Luxury Homes – Insights, Trends, and Demographics
Whether you buy, sell, market, build or just love luxury homes, you’re probably wondering what’s up next for the market, the design direction homes are going in, and who the luxury market will be catering to. Well, you’ve come to the right place! Here’s your complete guide to luxury homes. Read on to learn more about the direction luxury homes are headed this year.
2014 Market Trends
Many home markets will pick up in 2014, but some luxury markets will cool off, making it a good time to buy, according to a report by the Home Buying Institute. The S&P/Case-Schiller Home Price Index reported that between July 2012 and July 2013, home prices have risen by 12%. The HBI Report estimates that prices will continue to rise and in some California markets even reach double-digit percentage increases like they did in 2013. However buyers and sellers in a few of these markets should be cautious: luxury home markets such as San Francisco, Scaramento, Las Vegas, Phoenix, and a few more saw record-breaking growth. These cities are bound to see a burst in their mini-bubbles, as increases like Sacramento’s 37% can’t continue for long. Prices will continue to rise, but not nearly as quickly as they did.
Those looking to purchase, or sell, luxury homes in Florida should start soon. While homes in California, Las Vegas and Phoenix made news for being in high demand in 2013, the available housing inventory in Florida is quickly decreasing. In Naples, FL, properties on realtor.com have decreased by 22% and the same has happened in Ft. Lauderdale, West Palm Beach, Daytona Beach and other cities. There have also been new job opportunities and economic improvements created in the state, which is increasing the demand for homes as well.
The Demographics of Luxury Homes
When you imagine a luxury home community, stately old tycoons of industry, with their prim wives in pearls and perfectly bobbed, platinum hair come to mind. But according to an article published by the Wall Street Journal this July, a new crowd is taking luxury home buying by storm, and they’re closer to Y2K than WW2. Real estate agents are stating that young, wealthy buyers are acquiring luxury properties at great market prices, and buy several, using one as an investment. Low interest rates and low prices due to the recession have made real estate an appealing investment to many wealthy millennials, who have made a fair amount of money off of Internet and technology companies and IPOs.
Women have also become a much more potent buying demographic in the luxury real estate industry. Women currently control $20 trillion in consumer spending world wide, a figure that’s expected to jump $5 trillion in the next three years. As many highly educated women earn higher salaries, as well as receive inheritances from parents and spouses, financial advisors are finding many women decide to expand their portfolios by investing in high-end real estate. Their taste differs from men who purchase luxury homes, in that they focus on quality details instead of palatial features, like a personal tennis court or large home office. Many women also gravitate towards secure, private residences, and often choose guard-gated communities.
Baby boomers are still on the rise, as they continue to live longer, and build luxury homes to retire in. One feature shown at many home shows was elevators. Starting at $20,000, it’s a pricey option, but for baby boomers that are thinking 20 or 30 years down the line, it offers mobility solutions. Another option is to line up closets with the proper dimensions so that they can be converted to an elevator shaft if the time comes.
New trends in Luxury Home Design
McMansions no more. Pre-recession, the goal was big, bigger, biggest! Today, with the environment and overcrowding being concerns on even the wealthiest homebuyers’ minds, luxury homes are no longer being spit out in a cookie cutter fashion with size as the only goal in mind. Luxury homebuyers are working with builders and contractors to design their homes so they fit their lifestyles, tastes, and the atmosphere of the community around them. Buyers don’t have the goal of biggest in mind; they have in mind what fits best for them.
As this close relationship with architects, builders and contractors has developed, so has a desire for unique personal amenities, automation and easily cleaned materials. Amenities in homes range from a steam room to a car lift, and the list goes on. Builders are more than happy to put these amenities in, as well as automotive controls. For a long time, the universal remote was the peak of remote access to turning on and off amenities in your home. Now, it can be done with a smart phone or tablet and a swipe of your finger. Whether it’s the lights, security system, fireplace, pool controls, or even heating and cooling, many homes can be set up to be controlled with applications, and even sometimes remotely!
The layout of luxury homes has become more relaxed, but design has become more artistic. The formal and informal dining room is an exhausted idea. Instead it has been replaced. One wide-open space, often connected to the kitchen and living room, operates with versatility and accessibility for families. There have also been changes in bathroom organization, though in two different ways. New American Homes reports that a popular option in luxury homes has become his and hers bathrooms, an alternative to the massive double sink master bath.
However the PALA 2012 Platinum award winner for bathrooms up to $50,000 was an immense master bath that was designed for multi-generational families. It featured a step stool and open access under the sink so that children could easily wash their hands, a walk in shower in porous, non-slip material without a rise for older members of the family, and natural colors, which parents will enjoy. The same goes for multi-functional spaces. For example, a library with an attached bath can later be turned into an additional bedroom. Outdoor spaces are playing a bigger part too, with spaces like outdoor kitchens, swimming pools and screened porches being mere feet from the home’s indoor space.
Easy care products have also become popular. This includes everything from stain free carpets to easy to mop up tile and hardwoods, to plants and flowers that even those of us with a black thumb could turn into a luscious garden.
Some design aspects have also come back into style. White cabinets have become the preference to dark wood, and Cararra granite was the most demanded countertop material for 2013. This is a light, almost translucent, marble, to match the cabinets. A dark floor is a stunning contrast to these lighter features. Mega-islands have become popular as a cooking space and place for socializing. And don’t forget to look up! A fancy ceiling, whether it features coffers, beams, a tray style, a barrel vault design or even some color, is a unique way to showcase design. Just make sure it’s not popcorn!
Becoming a Part of the Community
Community amenities are a huge part of how families choose where their homes are located. These can include anything from a private country club to a comfy club house, a mega resort style pool to a small lap pool and jaccuzzi, a community marina to a walking trail. Some of these could make or break buying a specific house for a “lifestyle” buyer. Communities with special amenities should make sure to promote their unique features. For example, a seaside neighborhood should promote its community marina or boat launching location, while a location in the mountains should make an effort to have accessible hiking trails.
How Companies Should Market to Luxury Home Buyers
According to a study by Ipsos MediaCT, the time that the affluent US population spends per week on the computer has increased from 32.8 hours in 2011, to 41.6 hours in 2013. In a Q1 2013 American Express Publishing/Harrison Group study, 48% of affluent buyers stated that they discovered new luxury products while browsing online. Not only is online luxury shopping becoming more prominent, the web has become the number one place to search for information on real estate.
This means that companies need to focus their marketing online, and specifically on social networking sites. The Benchmark State of Luxury Digital Marketing 2013 Report by Luxury Interactive and ShopIgniter stated that 95% of luxury marketing companies engage with customers on Facebook, 85% on Twitter, and 60% on Pinterest. Pinterest has beaten out Twitter in engaging customers, as visual imagery evokes a more powerful response than simple textual message engagement. 77% of luxury companies spent more on social media in 2012, and 72% planned to spend more in 2013. Based on this research, luxury home sellers should use social media to market to millennials who rely on the products to discover new real estate information, as well as older homebuyers who search for homes using the Internet and social networking sites.
2014 is going to be a wild year for luxury homes. Whether you’re renovating to bring your outdoor space closer to the interior or upgrading the ceiling, or searching for a completely new home altogether, this information will hopefully get you on the right track for buying, renovating, building or selling a luxury home in 2014.