How is the Luxury Home Market Being Impacted by the Next Generation of Buyers

While some millennials still live at home, there are others buying luxury homes. ESTATENVY breaks down how that’s shaping today’s real estate industry.

While some millennials are entering the real estate market as first-time homebuyers, there’s a segment of the group that’s already looking for luxury homes. According to Bloomberg, prospective homebuyers under the age of 50 account for most of those shopping for homes that cost $1 million or more. And they have a specific idea of what they’re looking for—a report from Luxury Portfolio International shows that a quarter of high-net-worth consumers between the ages of 25 and 49 are looking for at least 20,000 square feet in their homes. Those trends and qualifications are shaping today’s luxury home market.

To gain a better understanding of how millennials are impacting the luxury home market, ESTATENVY spoke with Maria Cuadra, a real estate broker and owner of The Cuadra Group, and Dawn Bremer, who leads the Bremer Team out of Keller Williams’ North Shore West office in Chicago. And according to Cuadra, the biggest thing that millennials are changing when it comes to the luxury home market is the simple fact that they can now afford to buy.

She said, “Millennials like speed; fast service. They are also filtering out the real estate agents that don’t use technology and who don’t advertise on social media. They are also educated buyers because of all the available resources. They can afford homes in the luxury market or in a higher than usual price range because they are more financially stable—having come out of a huge recession and learning the importance of stability, I think this is a stand-out trait.”

However, not all millennials are in the market for a luxury home—or even a home at all. Following the recession, realtors are still battling a trend of millennials living at home with mom and dad, which ultimately signals a fear of buying.

“Current data shows that about 32 percent of Americans between the ages of 18 and 34 are living at home with their parents. That’s not an insignificant portion of the population—that’s about 25 million millennials. That fear of purchasing is having a huge impact on how today’s housing market is,” Bremer said.

But for those millennials that can afford luxury homes, Bremer says that they’re entering the housing market at a higher price point than previous generations. That’s then impacting the size of homes—and the amenities that come with—that people are looking for in today’s luxury market.

Bremer said, “You also have the other half of millennials who are actually making more money than their parents ever dreamed of. Those are the people who are buying homes in luxury markets and moving their parents in with them as full-time nannies, which is also drastically shifting today’s luxury home market.”

That shift in the luxury home market is an indication that high-net-worth millennials are willing to spend their hard-earned wages on top-tier homes. And as more of these potential buyers enter the market, the luxury home segment of today’s real estate industry will continue to change.

Said Cuadra, “Millennials may be known for their tech-friendly personalities, but one thing never changes—no matter when or where you are from, hard work will always pay off.”