Millennials are Changing the Luxury Real Estate Market

In sharp contrast to the “slacker” stereotype that has defined their generation, millennials aren’t living in parents’ basements. They’re buying multimillion-dollar homes.

At 38%, millennials—adults born from 1981 to 1996—represent the largest share of home buyers in the U.S., according to a survey by the National Association of Realtors released last year. “They’re just as interested in owning a home. They just waited longer to buy their first one,” says Bradley Nelson, chief marketing officer of Sotheby’s International Realty.

Breaking from the notion of a “starter home” that older generations embraced, wealthy millennials, Nelson says, are going big.

relates to Millennials Are Changing the Luxury Real Estate Market
This $17.5 million, six-bedroom home is on the market in Austin, Texas.
Photographer: JP Morales for Kuper Sotheby’s International Realty

“In the past, people bought a modest property, lived in it until starting a family, and then traded up to a larger property,” he says. “Millennials are finally coming out of the gate, and it’s not uncommon for the first purchase as a first time homebuyer to be a multimillion-dollar luxury home in the U.S. or internationally.”

As a result, millennials are quickly becoming a dominant force in high-end real estate.

relates to Millennials Are Changing the Luxury Real Estate Market
This $46 million house for sale in Aspen, set on 115 acres, contains 17 bedrooms.
Photographer:  Michael Brands for Aspen Snowmass Sotheby’s International Realty

Millennials are the most educated generation in history, have higher earnings, and are set to inherit more than any prior generation, according to a May 2020 report by the Brookings Institute.

Characterized by their tech savvy and environmentally conscious values, millennial preferences are poised to dramatically shape the market, a dynamic that has been on display during the Covid-19 pandemic. Beginning almost immediately after the coronavirus hit, for instance, buyers began to flock to areas that offered walkability, nature, and a well-rounded quality of life. (Think food and an art scene.)

Total sales volume in Aspen hit a record high of more than $1.5 billion in the third quarter, while in some neighborhoods of Park City, Utah, median sales prices spiked by more than 50% during the summer, according to Sotheby’s 2021 Luxury Outlook.

Outside the U.S., the Mornington Peninsula outside Melbourne on Australia’s southeastern coast has also seen a similar influx, the report states.

Permanent Changes

relates to Millennials Are Changing the Luxury Real Estate Market
A $5.7 million home for sale in Koh Samui, Thailand.
Source: Kaya Estate for List Sotheby’s International Realty

Going forward, developers are likely to integrate touchless, high-tech features into more homes and focus on bolstering sustainability credentials in new buildings, Nelson says.

From energy-saving geothermal systems and solar panels to green roofs, “these are the features that are most attractive,” he adds. “If a home is move-in ready and environmentally conscious and has a Tesla charger installed in the garage, those homes are generating a premium, because you have so many buyers interested in competing for them.”

Overall, the luxury real estate market is ripe for growth.

According to a December Sotheby’s International Realty survey, 63% of affiliates polled said they expected luxury home prices to rise over the next three years in their respective markets. More than 70% of respondents reported heightened demand at the end of 2020.

Luxury Headwinds

relates to Millennials Are Changing the Luxury Real Estate Market
A mansion in Montecito, Calif., that’s on sale for almost $17 million sits on just over 4 acres.
Photographer: Matt Wier for Sotheby’s International Realty

In the short term, however, disjointed vaccine distribution and renewed quarantine restrictions could hamper foreign buyer interest. Only one-third of Sotheby’s affiliates expect to see an uptick in demand in the first half of 2021, according to the report.

Additionally, amid indiscriminate declines in overall tax revenues caused by the pandemic, governments globally are reassessing property and wealth taxes as a means of filling budget gaps.

“Across all buyers, tax implications are going to be larger part of their home-purchase consideration,” Nelson says.

For the fast-growing cohort of young, affluent buyers eager to snag their dream homes, millennials face slim pickings for options that meet their unique tastes. “Inventories are at near-record lows in general, and especially for the homes with the features they’re looking for,” he says.

Still, Nelson adds that with “wealth creation growing and cost of capital declining, it’s a promising storm for the high-end housing market.”

THE ‘BRILLIANCE’ OF RANCH HOMES

THE SINGLE-FLOOR HOUSES HAVE A CASUAL AIR, AND MELD THE OUTSIDE AND INSIDE SEAMLESSLY

Appears on  sothebysrealty.com

Ranch living keeps it on the level. Spread out over one floor, these homes are more casual than other styles, often lacking the symmetry of more classic designs. Buyers are attracted to that casual air, and the style maximizes indoor-outdoor living that adds to the feeling of ease. The homes can also allow for privacy, with clever layouts and landscaping.

