Affluent millennials and Gen Xers looking to buy second and third homes in distant markets are an opportunity for global luxury brokerages.
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Young affluent buyers looking to buy second and third homes in distant markets are an opportunity for luxury brokerages that help their agents network with other agents and facilitate referrals.
That’s one takeaway from a panel of executives at top international real estate brands who discussed challenges and opportunities luxury brokerages will face in the post-pandemic world.
While equipping agents with the tech tools they need to do their jobs is still a must, relationship building will be even more important, panelists agreed.
In the near future, 80 percent of luxury sellers will be millennials or Gen Xers, and 31 percent will be selling a home for the first time, said Anthony Hitt, CEO of Engel & Völkers Americas.
Hitt cited a recent analysis of consumer trends using Engel & Völkers’ proprietary data center, EVI, which found that the pandemic is helping drive a trend in which luxury sellers will increasingly own multiple homes.
According to the report, “The Next Luxury Home Seller,” affluent sellers are looking for life experiences, including global travel. While 81 percent live in an urban market, they’re not looking to flee to the suburbs — 67 percent are planning to purchase a home in a similar urban market. While 19 percent are interested in homes in rural areas, only 14 percent are interested in the suburbs.
“It’s an enormous opportunity coming up,” said Douglas Elliman CEO Scott Durkin, of the demand for luxury homes in cities. “Vacation homes are kind of taking a back seat — people are getting second and third homes, that are becoming ‘co-primary’ residences.”
“Look in your database,” to win business from younger, wealthier clients, advised Anne Miller, vice president, luxury for RE/MAX LLC. “One thing we hear from brokers is agents are forgetting about that family tree. There’s money there — they want to spend it.”
According to Engel & Völkers’ research, younger luxury buyers are looking for bigger homes, often because they’re starting families or are planning to have their parents move in with them.
“More than any other consumer segment, younger luxury homeowners are putting family first,” the report said. “They are making lifestyle changes to ensure they are never separated from their families again, and are planning for future family situations.”
Often, luxury homebuyers are looking for a home in another market, and that makes referral networks crucial.
Miller has seen recent deals where RE/MAX agents were able provide referrals to help a Californian buy property in Florence, Italy, and another case where a Texas homeowner was looking to buy in New Zealand.
“That’s the expectation of agents when you’re in a global referral network,” Miller said.
“It’s a huge opportunity to look in our own networks, and find someone who’s not just a name in a directory, but someone you feel comfortable referring a client to,” Hitt said.
“Our strongest suit is the relationship building that’s transpired during the pandemic and post pandemic,” Durkin said. “We were able to pivot and run our company differently — relationships are more important than the technology.”
To help agents built those connections, brokerages need to provide spaces “to get people under one roof to network,” said moderator Mickey Alam Khan, the CEO, publisher and editor in chief of Luxury Daily.
Panelists agreed that the pandemic will only accelerate the trend away from providing agents with cubicles or desks, in favor of shared spaces that are set up for groups. Events that bring agents from around the country, or even the world, are also proving to be popular with agents, they said.