the country and the sale of $10 million homes has remained strong.
That means if you want to get in on the action, you must do your homework! The most successful agents in the luxury market are always attuned to the latest trends and have a great facility for connecting them to the unique interests of the individual clients.
A new report from Coldwell Banker and WealthEngine, Millionaires vs. Demi-Billionaires: Wealth in 2018, compared the attitudes and preferences of the U.S. millionaire market – defined as those with a net worth of $1 million or greater – and the U.S. demi-billionaire market – defined as those with a net worth of $500 million or greater – to identify the top market and lifestyle trends shaping the luxury sphere.
Awareness of the real estate market conditions driving the affluent clientele’s purchases has become table stakes. You need a deep understanding of their lifestyles and the trends that shape them so the real estate experience fits seamlessly into their lives. You need to understand not only how a client’s investing strategies play into their buying decision, but also have a discerning eye for the style that will resonate.
The Millionaires vs. Demi-Billionaires report gets to the heart of these macro trends and what they mean for you as a luxury agent.
Top luxury real estate market trends in 2018 include:
- Increased mobility: Technology allows consumers to be increasingly mobile. Weekend vacation homes are a trend of the past, as we’re seeing more luxury clients buying full-season vacation homes where they can work remotely.
- Geographic expansion: The wealthy are expanding their property ownership beyond coastal locations where they have historically been based. Millionaires are investing in properties spread across New Jersey, Massachusetts, Virginia, Washington, Illinois, and Maryland, while demi-billionaires are emerging in Colorado, Illinois, and Pennsylvania.
- Spending power: Only 10 percent of demi-billionaires and 7 percent of millionaires are aged between 40 and 50, but they’re growing groups. While older generations may possess more current wealth, younger generations have tremendous spending potential and are a key group for luxury agents.
Top luxury lifestyle trends in 2018 include:
- Amenity-rich homes: Millionaires and demi-billionaires influence everything from how homes are being built and purchased to how they’re decorated and renovated. They’ve redefined what buyers want, and builders are responding – we’re seeing industry shifts toward amenity-rich homes with features like private gyms and statement wine cellars, as well as homes that are eco-friendly and smart home automated.
- Brand loyalty: When it comes to collection toys like automobiles, demi-billionaires are Mercedes all the way – ranking the Mercedes-Benz S Class, E Class and GL Class among their top favorites. Similar to the average consumer, these high-net-worth individuals can express brand loyalty to you or your network when you as an agent draw meaningful connections for them and customize their experience.
- Bespoke marketing: Building on a customized experience, luxury consumers want bespoke offerings and services. When they travel, for example, they want a personalized, transformative experience, notes Skift, a travel insights company. These consumers have already done research before going to a travel agent or a real estate agent and look to these agents as trusted advisors for a hands-on, bespoke marketing experience.
The power of personalization is essential across real estate. Millionaires (7 percent) and demi-billionaires (0.001 percent) only make up a small fraction of the U.S. population, yet they have vast power to influence trends and the economy. They are a tremendously diverse class of individuals and creating a customized experience for them is the way of the future in luxury real estate.
To stay ahead of the curve on the latest luxury trends, see how the Coldwell Banker Global Luxury® program equips its Luxury Property Specialists with state-of-the-art technology and educational resources so they can seamlessly connect with the world’s most affluent clientele.