"The Annual Survey of Affluence and Wealth in America," produced for American Express by The Harrison Group, reports good news for those of us who work in the luxury housing market. While the average American may look gloomily at the nation's bleak housing statistics, the wealthy consumer sees opportunity. Seventy nine percent of those who earn more than $100,000 annually believe that the U.S. is in a recession, but 88% believe that property values will rebound.
What's even more significant is that those earning $500,000 or more believe that real estate is a "real opportunity" right now and 40% say they plan to purchase a home in the next 12 months. Of this wealthy group, 33% say their purchase would be a second home, 25% would be buying home number three.
This desire to purchase is consistent with Merrill Lynch and CapGemini's research showing that the world's very wealthy have been shifting more of their money into residential real estate. Last years' "World Wealth Report" showed that money millionaires (those with a million or more in investable asssets) had 12% of their total investment portfolios in residential real estate. For this group, purchasing another residence may be as much an investment portfolio strategy as a recreation/lifestyle decision. In any case, it bodes well for the luxury real estate market.