AARC Fall 2009 Affluent Market Tracking Study published today

American Affluence Research Center's new survey of the the wealthiest 10% of US households provides insights into "the new normal," "stealth wealth and luxury shame," and December holiday gift spending.

Conclusions are more positive than the many of the anecdotal examples that have appeared in recent media coverage of the luxury market, though the outlook on the real estate front is not so bullish.

Here are 7 questions and answers that highlight the survey's findings:
 
Should you be concerned about the prevalence of the concepts of "stealth wealth" and "luxury shame"?
Short answer: No. These concepts apparently apply to less than 7% of the affluent.

What is the "new normal" and will the affluent return to pre-recession levels of spending?
Short answer: The "new normal" is not new to the affluent. Most have been careful spenders and aggressive savers who live within their means. They say they will return to pre-recession levels of spending when the economy has recovered and they have recovered the recent losses in their net worth, which they estimate will take 18 to 24 months.

Which segments of the affluent have been reducing/deferring expenditures, which segments will do so over the next 12 months, and which segments are not cutting back?
Short answer: Age and net worth are more important factors than level of income. There is some variation depending on the type of product.

What are the spending plans for December holiday gifts?
Short answer: 9% will spend nothing and among those that will buy gifts, the average expenditure of $2,400 is a 5% decline from 2008.

Which of 8 major expenditures do the affluent expect to make during the next 12 months.
Short answer: Only the building of new homes has not risen since the Spring 2009 survey.

How do the affluent expect to change their spending for 17 products and services during the next 12 months?
Short answer: The spending indexes for all 17 categories have increased from the Spring 2009 survey.

What do the affluent expect of the stock market, business conditions, and their personal income during the next 12 months?
Short answer: They are more positive on all three than in the Spring 2009 survey.

Some other key insights:

• Acquisition plans for all of the 8 major purchase items, with the exception of building primary and vacation homes, rose slightly from the Spring 2009 survey. Plans for a major home remodeling showed the most substantial increase.
• About one in five report they have not changed their spending since the recession began. Of the 80% who have changed their spending, about a quarter do not plan to return to pre-recession levels of spending. This equals roughly 20% of the wealthiest 10% of US households. The two major factors that will influence the respondents to return to pre-recession levels of spending are the recovery of their savings/investments (54%) and the recovery of the stock market (49%). These two factors are important across all demographic segments but a bit more important to those age 60+.  Certainty of job security and/or compensation is relatively more important to those under age 50 and those in the lower level of net worth.

You can find more details and purchase the results on the AARC website.