Real Estate Continues to Drive the American Dream for the Affluent Domestically and Abroad

Fortune & Coldwell Banker Global Luxury April 14, 2023

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Real Estate Continues to Drive the American Dream for the Affluent Domestically and Abroad

From glamorous, sprawling mansions to full-floor penthouse abodes in major cities, many things may come to mind when one thinks of luxury real estate. Do you ever find yourself wondering, “Who lives in these extraordinary homes?”

The Coldwell Banker Global Luxury program set out to find the major power players and trends carrying the luxury real estate sector. In the newly released The Report 2023, paired with an international luxury consumer survey conducted by Censuswide of more than 1,200 high-net-worth individuals from 12 countries, the insights we gleaned were remarkable, going beyond traditional real estate data to give us deeper knowledge into how the luxury landscape in the U.S. and overseas is shaping out in the year ahead.

We found that affluent consumers remain upbeat about the opportunities that lie ahead, as they continue to look for ways to flex their spending power, and prioritize family, health, wellness, and financial stability. Younger generations prioritizing secondary homeownership around the world and ultra-high-net-worth individuals— classified as those with a net worth of $30 million-plus and up in The Report—are

driving the market, molding their real estate influences with their lifestyle preferences and wealth-building strategies in the years to come.

 

Younger generations seek secondary homeownership across the globe

Generation X and millennials are leading the way with their desire to own multiple homes. According to Wealth-X , both demographics have grown their wealth the most over the last three years as these individuals are more likely to seek out alternative investments, like real estate, to diversify their portfolios.

With the affluent placing their money in real estate, where are they moving to? The Report found that New York City, Silicon Valley, San Francisco, Los Angeles, and Chicago are the top five U.S. metropolitan areas driving secondary-home ownership among individuals with a net worth of $5 million or more.

U.S. luxury consumers are not just looking domestically for properties either; the propensity to own a home abroad is growing, thanks to the strength of the U.S. dollar and the rising costs of domestic living. Wealth-X notes that more than 64,000 overseas properties in 2022 were owned by U.S. consumers with $5 million or more in net worth, up 20% from 2021 and 115% over 2020. Our international survey backs up this claim: 91% of affluent Americans are most likely to own a home overseas.

 

Shifting definitions of luxury are changing the real estate game

The core definition of luxury has changed over the last three years, as the wealthy have grown from millionaires to multimillionaires. The influence of ultra-high-net- worth individuals will be a driving force in the luxury market in 2023. This group will continue to prioritize personal enjoyment and pursuit of new experiences, buoying the luxury sector as these individuals purchase more luxury goods and new homes around the world. According to Wealth-X, this ultra-wealthy demographic controlled an average of 50% of dollar volume of all sold properties in 2022 and could grow higher in 2023.

 

International consumers are dreaming—and acting—when it comes to U.S. luxury real estate

The luxury outlook from an international perspective is positive, with our survey finding that 80% of international consumers believe that U.S. real estate is a safe investment. Much like their U.S. counterparts, high-net-worth individuals from overseas are looking to real estate for a multitude of reasons, from their penchant for exclusivity and adventure, desiring homes in diverse locations, to investment opportunities and maintaining generational wealth. In fact, more than one-third of international consumers noted that one of their top motivations to purchase property in the U.S. is for investment.

Traditional centers of wealth and major U.S. markets continue to be hotspots for wealthy international buyers. Findings from our survey also found that affluent buyers desire to live in locations that are architecturally and culturally diverse, like Chicago, and luxurious resort towns, like Aspen.

 

The white-glove service of a trusted agent

As international and domestic luxury consumers dream of their next moves, Coldwell Banker Global Luxury Property Specialists are the affluent buyer’s connection point to new locations around the world.

In fact, our international survey found that 88% of luxury consumers are likely to use a real estate agent for an international home purchase, with an astounding 97% of respondents ages 25 to 34 likely to follow suit.

As more luxury consumers enter the market seeking their perfect homes, no matter where that dream location is, the luxury landscape is forever changing. Since 1906, our company has served as the North Star of real estate, with Coldwell Banker Global Luxury Property Specialists at the helm advising, evolving, and guiding clients to their next incredible homes.


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