Luxury Consumers Continue to
Invest In their Homes, Reports Unity Marketing
RISMEDIA, Sept. 8, 2005 — Over
the past 12 months, approximately 6 million luxury consumer households,
or nearly 20% of the total affluent market (households with income among
top 25% of households or $75,000 and above), either bought a new or
existing home or purchased a second/vacation home. By comparison, the
National Association of Realtors reports that just over 10% of existing
homes across the country were sold in 2004.
The signs of a luxury housing boom are everywhere:
• Toll Brothers, leading builder of luxury homes (average price
$665,000) just reported nine month revenue reached $3.81 billion, up 57%
over same period previous year. That comes on top of a reported 40%
increase in fiscal 2004 to $3.89 billion.
• Leading Real Estate Companies of the World (formerly RELO), the
largest network of independent residential real estate firms in the
U.S., says their member firms' sales of luxury homes ($1 million and
above) rose 31% in 2004 to reach $42 billion in sales.
• And the Census Bureau reports that the number of million dollar
homes in the nation's housing stock has doubled in the past three years,
while homes valued just below the million-dollar mark ($500,000 to
$999,999) have increased even more (120%) during the same period.
Unity Marketing's latest survey among luxury consumers (1,153 luxury
consumers with average income $141.9k and age 42.6 years) found that
two-thirds were active in the home market in the past year, either
buying a new, existing or vacation home or expanding, remodeling or
redecorating their existing home. And even more luxury consumers (69%)
have major home plans in the coming year, including about 17% who plan
on buying a new, existing or vacation home.
"Despite rising gas prices and the threat of a housing market slow
down, the luxury consumers feel well cushioned," said Pam Danziger,
president of Unity Marketing and author of Let Them Eat Cake: Marketing
Luxury to the Masses— as well as the Classes.
"The luxury consumers' confidence is on the upswing and fully 63%
expect their personal financial situation to improve over the next
twelve months. Given the strong activity in home buying and major
home-related improvements, Unity Marketing predicts a strong and growing
demand for all-things luxury for the home."
Typical Luxury Consumers' Homes Not All That Luxurious
While the typical luxury consumer lives in a home nearly two times
larger than the national average (3,153 sq. ft. vs. 1,708 overall) and
has a lot nearly three times larger (1.2 acres vs. .35 overall), a
surprisingly small share of luxury consumer homes are equipped with the
features typically associated with a luxury home.
For example, while the majority of luxury consumers' homes have
fireplaces (65%) and home offices (64%), only 34% have a whirlpool, spa
or Jacuzzi, while 27% have a luxury bathroom with top line features and
only 26% have a gourmet kitchen with top line appliances. The story is
the same outdoors, with only 38% having luxury patio furniture; 28%
having outdoor shelters, like gazebos, tens, awnings, and 22% owning
outdoor garden or landscape water features.
"That presents a significant opportunity for home improvement
spending," explained Danziger. "If they don't move up, we
expect many of the luxury consumers who stay put to invest in major home
improvements that will bring their already large and high-priced homes
up to true 'luxury' levels. That will mean lots of homeowners redoing
bathrooms and kitchens and enhancing the outdoor garden and patio living
areas."
2Q 2005 Luxury Consumer Tracking Study Focuses on Luxury Home
Unity Marketing's Luxury Consumer Tracking Study for the second quarter
2005 focused on the luxury consumers' home. Data about their major home
purchases and home improvement plans are included, along with data about
the indoor and outdoor features of their luxury homes. Also investigated
in the latest tracking survey was ownership of various status luxuries
like sports cars, art and antiques, jewelry and watch collections, furs,
fine musical instruments and others.