by Steve Harney on March 9, 2010
Whenever you are selling anything, it helps to have an idea what your customer is thinking. I had the opportunity to attend a session at the Luxury Portfolio Summit in Las Vegas which covered the findings of the Survey of Affluence and Wealth in America 2010 produced by American Express Publishing and the Harrison Group. Below are the highlights of the report which we received in the program for the event.
If you are selling a home in the upper price ranges in your region, you should find the following statistics rather interesting.
How do the wealthy feel?
- 70% still say their economic security has been affected and one-quarter are worried about losing their job or company.
- Confidence in political and business leaders remains very low.
- The savings bubble persists.
- Desire for “value” and budgeting are mantras, but NOT at the expense of quality.
What about the economy?
- 93% say the country is still in a recession.
- 60% feel the recession will last at least another year.
Are the wealthy ready to start purchasing again?
- There are positive signs that wealthy consumers are ready to re-engage in the marketplace, including luxury and high-end.
- When they do, they will not be the same customers as pre-recession…today’s engaged consumer are now more self-sufficient and are practicing due-diligence.
- Most were raised middle-class and the economy has reinforced the values of saving money and spending wisely they were brought up with.
- People are being selective in how they re-emerge in the marketplace. There is no “all in”.
What will be the impact on the real estate market?
- 72% view real estate as an opportunity and over half (54%) agree that the real estate market will bounce back soon.
- 19% say they are “in the market” to acquire real estate (35% of the wealthiest consumers).
- 42% private homes/30% vacation homes
- Location trumps price.
- The relative importance of luxury amenities has declined…quality of the home is the key.
- Not stepping down in quality, but may be stepping down in size.
- Many will start to look only after doing research.
What does this mean to you?
Today’s luxury buyer will not get caught up in over-the-top indulgence as buyers of the past decade had. They see the home as a sanctuary where they can enjoy the company of friends and family not a trophy to brag about. They want value but won’t overpay for it. Prices must be reasonable.