A recent report indicates that real estate remains in a strong position for the remainder of 2022 and heading into 2023 as more affluent consumers are turning to real estate to diversify their portfolios and as a long-term investment strategy.
In fact, 80% of U.S.-based high-net-worth consumers agree that real estate is a safe investment, and over one-third agree that it is the safest investment one can make when compared to stocks, bonds, cryptocurrency and pensions, according to The Trend Report by Coldwell Banker Real Estate.
Thus, REALTORS® could pivot in their leads-finding strategy in these challenging times to seek wealthier clients interested in adding investment properties to their portfolios.
“While the luxury property market is now trending toward balance, there is still insatiable demand from wealthy buyers looking to diversify their portfolios and build long-term wealth through investing in real estate,” says Michael Altneu, vice president, Coldwell Banker Global Luxury. “This strategy really underscores the power they still have when it comes to purchasing the properties they desire.”
Additionally, consumers are over three times more likely to think that 2023 will be a better time to invest in real estate compared to 2022—rising a whopping 42% from only 11% a year ago.
A consistent theme throughout the report, as found through survey findings, is that investment is continuously top of mind for the wealthy, no matter the market environment. Affluent consumers consider real estate a prime asset for building, maintaining and growing wealth.
Traditionally seen as a hedge against inflation, real estate has the ability to provide financial, emotional and psychological stability in the face of rising uncertainty. Over time, most home values typically appreciate, underscoring how affluent consumers play the long game when it comes to financial and lifestyle investments today.
The luxury real estate market has shown resilience, leaving buyers with plenty of purchasing power to still acquire the home they desire. Affluent buyers remain bullish as most continue to see the value of property investment.
“Luxury real estate investment continues to be hot for wealthy individuals in the U.S. and abroad,” notes Liz Gehringer, president of Coldwell Banker Affiliate Business and COO of Coldwell Banker Real Estate LLC. “Those consumers who don’t need to move and have capital to spend will continue looking elsewhere for opportunities to grow their wealth through investments in smaller homes.”
To view the full report, click here.