The real estate landscape is ever-evolving. Changing work environments and the continued prevalence of remote work have impacted buyers, whose needs and wants continue to develop and change. Over the past year, we’ve seen a new class of luxury homebuyers emerge. From the Crypto Visionary to the New American Rancher, each of the luxury home buyer personas poses a variety of distinct needs unique to their lifestyle and personal definition of luxury.
The Homeward Bound Millennial
Millennials have emerged in the real estate market as an undeniable force, responsible for 43% of all homebuyers in 2022. Entering a seller’s market, with record-low inventories and record-high prices, the wealthiest millennials are taking their big-city salaries to the suburbs. Here, they can skip the starter home, work remotely, and enjoy life as a new homeowner with proximity to friends and family.
Over the last few years, millennials’ values have shifted, piquing their interest in homeownership and its respective responsibilities. Higher salaries, the opportunity to increase personal wealth, and built-up savings (from spending time at home, inheritances, etc.) are pushing millennials to reconsider renting. Further, the desire to start a family and/or keep up with friends has incentivized the generation to purchase a home.
The Crypto Visionary Cryptocurrency, the source of this persona’s wealth, is one of the most up-and-coming topics within real estate and the world at large. Crypto Visionaries are using their newfound wealth from digital assets to purchase incredible, luxury homes in metropolitan areas that embrace similar values and mindsets. To the Crypto Visionary, remaining aware of the newest technologies, practices, and processes is of the utmost interest and importance. Wherever their next property may be, part of the appeal for the Crypto Visionary is that a transaction completed with cryptocurrency will likely make headlines for setting new precedents in real estate.
The Eager International Buyer The pandemic has impacted each buyer persona—none so heavily as the Eager International Buyer. As the name suggests, the Eager International Buyer is keen to buy real estate in the Americas after international mandates and travel restrictions have limited their buying power. The National Association of REALTORS® (NAR) reported that the dollar volume of foreign buyer purchases was $54.4 billion USD from April 2020 to March 2021, a 27% decline. NAR’s data also reveals a 31% decline in sales volume. This story changed, however, throughout the end of 2021 and the beginning of 2022 as travel restrictions were lifted globally. The Eager International Buyer became just that—eager (and now able) to buy properties around the world. These buyers purchase properties for a number of reasons, most commonly to rent them out, live there, or use them for business purposes. Rentals and vacation homes led the pack, accounting for 42% of international sales in 2021.
The Year-round Vacationer As remote work options have sustained popularity despite pandemic restrictions lifting, it has become more viable than ever to live (and work) wherever you want. Instead of being tied to the city where they are employed, the Year-round Vacationer has the opportunity to prioritize their preferred lifestyle above all else when buying their first home. This preferred lifestyle could be anything from skiing or surfing to wellness and healthy living. Similar to the Homeward Bound Millenial, high urban home prices have led these buyers’ to purchase their second home first. The Year-round Vacationer may actually live in their property year-round, or they may rent out the property while maintaining their original rental property, creating a passive cash flow through their investment. In the United States, vacation rentals are projected to reach $17.66 billion USD in 2022, a testament to how lucrative a vacation home can be. Usage of these homes is entirely flexible to the owner’s schedule. Some Year-round Vacationers rent their homes consistently, and some like to use the property for themselves more frequently. That flexibility is important to this buyer group, who want to live life emersed in their passions and interests.
Provided by Engel & Völkers Americas