The real estate landscape is ever-evolving. Changing work environments and the continued prevalence of remote work have impacted buyers, whose needs and wants continue to develop and change. Over the past year, we’ve seen a new class of luxury homebuyers emerge. From the Crypto Visionary to the New American Rancher, each of the luxury home buyer personas poses a variety of distinct needs unique to their lifestyle and personal definition of luxury.
The Homeward Bound Millennial
Millennials have emerged in the real estate market as an undeniable force, responsible for 43% of all homebuyers in 2022. Entering a seller’s market, with record-low inventories and record-high prices, the wealthiest millennials are taking their big-city salaries to the suburbs. Here, they can skip the starter home, work remotely, and enjoy life as a new homeowner with proximity to friends and family.
Over the last few years, millennials’ values have shifted, piquing their interest in homeownership and its respective responsibilities. Higher salaries, the opportunity to increase personal wealth, and built-up savings (from spending time at home, inheritances, etc.) are pushing millennials to reconsider renting. Further, the desire to start a family and/or keep up with friends has incentivized the generation to purchase a home.
The New American Rancher
Aged between 56-65, the New American Rancher has the most savings and the highest budget of all our buyer personas. They are in search of a unique, western property to fulfill their lifelong “Wild West” dream. The home celebrates the New American Rancher’s successful career and establishes a center for friends, family, and future generations.
The New American Rancher is in a transitional period—during which their career is less demanding— enabling a move to the west or midwest of the United States. Here, the New American Rancher and their family can enjoy an outdoor lifestyle and all the amenities of the turn-key properties being developed in these burgeoning communities.
The Crypto Visionary
Cryptocurrency, the source of this persona’s wealth, is one of the most up-and-coming topics within real estate and the world at large. Crypto Visionaries are using their newfound wealth from digital assets to purchase incredible, luxury homes in metropolitan areas that embrace similar values and mindsets. To the Crypto Visionary, remaining aware of the newest technologies, practices, and processes is of the utmost interest and importance.
The Crypto Visionary will be drawn to new, city constructions that are both innovative in design and processes. Wherever their next property may be, part of the appeal for the Crypto Visionary is that a transaction completed with cryptocurrency will likely make headlines for setting new precedents in real estate.
The Eager International Buyer
The pandemic has impacted each buyer persona—none so heavily as the Eager International Buyer. As the name suggests, the Eager International Buyer is keen to buy real estate in the Americas after international mandates and travel restrictions have limited their buying power. The National Association of REALTORS® (NAR) reported that the dollar volume of foreign buyer purchases was $54.4 billion USD from April 2020 to March 2021, a 27% decline. NAR’s data also reveals a 31% decline in sales volume.
This story changed, however, throughout the end of 2021 and the beginning of 2022 as travel restrictions were lifted globally. The Eager International Buyer became just that—eager (and now able) to buy properties around the world. These buyers purchase properties for a number of reasons, most commonly to rent them out, live there, or use them for business purposes. Rentals and vacation homes led the pack, accounting for 42% of international sales in 2021.
The Renaissance City Dweller
After a pandemic-induced move to the suburbs or rural areas, the Renaissance City Dweller is returning to their previous urban lifestyle—often to the same neighborhoods and cities from which they left. While the Renaissance City Dweller’s isolated, rural home was a good fit for a pandemic, to this buyer, outdoor adventures are no match for the excitement of city life.
During the Renaissance City Dweller’s time away, however, prices in major cities have jumped up to 30% from pandemic lows—rebounding to higher-than-pre-pandemic prices, indicative of the increase in demand for urban residences.
The Renaissance City Dweller returns to urban life with a newfound appetite for apartments, condos, and single-family homes with access to the outdoors or private outdoor space. A spacious residence with room for a home office is also on this buyer’s list of requirements.
The Year-round Vacationer
As remote work options have sustained popularity despite pandemic restrictions lifting, it has become more viable than ever to live (and work) wherever you want. Instead of being tied to the city where they are employed, the Year-round Vacationer has the opportunity to prioritize their preferred lifestyle above all else when buying their first home. This preferred lifestyle could be anything from skiing or surfing to wellness and healthy living.
Similar to the Homeward Bound Millenial, high urban home prices have led these buyers to purchase their second home first. The Year-round Vacationer may actually live in their property year-round, or they may rent out the property while maintaining their original rental property, creating a passive cash flow through their investment. In the United States, vacation rentals are projected to reach $17.66 billion USD in 2022, a testament to how lucrative a vacation home can be.
The usage of these homes is entirely flexible to the owner’s schedule. Some Year-round Vacationers rent their homes consistently, and some like to use the property for themselves more frequently. That flexibility is important to this buyer group, who want to live a life immersed in their passions and interests.
Looking for more insight into these emerging luxury real estate homebuyers? Click here to flip through Engel & Völkers Luxury Homebuyer Report.
