A recent real estate report suggests that there are a number of trends within the luxury real estate market that are tied to generational cohorts. There also other trends that are spanning all buyers, such as increased interest in certain high-end features. With the La Jolla luxury real estate market being one of the top 20 in America, these trends may lead to increased buyer interest in some features over others possessed by luxury properties in La Jolla. They may also lead to more investment property purchases in La Jolla in the coming year.
The report suggests that buyers are showing increased interest in investment properties within the luxury market. Active interest has increased from 48 percent last year to 54 percent this year, with 33 percent of buyers planning to make an investment property purchase in the near future. This is an uptick from 21 percent planning to make a luxury real estate purchase in 2014. Given these figures, it’s likely that there will be an increase in La Jolla’s luxury real estate market sales in 2016.
On average, buyers are investing 38 percent of their total net worth in luxury real estate, usually split between two properties. Naturally, reasons for purchasing a luxury home vary, but according to the report, a large percentage of today’s buyers are eyeing the investment appeal:
Reasons for making a luxury home purchase:
- 40% investment appeal
- 39% desire for a specific location
- 38% real estate is a safer investment than the stock market
Millennials are leading the charge in purchasing luxury properties for real estate investments, with 69 percent planning to purchase a property in the next year. This figure is nearly 20 percent higher than that of Gen Xers, only half of which have plans to buy soon. Baby Boomers round out the list, with 17 percent planning to make a luxury home purchase in the next year.
Based on the data, Inside Out real estate blog reported that rising home prices don’t seem to be dissuading buyers, especially those in younger cohorts. In fact, younger generations are purchasing homes at higher price points than other buyers.
Gen Xers are leading the charge with an average luxury home purchasing price of $5.24 million. Millennials are falling in right behind them with an average luxury home purchase price of $4.96 million. Baby Boomers are spending an average of $1.55 million on luxury home purchases, which suggests that this cohort is downsizing into smaller luxury home models.
Overall, the average home purchase price across all cohorts was $5 million. The La Jolla luxury real estate market was listed as the 12th in the country for properties valued at $5 million. La Jolla’s real estate market also ranked 16th for active listings valued at $5 million and 20th for closed listings valued at that price point, proving once again that La Jolla real estate is highly sought-after.
The features and upgrades buyers are interested in are just as varied as their reasons for purchasing luxury homes, but trends do occur. According to the report, the greatest demand in today’s luxury home markets in La Jolla and across the nation is for move-in ready homes. They topped the wish lists of 43 percent of those polled, which is an increase from three years ago. Buyers also want modern technologies and green homes. Many of the most requested features are in higher demand today than they were a few years ago:
Most desired luxury home features
- 41% fully wired and automated homes
- 36% LEED-certified green home
- 36% open floor plans
- 34% gyms
- 32% home theaters
- 30% safe rooms
Millennials also led another poll, but this one was about their beliefs concerning the home purchasing process. When asked, 85 percent of polled Millennial luxury home purchasers stated that they can have a lifestyle where they can live anywhere. They believe that they can purchase a home in an area that “truly fits my lifestyle and not limit my search based on location.” This belief is likely seated in the reality that a number of employers are extending telecommuting options and providing other resources and accommodations that make a “live anywhere” lifestyle easier to pursue.