The average homebuyer earns more than most renters and is far less likely to move. They’re 47, though a third of them are first time buyers – this group skews younger. Roughly sixty percent of them are married couples, while another ten percent are unmarried couples. But what is the profile of the typical luxury homebuyer?
The average home costs around a quarter million dollars, and building a home costs $100 to $200 dollars per square foot. Custom and luxury homes start at $200 dollars per square foot and can reach upwards of $500 on the high-end side. Homes in the luxury market also tend to be larger. For example, few mid-market homes surpass three thousand square feet, whereas mansions of four to ten thousand feet are somewhat common. However, surveys show that most luxury homebuyers want a home to be a little over three thousand square feet. This is a definite trend away from the mega-mansions.
This is separate from the price of the land the property is built on. This means that most luxury homes start at around a million dollars. In the Dallas luxury real estate market, upscale properties may start at three quarters of a million dollars. But in every case, it also translates to a higher average income for luxury homebuyers than the median income simply to afford the property.
Surveys show that the majority of luxury homebuyers have a median income of half a million to a million dollars. This group includes business owners and upper management.
The luxury real estate market is no longer dominated by Baby Boomers. The average luxury homebuyer is in their late forties, putting them squarely in Generation X. Baby Boomers still account for a third of the luxury home market and millennials account for roughly fifteen percent of luxury home purchases, though that market share will grow as they increase their incomes over time.
Roughly half of luxury homebuyers state that they want to live in the suburbs. Only fifteen percent say they want to live in an urban area, though this group tends to be downsizing couples or younger individuals tied to high-tech who want to live in the city. More than a fifth of luxury home shoppers say they want to live on scenic waterfront property. This group almost has to choose suburban or rural properties. Only five percent of luxury homebuyers specifically state they want to live on a rural property.
In general, luxury homebuyers like to be close to restaurants and fine dining. They appreciate having outdoor space, both in the form of a yard and nearby parks and walking trails. Homebuyers may value a property for its unique qualities or the area’s reputation. However, a ten to hundred-acre estate is no longer something most luxury homebuyers will even consider.
Relatively few luxury homebuyers today want to manage staff—they actually prefer smart homes that require little upkeep. They prioritize security and privacy. For example, when asked what smart home features they wanted in a luxury home, half or more said a security system. In-ground pools are also popular. Being close to a country club matters less for Millennials than Baby Boomers. On the other hand, Millennials are more likely to buy in an “agri-hood”, a community that offers gardens or fruit trees along walking trails.