The Changing Face of Luxury
It only seems a short few years ago that demand for large properties, mega mansions, private estates and luxury ranches were all the fashion, but the younger generation, especially millennial millionaires are shying away.
Don’t be mistaken that it’s about the price, that is simply not true. It’s more to do with changes in lifestyle preferences and the value they can obtain for their money. These larger properties are viewed as too laborintensive and expensive to run and manage. Instead, today’s home purchase decisions are based on the experience and amenities a property affords to its owner.
For instance, Mark Cuban (TV’s “Shark Tank” Investor) just bought a vacation property that is under 7,900 sq ft for $19 million in Laguna Beach. It’s a stunning, ultra-modern property, with walls that open up the outdoor space, a private pool, and ocean views. But the significant difference isn’t just that it’s a smaller space than you’d expect for this billionaire. Instead it’s the opportunity to own a private home that has access to community amenities of a luxury hotel – including services such as concierge, room service, housekeeping, and a spa.
As Millennials (aged 23-37) become prime consumers, their numbers – as stated by Pew Research – will overtake Baby Boomers by the end of this year. We are already starting to feel the definite shift being created by their purchasing power. These affluent millennials are investing in forms of discreet wealth, preferring intangible items such as wellness and eco-friendly products rather than name brands.
This trend isn’t just the jurisdiction of the young; more and more luxury condo developers are pouring their money into providing a plethora of amenities as they recognize the equal appeal from empty nesters, retirees, and baby boomers.
There has also been a growing trend for today’s wealthy to diversify and purchase not one, but several smaller residences in various locations to further enhance their need for unparalleled experiences. This also explains why luxury buyers are downsizing and prioritizing quality over space.
Another aspect of this growing trend is location – buyers are looking for the benefits of a great walk score to nearby dining, shopping, and lifestyle experiences.
Read the full report here.