Our September Luxury Insights Report revealed that the market of grand ceilings and dramatic floor plans is slowly but surely becoming more practical and discreet.
As millennials are expected to start crowding out baby boomers in the luxury home market by the end of this year, the wants and needs of this market are shifting away from displays of grandeur and are moving towards presentations of minimal luxury.
Luxury buyers are looking to maximize their live’s efficiency while minimizing their impact on the environment, lending the market to a rise in luxury condo development and a focus on new urbanism.
Luxury buyers are looking for quality over quantity
September’s report conveyed that today’s luxury buyer has become increasingly interested in a more functional space over one with impressive size. As more millennials enter the market and baby boomers age, they’re looking for smaller, higher-functioning residences that are easier to maintain. In addition, they’re more attracted to locations that yield high walking scores, aligning with healthier, more eco-conscious lifestyles.
Conveniently-placed luxury condos with optimized amenities like high-speed elevators and first-level storefronts have cropped up all over the country, responding to the growing demand for functional luxury.
This shift is an important factor to consider in your luxury home marketing strategy since buyers are less likely to feel motivated by properties and experiences as status enhancements. Instead, luxury real estate agents may see more success with focusing on how properties can enhance a buyer’s health, efficiency, and the environment.
Luxury buyers are seeking diversification
Along with downsizing, today’s luxury market is also showing more interest in diversifying their portfolio. They don’t just want one smaller, functional residence—they want many residences in a range of locations. Having more than one low-maintenance property exposes these individuals to a variety of experiences and also helps them invest in lower-priced luxury property with lower property taxes.
Therefore, luxury real estate is no longer limited to major cities like Los Angeles and New York City, requiring luxury real estate agents to expand their luxury home marketing reach into additional luxury markets.
This will also make it easier for first-time luxury home buyers to enter the market, and easier for newer luxury real estate agents to break into the market as well if they choose to focus on lower luxury price points.
Signing up for our monthly luxury market reports can help you learn about new luxury developments nationwide and keep you updated on the state of each market.
Luxury real estate is experiencing a balanced market
With a 16.01% sales ratio, our report shows that September presented an overall, balanced market in which neither sellers or buyers had significant control over price points.
If your luxury home marketing strategy includes targeting lower-tier luxury clients in the mass affluent group, this could be a good time for them to buy. However, there will be variances among cities, so be sure to check our report for your areas of interest.