Modern examples incorporate features like open-floor plans, floor-to-ceiling windows, and the latest technology into the build, but they are still centered on indoor-outdoor living.

The style flourished in places like California, where the weather allows for the outdoors to be an extension of the home most of the year. Many of these were built as suburban developments in the years immediately following World War II.

0593275

$4,995,000

Property ID: 0593275 | sothebysrealty.com

Sotheby’s International Realty | Santa Barbara Brokerage

Go to property

“In the 1930s, ’40s, and ’50s, most of the very good residential architects here in California were designing ranch houses; it was just part of their portfolio,” explains Irvine, Calif.-based architect Alan Hess, author of The Ranch House. “They are just excellently designed.” Architect Cliff May popularized the style, inspired by the adobe ranch houses owned by his family near San Diego, according to a 1986 New York Times article.

“I rebelled against the boxy houses being built then,” May, who died in 1989, told the Times. “The ranch house was everything a California house should be—it had cross-ventilation, the floor was level with the ground, and with its courtyard and the exterior corridor. It was about sunshine and informal outdoor living.”

$5,800,000

Property ID: Y7M5JS | sothebysrealty.com

Pacific Sotheby’s International Realty

Go to property

Y7M5JS

 

May built the first home in this style in 1931, and, over his career, designed more than 1,000 custom houses. The bulk of them were in California, but he also had projects as far away as Ireland, Australia, and Switzerland.

Modern architects are also melding cutting-edge design with one-level living. In Santa Barbara, Calif., local architect Ken Radtkey and his team at Blackbird Architects created a ranch-style home there in 2016. It incorporates a modern kitchen, dining, and living area as the center of the home, with the master suite and office separate from the additional bedrooms. Guests and residents can access the outdoors from almost anywhere in the home.

The home has modern sliding doors and floor-to-ceiling windows, and its curved roof creates a shaded outdoor living space. And the outdoor areas are just as well planned, with native and drought-resistant plantings, grass terraces, an orchard, a pool, gardens, and a koi pond with a stone waterfall.

The owner’s imported Moroccan doors have been incorporated throughout the house, creating a unique contrast to the home’s clean lines, according to the architect. There’s also a separate garage with an artist’s studio. Recently listed for just under $5 million, Montecito-based Sotheby’s International Realty agent Joe McCorkell is representing the property.

The Rancho Santa Fe home, has an open-foor plan
The Rancho Santa Fe home, has an open-floor plan.

Homes by May are still in demand, as well, according to Clara Yang, an agent with the Beverly Hills Brokerage of Sotheby’s International Realty. Yang is currently marketing a three-bedroom, two-and-a-half bathroom home designed by May in 1948. Located in the lower Mandeville Canyon area in Los Angeles’ Brentwood neighborhood, the home is listed for $3.6 million.

The kitchen and bathrooms of the 2,322-square-foot home have been updated, but much of the design remains the same, Yang says. “Wherever you are, there’s a door to walk outside,” she notes. “And there are windows throughout to let the light in.”

The home, built in a U shape, surrounds a courtyard with a firepit and mature landscaping. There are also two patios with fountains, a pool surrounded by a glass fence, and a pocket garden.

“It’s not like a modern house with an open-floor plan. It’s like a treasure hunt; there’s something different around every corner, ” Yang says. “It’s perfect for staying home, because each person can have their own space and everyone can meet up in the middle.”

Other May-designed properties do offer that open plan, however. A four-bedroom, five-and-a-half bathroom home in Rancho Santa Fe, Calif., boasts a flowing layout, as well as abundant natural light and a central courtyard that connects seamlessly to the indoor living areas.

Landscaping is key to ranch homes, and May is known for having brought in mature trees to plant on the grounds of his projects. This property is no different, note agents Eric Iantorno and Beth Van Boxtel of Pacific Sotheby’s International Realty. The home, built in 1973, sits on almost three acres and is currently on the market for $5.8 million.

“Cliff May used adult trees and plants at the time, and these days they are giant,” Van Boxtel explains. They include olive and pepper trees, plus a small fruit tree orchard, a vegetable garden, several kinds of berries, and a variety of tropical plants.

“The olive trees make it feel so romantic,” Iantorno notes. “And the details of the space—things are small and then expand, and that play on proportions makes it feel very special.” Single-level houses have gained in popularity as the baby boomer generation looks to retire and relocate to places without stairs. But Yang says she’s seen more interest in ranch-style homes from buyers of all ages.

People are attracted by the informal ease of living there, as well as the integrated indoor-outdoor experience. Others are drawn to the deceptively simple architecture. “They’re just brilliant little designs, and people are appreciating them,” Hess says.

