According to the Institute for Luxury Home Marketing, the luxury segment of the housing market is about “creating experiences that afford the feeling of luxury well-being.” Not only is this market segment “solid,” prices stabilized in November 2019 and the selling price to listing price ratio remained consistent.
Looking toward 2020, the Institute for Luxury Home Marketing sees four major trends under the umbrella of “finding a holistic approach to luxury.” Those four major factors include…
The Migration to New Markets
The construction and escalation of real estate investment will move more firmly into secondary and tertiary market tiers.
- Dallas, Houston, Denver and Seattle were definitely on the radar in 2018.
- Jacksonville FL, Charlotte, Nashville, Cincinnati, Boise and Kansas City came onto the radar in 2019.
- The combination of affordable property values, lower taxes, increased job opportunities and more sustainable lifestyle opportunities will drive the 2020 lux markets.
- Lux buyers are seeking smaller homes under 3,000 square feet…”jewel box” lux houses, not starter homes, with lux kitchens, marble surfaces, and amenities through the roof.
Affluent buyers are diversifying their portfolios to include both major cities and new secondary markets. Demand is up for smaller sized properties that offer “full home experiences” for their families and pets to live, play and work. And affluent buyers want to maximize potential revenues for their corporations personal businesses and/or their startup entrepreneurial ventures.
New Groups of Influence
Luxury market experts are now increasingly recognizing “Millennial power.” The Millennial generation is expected to inherit its greatest wealth by the year 2030. According to
Coldwell Banker Global Luxury, this wealth is estimated to be nearly $68T!
92% of Millennial millionaires, in fact, recognize that real estate investment is one of the most reliable ways to build wealth and many are looking to Hipsturbias, neighborhoods away from too expensive downtown cores that offer live/work/play opportunities are where they are making their investments.
Boomers are experiencing both a 25-year increase in life expectancy and a surge of scientific and technological advances that far exceed their expectations for independence. These Boomers are returning to downtowns, moving into Hipsturbias, and moving into multi-family properties that offer them walkability and entertainment/restaurant/cultural amenities near where they want to live.
Health and Wellness
Consumer demand is surging for homes that embody a sense of wellness almost as a way to stave off speed, instant gratification, sedentary lifestyles, unhealthy diets, stress, nature deprivation and loneliness. Buyers want real estate that is “eco-sensitive.”
The Natural Way – Design Impacts
Luxury buyers want multi-functional spaces. Rather than 10-car garages, lux buyers want spaces that can function as exercise facilities, music rooms, swimming areas, yoga studios, etc. simultaneously.
Big, bold plants are moving into homes, onto terraces and into rooftop gardens. Big, bold colors are also moving into interior spaces as splashes of vibrancy along with neutral palettes as a way to balance the senses. Natural woods, textures, and terra cotta colors/surfaces are also being added to walls and ceilings.
Design elements that incorporate the yin and yang of life are becoming more and more central to lux buyers aesthetics.
Bottom line – the Institute of Luxury Home Marketing encourages luxury real estate professionals to focus on lifestyle-specific niches in order to facilitate real estate success in 2020.
