New Jersey Hills Media Group
October 3, 2014
Quiet, unassuming areas adjacent to traditional luxury markets have rapidly transformed into hotbeds of luxury real estate in the 12-month period from July 1, 2013 through June 30, 2014. Leading the way and making its debut in the top 5 U.S. luxury markets for homes valued at $1 million+ is San Jose, where high-end home sales are up a staggering 76 percent from this time last year, according to the Luxury Market Report prepared by the Coldwell Banker Previews International® marketing program.
With Silicon Valley luxury real estate on fire, the affluent enclave of Atherton doubled its sales in the $10 million+ range from 2013. Burlingame, located approximately a mile from tony Hillsborough in Northern California emerged in the $10 million+ list for sold homes for the first time, most likely as the result of low inventory in the Bay Area’s most sought-after ZIP codes.
Adjacency is a powerful trend playing out in high-demand luxury cities well beyond Silicon Valley and the Bay Area, notably in Miami. North Miami Beach made its debut among the top 20 cities for $10 million+ homes sold —signaling that luxury buyers are expanding their horizons beyond the typical hotspots of Miami Beach, South Beach and the private communities of Star and Fisher Islands.
Overall, San Francisco led the nation with the highest number of sales in the $1 million+ category—up nearly 57 percent from this time last year.
The U.S. high-end residential real estate market remains strong, with nearly half (48 percent) of all wealthy consumers indicating that they plan to purchase a luxury home within the next 12 months, according to the companion survey of wealthy U.S. consumers with a net worth of at least $5 million (penta-millionaires) conducted by the Coldwell Banker Previews International® program and the Luxury Institute. Younger buyers are by far the most highly motivated to purchase: An overwhelming 81 percent of affluent individuals under 35 plan to buy a luxury home in the next year.
The survey reveals dramatic generational differences:
Penta-millionaires 35 and under reported the highest average purchase price of all age groups – $7.8 million — and have the largest percentage (80 percent) of all age groups paying all-cash.
By stark contrast, wealthy buyers 45-64 paid an average of $2.7 million for their most recent home purchase while buyers 65 and older spent just $1 million.
The report brought to light strong gender gaps:
Seventy percent of women reported paying all-cash for their most recent property vs. 57 percent of men.
Women reported buying more expensive homes than men:
Twenty-two percent of women spent $10 million or more for their most recent property vs. 13 percent of men in the same wealth bracket.
Forty-six percent of women have plans to buy another home in the coming year, up from 31 percent in 2013.
Location, location, location may no longer be the golden rule of real estate:
With the ability to work remotely now a reality for many, only 25 percent of the under-35 age group indicate that location dominates their search criteria.
Instead, 75 percent say that lifestyle considerations are the No. 1 factor driving their choice of which home to buy.
As evidence of this powerful generational shift, 86 percent of buyers 65 and older say that location remains their top priority.
Hottest In-Demand Amenities:
Nearly one-third of all wealthy buyers under the age of 45 count a “green” or “LEED certified” home as more important than it was 3 years ago.
The trend is also catching on among wealthy buyers of all ages, with 21% saying that they want to buy an eco-friendly home, up from a mere 7 percent in 2013.
As homes become increasingly high-tech, 25 percent now consider a fully automated home a priority.
Thirty-seven percent of respondents under age 35 and 30% of those with a net worth exceeding $10 million will prioritize safe rooms in their next homes.
The full list of the Top 20 Best Performing U.S. Cities in Luxury Real Estate by price points of $1 million+, $5 million+ and $10 million+, and the high-net-worth consumer survey results can be viewed here www.previewslmr.com.