In a recent episode of our “Estate of Mind” podcast, we were fortunate enough to sit down with Andrew Hong, co-founder and CEO of digital marketing firm Tobe Agency. In this episode, we spoke with Hong about his own experience as a millennial buyer in the luxury real estate market. We encourage you to listen to the entire episode here—as we gained some very valuable insights into the “luxury millennial mindset” and what today’s millennial buyers are prioritizing in the purchases of their first or even second properties.
What drives millennial decision-making in luxury real estate?
In part one of this podcast episode, Hong discusses his recent move from Los Angeles to Salt Lake City, along with all the decisions and nuances that ultimately went into the purchase of his home. He explains how he and his wife had their first child while living in Los Angeles, but were quickly outgrowing their space and desired to move somewhere that would offer more land and amenities.
In many ways, this seems to be the emerging trend among millennial buyers in the luxury market. Simply put, lifestyle has quickly become more important than location alone. By moving away from crowded cities where the cost of living is high, millennials can get the larger plots of land they desire with more amenities to boot. And because remote work is becoming the new “norm” (with more than 36 million Americans predicted to be working remotely by 2025), it’s easier and more practical to relocate and ditch the commute altogether.
In addition to prioritizing lifestyle over location, many millennial buyers are now beginning to start and grow their families. As a result, they’re looking to move to places where schools, infrastructure, and amenities are available. This has made certain markets (such as those in Salt Lake City, Nashville, and Austin) very desirable to luxury millennial buyers.
For many of these buyers, the home itself is often the largest financial purchase to-date. When looking to spend their money, they aren’t willing to compromise on a home that doesn’t meet all their needs. Likewise, these buyers are generally not looking for older homes that will require extensive renovations to meet those needs. Instead, they’re looking for move-in-ready and turn-key homes that they can move their families into without having to make any changes. For this reason, new construction luxury homes remain extremely popular among this group of buyers.
From a price perspective, millennial buyers also tend to be willing to move to a “new” or up-and-coming area of the country if it means they’ll get more for their money. This is a smart financial decision because it enables them to use their “savings” to purchase additional properties and acquire more real estate. This, in turn, helps them grow their wealth.
What does this mean for luxury real estate professionals?
As more millennials begin buying homes in the upper tier, luxury real estate professionals will need to have a solid understanding of where they’re coming from and what matters to them. In doing so, you’ll be able to better serve your clients—regardless of whether you’re helping them purchase their first luxury home or make a second (or third) purchase in a new area.
Because so many millennial buyers are willing to move just about anywhere in the country that suits their needs, this also makes networking and referrals more relevant and important than ever. If you haven’t already built up a strong referral network across major United States cities, now is the time to focus on doing just that. With an extensive referral network, you’ll have the best chances of being able to serve your millennial buyers and help them find exactly what they’re looking for.
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Understanding different demographics and what drives their buying decisions is a must in the luxury real estate market. This is especially true for younger markets that may be emerging, such as that of the millennial buyer. More than ever, these buyers are looking for properties that allow them to live their best lives without making sacrifices—and they want the same for their families.
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For more information, visit https://blog.luxuryhomemarketing.com/the-luxury-millennial-mindset-explained/.
