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Steve Murray is one of the most respected real estate consultants in the business. Many of the largest companies in the industry are on his client list and he has brokered several large mergers and acquistions in recent years.
Some exerpts from todays Real Trends Email Update #849:
===Luxury Homeowners looking to purchase additional residences in the next two years===
In its latest consumer-trend study, Architectural Digest has united with Sotheby’s International Realty Affiliates, Inc. to find that affluent homeowners are planning to acquire additional residences in the near future. The study, “Seeking a Luxury Lifestyle,” discovers that one in three Architectural Digest subscribers (36%) intend to acquire a secondary/additional home in the next two years. The study further reveals:
* Of those Architectural Digest subscribers who already own three or more homes, 49 percent plan to acquire an additional home within two years;
* Of those who already own a second home, 35 percent plan to acquire a third home within two years; and
* In an indication that young affluent consumers are in the market for second homes, 44 percent of those under age 45 stated that they may acquire a second home in the near future.
Although geography is the primary driver when it comes to searching for a secondary residence, lifestyle amenities are becoming increasingly critical. Approximately one in three (32%) of the Architectural Digest subscribers measured know the characteristics and amenities they desire and would search in a number of geographic locations to find the home that matches what they want, rather than looking purely by location. Subscribers with household incomes under $400,000 (38%) are more likely than their wealthier counterparts to indicate they would search in a number of locations to find the house that meets their amenity checklist.
The study finds that waterfront property (75%) is the most sought-after amenity when buying a secondary residence. Surprisingly, gourmet kitchens (10%) and swimming pools (5%) were among the least significant amenities.
===New-home buyers want high-tech options===
Home builders could be missing the boat if they donâ€™t offer high-tech options.
A recent survey by the Consumer Electronics Association found 38 percent of recent home buyers and 61 percent of those planning to buy indicated that they were in the market for monitored security, but only 29 percent of the builders surveyed were offering that option.
The study also found:
* 86 percent of builders said technology is a significant factor in marketing new homes, compared with 66 percent two years ago.
* 33 percent of builders said revenue from home-technology products had increased, up from 24 percent in 2004.
* 32 percent of new home buyers said they did not buy structured wiring because the builder did not offer it.
* 36 percent of all households had home theaters, up from 28 percent in 2003.
===Places where Americans would love to live===
North Carolina and Virginia top the charts as places where American most want to live, while California and Florida received the top votes of foreign respondents in a recent study, the Anholt State Brands Index. The Index analyzes the brand strengths and weaknesses of all U.S. states.
The survey polled more than 9,000 U.S. citizens and 12,000 people in 15 other countries on their attitudes and perceptions of all 50 states. Questions regarding physical aspects of each state, economic and educational opportunities, lifestyle appeal, people and basic qualities and infrastructure were designed to give state administrators and economic development offices insights into how their state is perceived within and outside of the United States.
The top five most desirable states to make a home, according to U.S. citizens are: North Carolina; Virginia; Florida; Colorado; and Oregon. North Carolina and Virginia also ranked highly as lifestyle destinations, and they consistently placed in the top 10 for climate, physical attractiveness, amenities, ease of finding employment, commercial opportunity and education.
Foreign rankings were based on parameters similar to those used for the domestic audience. For international respondents, the top five states are: California; Florida; Hawaii; New York; and Washington state.
===Second home ownership in Baby Boomers===
In 2004, 43 million American households aged 50 or older owned their main residence. Fifteen percent of this group, or 6.6 million households, also owned a second home. The second home market is relatively small, but there will be sustained future growth in second-home mortgage activity due to the sheer size of the Baby Boom cohort, not because baby boomers own these properties at a higher rate than older generations.
“Housing Trends Among Baby Boomers,” a study conducted by Gary V. Engelhardt and jointly sponsored by Radian and the Research Institute for Housing America (RIHA), analyzes two trends. The first part of the report profiles second-home ownership and mortgage activity associated for homeowners aged 50 or older. The second portion of the study focuses on the mobility of older households, with a particular interest in quantifying suburban-urban migration. For older households, mobility is not determined by changes in employment, income, or broader labor-market conditions, but instead by changes in marital status, primarily widowhood, and health and functional status.
On second home ownership (based upon analysis from the Health and Retirement Study (HRS) data, they found that 6.6 million homeowners aged 50 and older own second homes. Second home purchases are geographically concentrated in well known vacation areas. As a result, local and regional economic conditions related to employment growth and migration will have important influences on the collateral value and credit risk of these properties.
Mortgage debt outstanding on second homes is estimated to total $126 billion. Only a small percentage of second homes owned by those 50 and over have outstanding mortgages. Second-home mortgage originations comprised only about four percent of overall mortgage market originations.
On mobility and suburban-urban migration (based upon analysis of Current Population Survey (CPS) data), it was found that at the national level, empty-nest retirement-age suburban homeowners are not flocking to urban areas in great numbers. In particular, based on the last decade’s experience, in a given five-year period, only two percent of all empty-nest retirement-age suburban homeowners can be expected to move to an urban area. Suburban empty-nesters are just as likely to move to a non-metropolitan area as they are to an urban area.