Key Highlights
- Wealthy Millennials becoming dominant force in high-end real estate
- Their preferences are market-moving preferences
Millennials Now Represent Largest Market Share of Homebuyers
Adults born between 1981 – 1996, also known as Millennials, represent the largest share, 38%, of the home buying public in the US, according to the National Association of REALTORS®. The wealthy among this most educated, most technically savvy, environmentally conscious and higher earning cohort are essentially changing the shape of luxury housingin this country.
Wealthy Millennials as First-Time Buyers Going Straight to Multimillion-Dollar Properties
Bradley Nelson, chief marketing officer with Sotheby’s International Realty, said that this segment of the Millennial demographic is going “big.” Nelson continued, “In the past, people bought a modest property, lived in it until starting a family, and then traded up to a larger property. Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home in the US of internationally.”
Remote Working Millennials Ascending Housing Ladder in Areas Where They Want to Live, Not Living Where They Working
A newly released report from Sotheby’s on global luxury in 2021 indicated that “…remote work has allowed Millennials to ascend the housing ladder in smaller, more affordable cities.” These buyers have been flocking to areas that are walk-able, have nature at their respective “fingertips” and offer a well-rounded quality of life with art and food scenes.
Aspen CO, Austin TX and Montecito CA are prime examples of such areas benefitting from Millennial preferences. Total sales volume in Aspen hit a record of $1.5B in Q3 2020 and parts of Park City UT saw median sales prices skyrocket +50%, according to Sotheby’s 2021 Luxury Outlook.
Internationally, the Mornington Peninsula outside of Melbourne is experiencing a similar stream of wealthy Millennial buyers.
Wealthy Millennials Wanting Touch-less Features and Sustainability
Within this high-end market tier, Millennials prefer an integration of touch-less, high-tech home features and sustainability. Sotheby’s Nelson said, “If a home is move-in ready and environmentally conscious (with features such as energy saving geothermal systems, solar panels, green roofs, etc.) and has a Teslacharger installed in the garage, those homes are generating a premium…”
Real Estate Professionals Expecting Lux Home Prices to Rise Over Next Three Years
Wealthy Millennials, like all demographics, are not immune to record low inventories to say nothing of homes equipped with the features they’re looking for. That being said, Nelson is optimistic. With “wealth creation growing and cost of capital declining, it’s a promising storm for the high-end housing market.” 63% of Sotheby’saffiliates expect luxury home prices to rise over next 3 years.
Thanks to Bloomberg.
