BAM’s Key Details:
- Global real estate brand Engel & Völkers revealed five consumer trends driving the luxury real estate market in the U.S.
- Results indicate the luxury market will continue to thrive, with millennials as the key driving force behind it.
- Each subset of luxury buyers and sellers looks for specific qualifications when searching for a real estate agent.
Global real estate brand Engel & Völkers revealed the latest findings from its exclusive luxury market research in an original trend report.
That report details five consumer trends driving the luxury market in North America, specifically among luxury consumers looking to buy a home in the next few years.
The intent of the group’s research was to understand the dominant attitude, mindset, and intentions of luxury buyers, with insights into how luxury buyers search for real estate agents.
The luxury market’s shift to Millennials
Notable among the results is the finding that millennials are currently the largest generation driving the luxury market.
While baby boomers have driven the buying and selling of luxury real estate for years, this shift indicates a massive transfer of wealth and assets (including property) primarily to millennials. This generation plays a significant role in all five trends revealed in the report.
Five trends driving luxury homebuyers in 2023
#1: Peak luxury buyers
Fifty-nine percent of peak luxury buyers are millennials. As a whole, this group is looking to buy homes above the $3 million price point.
More than two-thirds have jobs that allow them to work from anywhere, and nearly all of them either own a second home or are planning to purchase one soon.
- 52% travel internationally twice a year or more
- More than half own multiple homes already
- 92% are likely to purchase a second home in the near future
- 71% plan to identify properties of interest online before contacting an agent
Their go-to sources for property listings—
- Web search
- Brokerage websites
Desired amenities include an outdoor pool, a home entertainment system, a gym and spa, sports courts, a three+ car garage, an outdoor kitchen, and a wine cellar.
And for peak luxury buyers, there’s no either-or; they want it all, and they can afford it.
How Peak Luxury Buyers Search for Real Estate Agents
These buyers rely heavily on social media—especially Instagram and Facebook—to learn about real estate professionals in their chosen markets. So, learning how to dominate these platforms and provide the content they want to see is critical to getting your foot in the door.
Start by researching real estate agents already serving this group and practice implementing the types of content that get the most engagement. Also, don’t forget to share any awards and accolades you’ve received as a real estate professional. For 96% of these buyers, these tokens of recognition and appreciation are important to their selection process.
#2: The next generation luxury influencer
Influencer culture has created a distinct subset of luxury buyers who curate their own personal brand of luxury and showcase it on social media.
Over half are millennials who invest in experiences and other external indicators of wealth and social position. And, of course, they share their lifestyles (or their favorite parts of it) with their followers, enjoying a reach that previously didn’t exist for individual consumers.
- 53% have jobs that allow them to work anywhere
- 42% purchased a home in the past two years
- 54% are planning to purchase a home in the next two years
- 70% plan to purchase a second home
- 34% travel internationally at least twice a year
How Next Generation Luxury Influencers Search for Real Estate Agents
This group values local market and luxury expertise in their real estate professionals. They’re planning to spend over $1 million on their next home. And they tend to have considerable influence in their offline communities—sharing word-of-mouth recommendations that can greatly benefit agents who provide a personalized, above-and-beyond experience for them.
That service should include exceptional communication and responsiveness, with both the readiness and skill to help evaluate homes, negotiate, and facilitate the closing.
Ninety-one percent of these buyers value luxury credentials when selecting a real estate professional. So, if you don’t have those yet, start building connections with those who do, and look for ways to add value without expecting a quid pro quo.
Be the agent they think of when they need help with a video tour, researching properties, or other services for their clients.
#3: International buyers
Sixty-two percent of luxury buyers in North America looking for property outside the continent are millennials or Gen Z. And this group is real estate savvy.
- 41% of these buyers already own more than one home
- 23% own three or more
- 27% own a boat
- 19% own or lease a plane
- 56% are looking for homes in urban areas
- 29% will have to look for a new job when moving to a different country
How International Buyers Search for Real Estate Agents
These buyers are looking for real estate professionals with resources and knowledge of both local and international markets—and who can accommodate their schedules.
The platform these buyers are most likely to use to find listings are brokerage websites. They value industry expertise and real experience dealing with luxury real estate. So if you’ve got it, make sure they can easily see it in your marketing material.
#4: Second home seekers
Luxury buyers looking for a second home are typically married millennials or Gen X with children living in their household. One-third are looking for properties in a region of the U.S. different from where they currently live. Nearly all want their second home to have amenities like swimming pools, gyms and spas, and 3+ car garages.
- 47% are millennials; 27% are Gen X
- 48% say rising interest rates have caused them to accelerate their homebuying plans
- 93% want a second home that’s conveniently near recreational activities
How Second Home Seekers Search for Real Estate Agents
What this group needs from a real estate professional is knowledgeable help with evaluating the pros and cons of different properties. What they look at most when choosing an agent are local expertise, their local reputation, and the reputation of their brokerage.
#5: Emerging affluence
These are first-time homebuyers—mostly made up of millennials and Gen Z—with household incomes of more than $100,000. They’re also more likely to have moved to a new city and to have started a new job within the past twelve months.
- 48% are millennials; 34% are Gen Z
- 38% have jobs that allow them to live anywhere
- 54% work from home only one day a week, if at all
- 17% travel internationally at least twice a year
- 46% want to buy a home in the city where they currently live
In choosing their next home, these buyers are most likely to consider the neighborhood vibe, walkability, and proximity to both restaurants (among other attractions) and work.
How Emerging Affluence Search for Real Estate Agents
Local expertise is the most important quality for 71% of these buyers when looking for a real estate professional. Nearly half (48%) will reach out to a knowledgeable agent for help before identifying properties they’re interested in.
We’re sensing a theme
By now, it should be clear that buyers at higher price points look for agents with extensive knowledge of their markets, as well as experience with luxury real estate. And while new agents may not immediately have access to luxury properties, they can start building their knowledge from day one.
Make it a daily priority to grow your knowledge and understanding of the industry and your local market.
Baby boomers will continue to have a lasting effect on our economy, empowering millennials with financial means to largely drive the buy side of the real estate market in the years to come. For real estate professionals serving the luxury segment, it’s important to understand and adapt to the evolving preferences of new generations who are taking up more space in the market. Continuing to serve as market experts and trusted sources of information will be vital to providing the personalized service and expertise that today’s consumers expect.
Identify the experiences and knowledge your ideal clients want to see and do what you can right now to start building both. Find ways to add standout value without expecting a reward. The best agents don’t wait to be found.