A significant amount of media speculation and news surrounds the role of millennials, as well as earlier generations, regarding home-buying across today’s media outlets. Some sources point to millennial home-buyers making for the streets in droves to find properties for sale. Meanwhile, other networks describe Baby Boomers as the dominant force when it comes to accessing ownership.
Whatever the case may be, Luxury Estates Auction Company tends to give less merit to market trends purported outside the luxury sector, and focus on more affluent buyers and sellers. After significant research, our high-end auction house found some interesting trends surrounding the emergent Millennials Generation, the established Baby Boomer Generation, and the luxury housing market.
Millennials are starting to dominate the luxury housing market
For years, the Millennial Generation has been recognized as absent from the luxury real estate market. However, well-to-do Millennials are finally making their presence known in the high-end housing sector. In particular, a 2016 report assessing 2,600 multi-millionaires across 18 countries supports the idea that entrepreneurs born between 1980 and 1995 (a.k.a. Millennials) are becoming much more active in lower-mid tier luxury home buying. What’s more, numerous “comeback” markets characterized by increased sales as of late also seem to be attracting interest from wealthy Millennials and entrepreneurial luxury homebuyers.
While many of these affluent “new-age” buyers regularly buy homes in densely populated urban areas, others are showing interest in to settle down in more conventional resort markets defined by first-class lifestyle amenities. Likewise, the hyper-connected, digital business world affords high-net-worth individuals to pursue lifestyles in areas previously not conducive to global connectivity.
For instance, locations such as Jackson Hole, WY, and Naples, FL are experiencing an uptick from buyers dubbed “millennipreneurs.” Where such destinations were formerly reserved for America’s wealthiest and iconic figures, this historic demographic in luxury real estate is rapidly changing to include a new generation of 30-year-old angel investors, Silicon Valley sensations, and telecommuting entrepreneurs.
Millennial ‘Sharing Economy’ influences high-end housing markets
Now, while a ‘sharing economy’ may not seem beneficial to sellers, it’s actually motivating Millennials buyers to invest in high-end homes otherwise overlooked. In particular, concepts like Vacation Rental by Owner (VRBO) and Airbnb afford Millennials a chance to purchase second homes at higher price points than previously possible.
‘Snowbird’ lifestyle becoming status quo
In spite of Millennials’ growing presence in the luxury housing market, individuals born on the backside of the Baby Boomer generation persist as the most significant market driver. Coupled with their influence on supply and demand from downsizing, Boomers’ buying habits are also greatly affecting the market. For example, a Baby Boomer selling a $6 million home may opt to buy two $3 million homes to accommodate their changing lifestyle.
At the same time, the retirement lifestyle sought after by Boomers could be seen to add to inventory constraints currently experienced by the market at large. Therefore, even though many Boomers desire a different kind of retirement than their parents, finding suitable accommodations can prove problematic. In other words, the lack of incentives for ‘empty nesters’ to downsize has led to a large population of Boomers deciding to stay put in their current homes. Ultimately, these dug-in Baby Boomers negatively affect the housing stock available to newer buyers.
All things considered
High-end property markets across the nation are experiencing drastic shifts in both the age of buyers and buyer behavior. Likewise, no longer are luxury coastal communities and exclusive resort towns thought of solely as locations for second-homes. Advances in communication, technology, transportation, and overall business attitudes are enabling high-net-worth individuals to live and work where their life’s vision and mission best align.
If you’re unsure about local markets and how to best sell or purchase luxury real estate, get in touch with Luxury Estates Auction Company today! Our friendly and knowledgeable staff can always help you navigate the ever-changing landscape of the real estate market.