Millennials are known to shake things up, and the upper-tier real estate market is no exception. A recent report published by Engel & Völkers found that affluent millennials have a different perception of what constitutes “luxury” compared to previous generations. In this report entitled “Meet H.E.N.R.Y.: Influencing the Next Generation of Wealth,” Engel & Völkers surveyed more than 1,000 millennial H.E.N.R.Y.s, or “high-earners-not-rich-yet” individuals (i.e. millennials and Gen X households with an annual income of $100,000 or more), about what “luxury” means to them and what they take into consideration when making purchasing decisions.
There were two main insights gleaned from the survey results: luxury doesn’t necessarily correlate to price, and social media is a highly-influential factor on the purchasing behavior of millennial H.E.N.R.Y.s.
Millennial H.E.N.R.Y.s Value “Quality” Over “Price”
When asked about what constitutes a “luxury” brand, 80% of respondents cited “superior quality,” 64% cited “reputation,” and only “47% cited “premium price.” While this may seem like semantics, these nuances can be incredibly useful for real estate professionals. Showing this demographic expensive but perhaps older or not updated homes may be off-putting, potentially resulting in the loss of a client. Instead, it is advisable to show H.E.N.R.Y.s homes that have high-end finishes, extravagant amenities, and preferably homes located in desirable neighborhoods/locations as these types of homes will be more likely to impress.
Millennial H.E.N.R.Y.s Rely Heavily on Social Media When Making Purchase Decisions
For millennials, social media is not just a photo- or idea-sharing platform—it’s a way to learn about and engage with high-end brands. Moreover, millennials, according to this survey, value the opinions of social media influencers, or people who have a large following on social media, when making purchasing decisions. If they see one of their favorite social media influencers endorsing or using a brand, they are more likely to trust that brand and consequently purchase it for themselves. In fact, 80% of the participants said that they would consider hiring an influencer for their specific expertise, whether that be a fitness instructor, interior designer, or real estate advisor.
As a real estate professional, there are two significant ways that you can use this insight to your benefit. First, it’s important that you follow these social media influencers to stay abreast of the latest trends. Understanding what your potential clients gravitate towards is invaluable as it will enable you to know ahead of time, what prospective buyers are looking for and how to best set up your listings for success. Second, step up your own social media presence, especially if you are relatively new to the upper-tier market. Not only will you be able to spread awareness about your business, but it will increase your credibility as an expert in high-end real estate. Although acquiring thousands if not hundreds of thousands of followers takes a lot of hard work, the payoff can be extremely profitable.
What This Means for Upper-Tier Real Estate Professionals
As this demographic comes into more and more wealth, understanding what they value and what they expect from their real estate advisor is essential. Now more than ever it is important to stay ahead of the trends as opposed to constantly catching up. Engel & Völkers Americas president and CEO Anthony Hitt said it best: “With H.E.N.R.Y. poised to become the next generation of wealth, luxury brands must start planning as to how they will service this distinctive demographic.”