The Mindset of the Luxury Real Estate BuyerMEDIA ROOM
Thanks to the Sotheby’s International Realty® brand’s relationship with The Wall Street Journal, Malta Sotheby’s have special access to the paper’s custom research. “The Mindset of the Luxury Real Estate Buyer” is a study commissioned by The Wall Street Journal among print and digital subscribers.
The goal of the study, which was conducted earlier this year, was to understand the drivers behind their home purchase decision-making process and their impressions of the real estate marketplace. Many of the insights gathered in the study confirm the findings of the Sotheby’s International Realty Luxury Lifestyle Report, which was issued earlier this year. The importance of lifestyle as a factor in a real estate purchase, as well as the value of real estate as an investment were key themes in both. Below are some of the key highlights.
Outlook is bright
- Worldwide growth of high net-worth individuals in 2014 accelerates at fastest rate since 2000
• Record high: 14 million, a 15% increase year-over-year
• Million-dollar homes selling at two times the historical average, an 8% increase year-over-year
• Cash purchases at an all-time high at 45%; up from 30% in 2012
- 91% own their own homes and estimate the value of their principle home increased almost
10% in two years
Spreading their Wealth
• Two-thirds agree that “real estate investments help me diversify my portfolio”
- Nearly one-third own vacation/secondary homes, the average number of homes owned is 2.3
More Money, More Homes
• Respondents with household assets of more than 5 million own an average of three homes
Optimism is high
- Optimism is high among all key U.S. markets: the national average is 80% agreeing that the “residential market will improve over the next 12 months.” This is up 16% versus 2012 Cash is King: 50% of total respondents plan to pay in cash for their next home purchase, and 72% of high net-worth respondents.
Outside the U.S.
48% considering a purchase outside the continental United States
Luxury buyers want to live globally
Alaska, South Pacific and Europe top in growth, Caribbean/Mexico and Hawaii in volume.