While at Luxury Portfolio International in Las Vegas this week, I tried to stay away from Blackjack and the Craps tables and soak in all the hot deets for you from the world’s leading experts on everything luxury. The most important take-away for me was this: luxury is back and hello, the consumers are younger than ever!
Consider this: 36% of all young real estate buyers today grew up wealthy! They do not know what life is like in a home without a media room and at least three garage doors that open electronically. These kids are educated, working (some), and have high expectations – no pun intended on Colorado pot.
Have you seen Rich Kids of Beverly Hills?
The “young affluents” are defined as consumers under age 50 who are in households with discretionary incomes of $100,000 or more. So like young professionals, and what we used to call “dinks” — double income, no kids.
And of course, the rich kids.
You know how for awhile we heard that young people were not buying homes? WRONG!
According to a Harrison Group report prepared for American Express, Young Affluents, as they are called, value homes and home ownership as much as older consumers do – maybe more.
21% of young affluents bought a primary home in the last three years.
20% plan to buy a primary home in the next 1 to 3 years, if they have not already, and…
12% plan to purchase a second home in the next few years. Yes, that’s right — grandpa’s not buying the lake houses out in Long Cove on Cedar Creek Lake, Young Affluents are, for their kiddos!
This is especially true here in Texas, where our market is among the strongest in the country. The latest Case-Shiller report tells us that North Texas home values are up by 10.2% from last year, and Dallas was one of just six cities to show one-month gains. The others were Las Vegas, Miami, San Francisco, Tampa, Fla., and Washington, D.C. Of those markets. only San Francisco and D.C. were not on Skid Row during the bust. Our real estate never bubbled, so it never bombed.
Now, however, agents tell me it’s almost deja vue 2006.
According to the Harris Poll, Young Affluents value home ownership just as much as their parents do. They just buy it differently, leveraging technology through every step of the process. Technology has changed how buyers deal with every single human in the home buying process, and these guys embrace it.
78% of Young Affluents work full time (or more), compared to only 51% of Affluents over age 50 who work, 75% of Young Affluents are married, and 41% who are not plan to be married in the next five years. They are prolific: 63% have kiddos under age 18, and 27% who don’t have kids plan to have them in the next five years.
What else? These kids shun debt and 68% have no credit card debt. And 25% of them are saving up. That’s the same percentage amount saved as the over-50 geezers like me. They are tech savvy and as we said, use technology for everything. They download apps: 33% of Milennials, 17% of Gen Xers and 10% of Older Affluents have apps that alert them when things go on sale. Like Louboutins. They are engaged in social media, of course, and more than a quarter engage with companies over social media to share their experiences and give product feedback.
But all those devices and social media have led this generation to be less reliant on salepeople than any other generation. Consumer’s reliance on salespeople is totally waning: three quarters of the affluent and wealthy say they rely less on salespeople today, and three quarters feel they can get better, faster, more accurate service and information on the internet.
A clear 81% of Young Affluents believe they get better quality info on the internet than in dealing with salespeople.
Want to meet this crowd? Guess where you will have to be!