NEW LISTING – 1716 Jose Gaspar Drive

NEW LISTING – 1716 Jose Gaspar Drive

Listing Agents: Donna Moore / Jeff Moore

Exceptional location. This spacious floor plan with over 4,000 square feet of living space offers the perfect back drop to entertaining both inside and out. Enter thru the double doors to a 2-story foyer and be welcomed by natural light, wood floors and remarkable water views of Charlotte Harbor. This wonderfully appointed home boasts three bedrooms, four and one-half baths, and is accentuated by two fireplaces. The main level features a spacious living/dining area, crown molding, plantation shutters, elevator, and a large screened terrace and an open deck leading to the pool area. The well equipped kitchen opens to the welcoming family room with built-in cabinetry, volume ceiling and overlooks the vast expanse of the harbor. Also included is the master suite with fireplace, two walk-in closets, and French doors accessing the screened terrace. Upper level offers an open area used as an office, guest bathroom and open deck. Multiple renovations, recent ones include: impact windows/doors, hurricane rated 3 garage doors, new pool lining, updated master bathroom, and new hot water heaters and air-conditioners.

$3,465,000

New Listing – 10000 Gasparilla Pass Blvd., Boca Grande, FL 33921

10000 Gasparilla Pass Blvd., Boca Grande, FL 33921

Whether you’re entertaining in style or lounging poolside with loved ones, you will find every luxurious element you need for a life well lived. Nestled on the exclusive North Shore of Boca Grande, where the most stunning and secluded beaches are found, the custom-designed property is at once breathtaking and welcoming. Rich textures and hand-crafted finishes, from wood and marble to custom cabinetry and window treatments, fuse beautifully throughout the over 8,000 square feet of space. Many exquisite vantage points sweep over Lake Gasparilla and the private pool area. Featured are 5 bedrooms, 5 full baths, a powder room, gourmet kitchen with butler’s pantry, elevator, exercise area, custom bar with wine room and a generous 4-car garage. The owner’s retreat is a place you will long to relax in, and includes a sitting area, custom closets, and lavish bath. Outdoor areas incorporate incredible balconies, lush landscaping, a heated pool and spa, custom shower and kitchen surrounded by fabulous alfresco entertaining areas. Deeded access to the exceptional North Shore beach provides the opportunity for kayaking, sunset walks, shelling and all the area has to offer.

$4,450,000

New Listing – 350 Tarpon Ave.

350 Tarpon Avenue, Boca Grande, FL 33921

Listed by Donna Moore / Jeff Moore

LISTING INFORMATION

Built in 1935 and completely rebuilt and renovated in 2010 is a three bedroom, three and one-half bath charming cottage located in a historic neighborhood. Outdoor decorative handmade tile water fountain welcomes you with a limestone patio while the interior has been exquisitely renovated and meticulously maintained. The open layout flows beautifully and no detail has been overlooked. High ship lap ceilings and natural light compliment the neutral dcor in an open floor plan with Brazilian Koa hardwood flooring, board and batten walls, impact windows, and plantation shutters. The kitchen with custom cabinetry, bead board back splash, Carrara marble counter tops, and a stainless-steel garden sink opens to the living/dining area and an adjoining family room. The near by bar offers a 2-drawer fridge and ice maker. The spacious master suite features a walk-in closet, dual sinks, Crema Marfil counter tops/tile and French doors accessing an outdoor deck to the backyard patio. Two guest bedrooms have plantation shutters and ship lap ceilings with the guest bathrooms offering Carrara marble flooring. Other features include a new metal roof, and a one-car carport. The outdoors has been thoughtfully enhanced with a walkway, outdoor shower, limestone courtyard and tropical lush landscaping for added privacy. Only minutes to the village.

SOLD – Boca Grande Beach Club Unit 2E

320 GULF BLVD, #2E, BOCA GRANDE, FL 33921

Sold 1/24/2019 for $800,000     Property Website Link

Jamie Curry, Listing Agent

This second floor, 3 bedroom, 2 bathroom, condominium is located in the historic Gulf front community of the Boca Grande Beach Club. Developed by Hugo Lingren in 1968, this community has a certain “lost-in-the-60’s” look which has become all the rage in the current cycle of architectural fashion. Located close to town, this condo is a golf cart ride away from the restaurants and shops in the Village of Boca Grande. This home was recently renovated to include all new impact glass windows, custom designed plantation shutters, a full kitchen renovation, recessed lighting, baseboard and trim, bathroom vanities and mirrors, a modified floor plan to include a 3rd bunk bedroom, and has been freshly painted throughout. With a solid rental history (pre-renovation) and reservations in place for 2019, this is the perfect property for a family who desires to enjoy their new home with the possibility of renting. Renovated property in this price point close to town in Boca Grande is a rare find on the Island. Start living your Boca Grande dream today!