Extremely fascinating article and statistics from Inman.com on real estate and the luxury market. Some of these were surprising to even myself!
Defining the luxury market
What constitutes a luxury listing? Some people define the “luxury” market as being the top 10-20 percent of the market in any given area. Others prefer to categorize “luxury” as being an upscale home in locations such as Aspen, Colo.; Beverly Hills, Calif.; Boston; Manhattan; the Hamptons, N.Y.; or San Francisco, among others. A third group would argue that a luxury home must fall into the top 10-20 percent of all homes in one of the most luxurious destinations in the world, such as London, Paris or Hong Kong.
The key findings from the Coldwell Banker report on the ultra-affluent (i.e., those who can purchase a home with a $10 million or higher price tag) are summarized below:
- 72 percent are local to the area they buy in.
- 44 percent are entrepreneurs.
- 54 percent are married with children.
- 39 percent of international buyers are coming from Asia.
- 62 percent are between the ages of 45 and 54.
- The most important feature (79 percent) to an ultraluxury homebuyer is “location, location, location.”
- The most effective buyer-targeted marketing: 44 percent said “online.”
The other key trend cited in the report was the unprecedented rise of affluent women.
“Women now control $20 trillion in consumer spending worldwide, and women’s global incomes have been estimated to grow by $5 trillion over the next five years (nearly twice the growth in GDP expected from China and India combined), making affluent women one of the most influential groups in the luxury marketplace today.”
In fact, the Federal Reserve Board predicts that by 2030, approximately two-thirds of the wealth in the United States will be controlled by women. What’s interesting is that the bulk of these women will be between the ages of 55 and 65. This applies to Chinese women as well — there are 2,700 Chinese women worth more than $30 million, of which 39 percent are under the age of 40.