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The Luxury Home Buyer Defined

November 9th, 2007 · No Comments

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photo by James Northern

Coldwell Banker Previews released a profile of luxury homeowners from a study it conducted of its top luxury home sales associates who are also considered to be the world’s premier marketers of luxury properties.

The findings of the Coldwell Banker Luxury Homeowner Profile on coldwellbanker.com are as follows:

  • 31% are cash buyers
  • 68% are considered “new money”
  • The number one profession among these home buyers is classified as “Large Business Executives”
  • 67% are from the “baby boom” generation (between the ages of 35 and 55)
  • 88% of luxury home buyers are married
  • Designer kitchens are the top priority with regard to luxury-home amenities
  • 89% of luxury homebuyers request a four or five bedroom home
  • Approximately half (49%) of luxury homes sold by Coldwell Banker sales associates have between 4,000 and 6,000 square feet

The Coldwell Banker Luxury Homeowner Profile offers additional insight into the professions, lifestyles and financial wherewithal of luxury home buyers:

Financial Clout:
Financial clout is the name of the home-buying game among luxury house hunters. Evidently not as dependent on lower interest rates to make the move, nearly one-third (31.5%) of buyers paid cash to purchase their one million dollar plus home. Of those who choose to take on a mortgage, 17% placed a down payment that was 50% or more than the price of their new luxury home.

The survey also discovered that despite paying a big price tag for top-of-the-line homes and amenities, 41% of these luxury homebuyers still plan on investing more money in the home by doing major renovations. In terms of negotiating style, the top luxury homebuyer’s tactic was described as “close to the vest, minimum divulgence” (63%), versus “hardball” (24%) and “money is no object, I just want it” (13%). Additionally, it seems these homebuyers use these negotiation tactics successfully to get the best price as the survey indicated that only six percent actually pay over the asking price.

Career Paths Toward Luxury Home Pathways
While business executives of large corporations are the number one profession among luxury homeowners, entrepreneurs who own their own businesses are at a close second. That could be one reason why Coldwell Banker sales associates define the wealth of their rich clientele as “new money” (68%), versus ” old” or ” inherited money” (11%). Other top professions (in order) of buyers of million dollar plus homes were: doctor, banker, lawyer, stockbroker, actor, musician and inventor.

Demographics :
Two-thirds of these homeowners are from the ” baby boom” generation (between the ages of 35 and 55), but 28% are moving into luxury properties as they approach their retirement years (56 years and older). Only 4% of luxury homeowners are under 34 years of age. Eighty-eight percent of luxury home purchasers are married, of which 55% have children. About 1 out of 10 are single (6% men; 5% women). Seven out of 10 luxury homebuyers (72%) come from the same state where they buy their new home, of which 55% are from the same city. Twenty-four percent come from out of state, while 3% hail from another country.

At Home and In Style:
It is understandable that these luxury homebuyers are looking for particular lifestyle items and amenities to enjoy – in the comfort of their own home. Whether cooking for themselves or employing their own chefs, designer kitchens are the number one priority for luxury homeowners. Following kitchens, the top five most requested amenities (in order) are: media/entertainment room with theater-style seating, wine cellar, tennis courts/basketball courts, indoor pool and ballroom/cigar room.

Which proverb is true: ” Less is more,” or ” bigger is better”? When it comes to number of rooms and square footage, it seems that size is relative: Average number of bedrooms a luxury home customer requests when looking to buy a new home (In order of ranking):

  1. 4-5 Bedrooms (89%)
  2. 3 Bedrooms or less (5%)
  3. 6-8 Bedrooms (4%)
  4. 9 Bedrooms or more (2%)

Total square footage averages within the luxury homes that were sold in the past year through the Coldwell Banker sales associates polled (In order of ranking):

  1. 4,000-6,000 square feet (49%)
  2. 2,400-3,999 square feet (37%)
  3. over 6,000 square feet (12%)
  4. under 2,500 square feet (2%)

Here’s also a short video about the Coldwell Banker Previews program for exceptional properties.

Tags: Luxury Homes