The frenzy that has characterized the luxury real estate market over the last 18 months seems to have settled, begging questions around what to expect next, as well as who and what will drive the market throughout the rest of this year and into next.
Leveraging EVI, Engel & Volkers’ proprietary data center, Engel & Völkers Americas analyzed the current sentiment of homeowners across North America and identified four distinct segments of home sellers that will drive luxury sales in 2021 and 2022.
More than 65% of millennials at the $250K+ household income level are planning to sell a home in 2021 or 2022. Delving further into the data, 35% of this Wealthiest Millennials group intend to sell a home they purchased for more than $1 million, 48% own multiple homes, and for 58% of this group, it will be their first time selling a home.
The Wealthiest Millennials also overwhelmingly prefer city living; 83% currently own homes in urban areas and 60% are looking to purchase a home in an urban area. They’re also taking on new responsibilities post-pandemic, as 96% of this cohort currently have parents living with them or believe their parents will live with them in the future.
Millennial Entrepreneurs
As remote work remains popular, 29% of millennial business leaders are in the process of relocating to new areas. Again, cities remain the top choice for where this group of home sellers would like to move. These Millennial Entrepreneurs are also very family-oriented and committed to making lifestyle investments to ensure that they’ll never be separated from their families again.
Real estate professionals take note: while only 39% of Millennial Entrepreneurs are currently homeowners, they are projected to account for 32% of all luxury home sellers in the next year, and 80% have never sold a home before.
COVID HENRYs
The term HENRY is an acronym for “High Earners, Not Rich Yet” and commonly refers to young professionals who have an annual household income between $100,000-$250,000. COVID HENRYs are millennials and Gen Z who emerged from the pandemic within this salary range, but haven’t had time to amass the amount of wealth as compared to older generations. 56% of luxury home sellers will be members of this group.
The youngest segment identified, 20% of these home sellers are members of Gen Z. COVID HENRYs came out of the pandemic with a desire to travel globally and have more unique experiences, however, this group is most evenly split in their desire to live in either cities (49%) or suburbs (43%).
Early Retired Gen Xers
In the next year, 21% of all retired Gen Xers plan to sell a home, accounting for 27% of luxury home sellers. Historically, those who reach retirement plan to downsize their homes. However, Early Retired Gen Xers find themselves in atypical situations. 58%have had family move in since the pandemic, driving many of them to list their current homes in pursuit of bigger homes with more bedrooms. In fact, only 13% of Early Retired Gen Xers are planning to downsize in their next move.
75% of these luxury home sellers have previously sold at least one home. They’re experienced and very socially savvy. 60% have watched listing videos on Instagram and 38% have learned about their agent via Facebook or Instagram.
To learn more about each segment, as well as tips for real estate professionals in engaging with each group, Engel & Völkers’ Next Luxury Home Seller report is available for download here.