What is Considered "Luxury" When it Comes to Real Estate? It Depends on Who You Are

Real estate brokers, just like every other businesspeople, need to understand the demands of their consumers. Now that it’s almost 2016, recognizing the wants and needs of the Millennials or Generation Y (people born in the late 1980’s through the early 2000’s), is imperative to staying on top of the market. A lot has changed since the Baby Boomer generation made up the majority of the work force and the consumer market; by 2017, Millennials are expected to outspend their parents. According to the CNBC, Generation Y has approximately $200 billion in direct purchasing power, and accounts for another $500 billion by influencing their Baby Boomer parents.

When it comes to Generation Y, it is crucial to understand that “luxury” drastically differs from the way previous generations have defined it. Luxury companies like Lexus, BMW, Viking, and Coach are finding their logos alone don’t carry as much weight in desirability as they once did. Millennials are more likely to research what they’re getting for the additional money besides the name, so competition is at an all-time high for new innovative technologies; and “what’s new” is a concept that all manufacturers and sales agents need to keep in the front of their mind when dealing with their younger clients/customers.

As far as Real Estate is concerned, Millennials are just as particular about what they’re looking for, but across the board, they tend to want to live in urban, trendy neighborhoods. Generation Y is not afraid to sacrifice on property size, in favor of sought after, in-town locations. They also want newly refurbished properties or new construction – they want a home to be move-in ready as opposed to a fixer-upper. Residents who are looking for these bustling communities generally see the neighborhood in which they reside as an extension of their personal living space, and like being in the center of the action. The boom of social media has made being surrounded by peers, entertaining friends, and having positive experiences a top priority for the thirty-somethings.

According to Ink.com, Boston ranks #6 as the most desired city to live in for Millennials, and so Wellesley, with its proximity to the city, and its thriving town center for shopping, dining and entertaining is a popular choice for this part of the population.

Wellesley, and adjacent towns like Weston, Natick and Dover are also top choices for the parents of the Millennial – the Baby Boomers. They actually have some commonalities on their respective real estate wish lists, and although Baby Boomers only make up 25% of the United States population, they account for 70% of its financial assets. More so than any other generation, they see the value in real estate. However, unlike past generations who decided to downsize to smaller and less expensive homes when they started to age, these empty nesters have another plan in mind. Many of them are looking for homes that are configured a little differently – with one-floor living and big, open spaces that enable them to host the grandkids and extended family. Others are moving into luxury condominiums in the suburbs, or the city. Across the board, though, they tend to not downsize financially, which is a trend not seen with previous generations. While 80% of Baby Boomers own a home, 25% of all Boomers own a secondary property as a vacation home or rental – so they have choices on where they can live and often move around depending on the season.

For Real Estate brokers, it’s a challenging but exciting time to work in a field catering to so many different needs -- finding properties that appeal to such a diverse clientele. With generations across the board recognizing the value of real estate, as both an investment for the future and a place to make memories, finding the ultimate “dream home” for clients is what makes the profession more popular than ever.