With the significant increases in both inflation and mortgage rates, it’s clear that the recent real estate boom has come to an end. While this is an unfortunate truth for many, the new year still looks promising for affluent consumers looking to invest in luxury real estate, indicating that premium and luxury appliance sales are likely to remain steady.
Coldwell Banker Real Estate LLC recently released The Trend Report 2022, which offers valuable insight into what 2023 has in store for the luxury real estate market and affluent buyers. Below are some of the more notable findings that premium and luxury appliance dealers should keep in mind as we head into a new year.
Affluent Consumers See Now as a Good Time to Buy
As home prices drop due to increased mortgage rates, the affluent audience is taking the opportunity to purchase new homes and diversify their portfolio with real estate. The report from Coldwell Banker indicates that many affluent consumers are looking at real estate as a long-term investment opportunity.
Coldwell Banker notes that “consumers are over three times more likely to think that 2023 will be a better time to invest in real estate compared to 2022.” The findings in The Trend Report support this, noting that “80% of U.S.-based high-net-worth consumers agree that real estate is a safe investment.”
The report also suggests that the market environment is not a major factor in the affluent audience’s interest in investing. This interest in real estate is positive news for high-end appliance dealers, who the affluent audience will look to for new appliances for their properties.
Secondary Home Ownership is Not Slowing Down
The Trend Report includes findings from a survey conducted by Censuswide that was distributed to “over 2,000 U.S.-based high-net-worth consumers.” One of the key findings is the importance luxury buyers are placing on secondary homes versus primary residences.
According to the report, 72% of respondents who plan to purchase a home “stated that their new home would either be a second residence, rental property or vacation home.” RealTrends also predicts that second home purchases will increase, noting that an increase in remote work over the past few years has given luxury homeowners more flexibility to work from new locations. This indicates that premium and luxury appliance dealers should prepare for an increased interest in products, features, and designs that are ideal for secondary living spaces such as wine coolers for vacation refreshments, pro grills for outdoor cooking, and 30-inch ranges for compact kitchens.
Cash Buyers Aren’t Impacted by Rising Interest Rates
Nick Warren, Founder and CEO of Berkshire Hathaway HomeServices Warren Residential, predicts markets with “many wealthy buyers with cash, or the ability to get lower rates based from private banking relationships, are likely to remain reasonably stable.” While first-time home buyers will likely be more affected by interest rates, The Trends Report suggests affluent buyers will “get creative with financing.”
According to the report, 51% of affluent consumers plan to finance homes with cash, and 48.1% plan to do so with “a private wealth mortgage.” Having access to these alternative financing methods allows affluent consumers to continue purchasing homes at a steady rate, which means there will likely not be a shortage of high-end appliance sales opportunities for dealers in the new year.
While the real estate market is undergoing yet another dramatic shift, The Trends Report suggests that the affluent audience will continue to purchase homes at a steady rate in 2023. As affluent homeowners continue to buy homes, both new and replacement appliance sales are sure to remain steady. As this unique audience continues to invest in real estate and purchase secondary and/or new primary homes, now is the time to adapt and perfect your marketing strategies. If you could use the insight of a dedicated team experienced in marketing premium and luxury appliances to the affluent audience, we would love to hear from you.