The global luxury real estate brand has identified six segments of luxury homebuyers driving the market as consumers’ personal definition of luxury continues to evolve in tandem with changing work environments
Engel & Völkers released today an original Luxury Homebuyer Report distinguishing six segments of homebuyers currently driving the luxury market. According to career experts, remote work opportunities for jobs paying more than $100,000 doubled from 4% to 9% at the end of 2020, and reached 15% by the end of 2021 with projections that 25% of all high-paying jobs have the option to be fully remote by 2023. As the traditional work environment is redefined and high earners have more freedom to establish their homes according to their lifestyle, geographic and familial preferences, Engel & Völkers has identified six distinct types of luxury homebuyers that have emerged over the past year.
The Homeward Bound Millennial
Representing 43% of all homebuyers in 2022, the wealthiest Millennials are choosing where they want to live, not living where they work. Taking advantage of modern work arrangements, these Millennials are bringing their big city salaries and heading home to the suburbs to be closer to family. They are flocking to burgeoning markets such as Austin, Texas, Charlotte, North Carolina, Denver, Colorado, Greene County, Georgia, and Topeka, Kansas and are looking to work with tech-savvy real estate professionals in their search for smart homes that are fully equipped with amenities and environmentally conscious features.
The New American Rancher
Aged between 56 and 65, the New American Rancher has the most savings and the highest budget, with Baby Boomers holding 44% of real estate wealth in the United States. Having worked to achieve success and now in a transitional period of life, New American Ranchers are heading westward to places like Bozeman, Montana, Jackson Hole, Wyoming, Sun Valley, Idaho and Teton County, Idaho to realize their dreams of the American Wild West. However, they’re not necessarily looking for the responsibility associated with agriculture and livestock, rather relying on local real estate professionals to help them find luxury turnkey properties on large parcels of land that are not only a good investment, but can house multiple generations for years to come, support an active lifestyle and offer proximity to amenities, attractions, and health care facilities in nearby resort destinations.
The Crypto Visionary
Crypto Visionaries are bringing their newfound wealth to the real estate market. Always on the precipice of the newest trends and technologies, these buyers will be drawn to new urban construction that is innovative in design, processes, and luxury amenities. In particular, Crypto Visionaries are drawn to places such as Miami, Florida, New York, New York, San Francisco, California, Toronto, Ontario and Vancouver, British Columbia; these are markets that boast the presence of people, companies, and infrastructures that align with the Crypto Visionary’s forward-thinking vision and values: These buyers need a real estate professional who can help to diversify their portfolios and understands the community-specific regulations and practices regarding transactions in cryptocurrency and real estate.
The Eager International Buyer
With the easing of international mandates and travel restrictions that have limited buying power in the Americas since 2020, the Eager International Buyer is ready to invest. Many of these foreign buyers continue to view U.S. real estate as a “bubble proof” investment, and often originate from China, Canada, the United Kingdom, India, and Mexico. While foreign investors typically look to cities like New York, Chicago and Los Angeles, there’s also been increased interest in secondary markets in states such as Arizona, Idaho, Texas and Washingtons, among others. Foreign investors understand the intricacies of buying and selling U.S. real estate and need a real estate professional who also knows how to transact real estate across international borders. Once buyers have identified a particular market, they will look to real estate professionals who can provide local expertise and view properties by proxy, all while moving quickly and discreetly to close the deal.
The Renaissance City Dweller
After the much buzzed-about “mass exodus” from cities during the pandemic, many of those who flocked to suburbs or rural areas in 2020 now want to return to their urban lifestyle in major metro areas like New York, Chicago, Los Angeles, Miami and Vancouver. However prices in urban cities have jumped as much as 30% from pandemic lows, so buyers looking to return to their previous neighborhoods may have to be prepared to make some compromises. Real estate professionals must be available and responsive 24/7 to these eager buyers, able to place offers quickly in red hot markets, and help accommodate buyers with short-term rentals during their property search.
The Year-Round Vacationer
As remote work has maintained its popularity, the Year-Round Vacationer is now able to live and work wherever they want, prioritizing their preferred lifestyle above all else when buying a home. Whether a skier looking to purchase in Aspen or a surfer looking to purchase in Hawaii, these buyers are looking for homes that allow them to live out the “vacation lifestyle” everyday and will often seek out real estate professionals with similar interests. Year-Round Vacationers are often entering a new market that is often quite far from their current residence, so real estate professionals must be prepared to give virtual tours and plenty of local guidance, including the in’s and outs of the seasonal rental market as a potential stream of income.
“As the way consumers live and work continues to evolve, the definition of luxury becomes increasingly personal,” said Anthony Hitt, president and CEO, Engel & Völkers Americas. “People can customize their ideal lifestyles more so than ever before, and we see that reflected in today’s buyers. From the Homeward Bound Millennial to the Crypto Visionary to the Year-Round Vacationer, luxury buyers are in pursuit of specific lifestyles and need real estate professionals with the expertise to help them achieve those dreams. As a real estate professional, understanding your market and clientele has never been more important, nor has cultivating a distinct market specialization to best serve these burgeoning buyer segments.”
To download the full report, visit https://bit.ly/3yfBv8h.