The State Of The Luxury Market
Since the start of the pandemic, buyers looking to buy a home have struggled with bidding wars and a limited number of houses for sale. How has this affected the luxury market in our area?
Our sales professionals are finding luxury properties that meet the demands of today’s buyer in northern New Jersey are in high demand this year, a sector that traditionally took longer days on market to go under contract than lesser price ranges. We can thank the young millennial buyer for this boon to our luxury property sales.
At 38% of the U.S. population, millennials—adults born from 1981 to 1996—represent the largest share of home buyers in the country according to the National Association of Realtors. They have waited longer to purchase their first home as they built their careers. This generation is the most educated generation in history, have higher earnings and are set to inherit more than any prior generation, according to a May 2020 report by the Brookings Institute. They also have the means to buy right now because their delayed real estate purchase allowed for higher savings, and they can take advantage of historically low mortgage rates.
Unlike their parents who embraced the idea of first purchasing a “starter” home at a younger age, this generation has waited so they could go big.
Millennials have been known to change the status quo, whether it’s demanding more options for remote work or raising families in an urban environment rather than settling in the suburbs. Characterized for being tech savvy and environmentally conscious, this age group is now redefining the luxury real estate market.
For owners willing to make their high-end properties "move-in ready," for this new generation of luxury buyers, those efforts are often rewarded when buyers pay top dollar. Here are a few of the features millennial home buyers desire:
- Functionality: Space is not as important to millennials as functional, flexible use of every area. Most important is the ability to change the current use of rooms to meet their unique taste. Consider how to stage a bedroom, for example, to become a yoga studio or additional office space.
- High end amenities: Open concept living areas, showcase kitchens, spa bathrooms, wine cellars and media rooms are all important to this buyer’s desire to entertain.
- Connectedness: Creating a smart home filled with smart appliances, speakers, thermostats, security systems, lighting and audio systems speak to this generation’s tech savvy profile.
- Private work space: In the post pandemic world where many professionals are working from home, an area that is quiet yet comfortable and fast internet access is an absolute must. And since, many in this generation are two-income professionals, think times two!
- Think green: Millennials care about the environment...but they also like saving money! Energy efficient features such as solar panels, air purification systems, geothermal energy and tankless water heaters are among the things that are considered a bonus for any property by this age group.
- Neighborhood: Before the pandemic, millennials flocked to urban locations and only considered suburban locations that had walkability. While this can still be something they look for, more important is a neighborhood where they feel they can have interaction with like-minded individuals.
- Outdoor living spaces: Privacy and outdoor space have become crucial since the pandemic. Outdoor kitchens and fireplaces, spas and gardens are all important features...and making them feel like an extension of the indoor space will add to the appeal. And, these buyers aren’t just looking for themselves...their pets are a high priority so specific space to accommodate Fido is important.
Without a doubt, millennials are taking the housing market by storm, and they’re looking for something different than previous generations of home buyers. Our Terrie O’Connor sales professionals are very familiar with staging properties for this new buyer and can help you prepare your property to get top dollar.