As our on-the-go lives become increasingly mobile, the luxury real estate market is seeing a shift in the needs of affluent buyers. Elite Traveler finds out what’s driving property trends and how modern amenities are changing how we choose where to live.
It’s official: confidence in real estate is back. Top-tier properties are achieving record highs in several cities globally, according to research by Christie’s International Real Estate, while in the US, real estate site RealtyTrac has reported that sales of residential properties grew by 14% in September compared to the same month last year.
Leading real estate company Coldwell Banker Previews International’s 2013 Luxury Consumer Survey, conducted in partnership with the Luxury® Institute LLC in America, found that most of those surveyed owned at least one property and expressed confidence in the value of owning real estate.
Meanwhile, its Luxury Market Report, published last month, identified zip codes within New York, Beverley Hills and Aspen as having the highest number of luxury home sales over $5 million and $10 million, with growing momentum in established metropolitan areas such as Chicago, Washington D.C., Boston and Atlanta.
“There’s a really positive feeling in the air,” says Betty Graham, president of Coldwell Banker Previews International NRT.
“If property is done and it’s priced right, it’s going to sell right now, and we are experiencing more than one offer on the same property simultaneously.”
In addition to the growing confidence in real estate, Coldwell Banker Previews International NRT’s 2013 Luxury Consumer Survey highlighted the changes in the needs of affluent buyers – at both ends of the age spectrum.
While Graham says all consumers, regardless of their age, share a love of big views, a generation gap has emerged when comparing the property amenity needs of younger and older consumers.
“[The younger consumer] wants their children around them,” Graham explains. “It’s about having outdoor kitchens and home gyms and plenty of garages for all of their cars, and a wine cellar. Home theaters are very, very important too.”
Having a home that is fully automated and can be temperature-controlled from the iPhone is also a crucial feature, says Graham, who adds that green – or LEED certified – homes are on the rise among younger generations, too.
“LEED certified homes may cost a little more but beyond that there’s a long-term advantage as maybe utilities won’t be as high,” she says.
“I think a factor that’s just as strong in that mentality is the pride of ownership of owning a green home and being able to make that statement to the world. It’s kind of like owning an architecturally significant home – you’re just a little more proud of it.”
While younger consumers are keen to have amenities that provide the freedom of connectivity from the comfort of their home, older consumers seem to be moving away from the responsibility that comes from owning a trophy home.
“In the over 55s, what we are seeing across the board is their need for big backyards, big swimming pools, home gyms and so on, are just not as critical, and what they prefer is to be able to travel more,” Graham says.
“They want to make it easy to turn the key and walk out the door, so we’re seeing the older consumers selling their bigger properties and moving into high rises and so on.”
EXCLUSIVE AND BOUTIQUE: THE NEW DEVELOPMENT TREND
Laurie Moore-Moore, founder and CEO of The Institute for Luxury Home Marketing, says that a mindset shift among the affluent has seen formerly “flamboyant” purchases sidelined for smaller, unique homes.
“The McMansion is slipping in popularity as many affluent are seeking something a bit smaller, a home which is unique and takes quality to artisanship level,” she adds.
One example is a high-rise development in New York under the name of 18 Gramercy Park, which features 14 full-floor homes, a penthouse and a maisonette – all offering incredible park views.
In addition to residents having access to the development’s own spa and fitness center, they each get a much-coveted key to Gramercy Park – Manhattan’s only private park.
As expected, sales of apartments in the building, which was previously a Salvation Army-sponsored rooming house for women, are breaking neighborhood records.
Another example is luxury condominium development, One Ocean. The boutique property, which is being developed by Related Group, will house 46 condos and four villas. In addition to spectacular ocean views, residents have access to a 24-hour on-site concierge service and private beach club.
“Boutique developments in limited supply are evidence of the trend toward high-end residences which are exclusive, unique and exhibit artisanship,” says Moore-Moore.
Lifestyle vs. location
While Coldwell Banker Previews International NRT’s 2013 Luxury Consumer Survey found that location is still the most important factor when buying a property, more than a fifth (22%) of respondents said they have the freedom to find an ideal property that truly fits their lifestyle without being limited by location.
Graham says that the rise of technology is to thank for this, and suggests that it could be the reason why places such as Aspen are becoming all-year-round homes rather than holiday destinations.
“Technology has changed the world and it’s certainly changed the values in real estate,” she says. “It’s really allowed people to work wherever they are and to be accessible and to have WebExes and webcams and Skyping, and to run their whole businesses.”
In addition, Coldwell Banker Previews International NRT’s Luxury Market Report showed a rise in the number of active listings of properties priced $1 million and up in established metropolitan areas such as Chicago, Washington D.C., Boston and Atlanta this year.
One development that is gaining a lot of interest from buyers is the Residences at CityCenter in downtown Washington, D.C, where 216 condominium residences are being built in the 10-acre CityCenterDC neighborhood (pictured left).
“Nationally we’ve seen that working professionals increasingly value the amenities offered by urban living – shorter commutes, walkability, etc.,” says Lindsay Reishman, of Lindsay Reishman Real Estate in Washington, D.C.
The increase in the affluent workforce has led to the development of retail to support demand, adds Reishman, who has worked in the industry for ten years, and over time Washington, D.C. has become a safe investment for investors.
“It has become an increasingly popular option for empty nesters ready to enjoy the city amenities and trade in the big house for the freedom that comes with condo living,” he says.
Graham agrees that a rise in older consumers opting for smaller homes could have led to an increase in the affluent moving to metropolitan areas, and explains that a sense of ‘freedom’ could be driving this trend in luxury real estate.
“For the older consumers it’s the freedom of less responsibility and for the younger consumer it’s the freedom of having everything they want at home.”