They may flaunt their personal lives on social media, but when it comes to buying a home, high net-worth millennials and young Gen Xers — dubbed the “New Aristocracy” — are sending a different message.
They crave privacy.
“The New Aristocracy has a need for security and privacy that may seem surprising considering this is the generation known for sharing their personal life online,” says a report by Luxury Portfolio International, a global network of high-end real estate brokerages.
The organization combined forces with YouGov, a market research and data analytics firm, to conduct a survey of more than 500 U.S. consumers with $1 million or more to invest in real estate in the next three years.
The majority of buyers in the survey seeking luxe homes are 25- to 49-year-olds who have inherited or will be inheriting significant wealth, YouGov says.
“This group is unlike any American generation before it,” the report says. “They will ultimately be larger in number and greater in economic power than the wealthy in the gilded age of the Rockefellers.”
The conclusion: “We are witnessing the rise of the New Aristocracy.”
Who are they?
These aren’t your everyday 30-somethings.
“They look and behave quite differently from the stereotypical millennial. They are, on average, 37 years old, married and have young families. Their careers are solid and their future prospects are high,” the researchers say.
These buyers likely have grown up in wealthy families and stand to inherit nearly $4 million on average, with 58 percent likely to inherit more than $1 million.
Their current investable assets average $4.7 million, according to the report, and 19 percent of respondents have upward of $10 million.
Growing up in luxury, the report notes, creates “savvy consumers with many demands.”
A New Aristocrat making real estate headlines in Southern California recently was billionaire In-N-Out heiress Lynsi Snyder, who’s put her 18,687-square-foot home on more than four acres in the San Gabriel Valley on the market.
Snyder is asking $19.799 million for a spread that includes 10 bedrooms, 18 bathrooms, a dance studio, tennis court, full basketball court, an indoor batting cage and maid’s quarters.
What do they want?
The typical New Aristocrat intends to spend at least $1 million on a home in the next one to three years, with 54 percent preferring an urban setting, though 38 percent want to buy in the suburbs and 9 percent will seek shelter in a rural area.
(Not to quibble over money, but it’s worth noting that in affluent parts of the Bay Area, $1 million isn’t enough to be considered a luxury property.)
More than half of the survey’s respondents — 53 percent — are looking for a place over 7,500 square feet. But nearly a quarter — 23 percent — really want to spread out, in a manse that’s 20,000 square feet or more.
Bells and whistles
Home features such as surveillance cameras and monitored security systems were among the aristocrat’s most essential amenities.
“While these features have always been important for the wealthy, the reality of the world today makes them absolute necessities for this younger generation,” the report said.
When a reporter asked why, YouGov researcher Chandler Mount ticked off concerns about personal safety, identity theft and losing assets.
“What’s different about these risks today is the number of people they affect,” Mount said.
Also considered most essential are being near restaurants and dining options, having outdoor spaces like patios and terraces, and commercial grade kitchen appliances.
Fitness features including steam showers, spas and gyms are in demand, as are formal living rooms, home offices and whole house control systems. Proximity to golf is a plus.
The report contrasts the younger buyers with a group age 50 and up. They’ve been given a moniker, too. The older folks are called Luxury Loyalists.
The younger set is twice as likely to consider swimming pools, massage rooms and meditation rooms essential. They also place a higher priority on such features as dual dishwashers, catering kitchens, separate outdoor kitchens, wet bar areas and music and entertainment smart home systems.
For the younger buyers, the report says, a home is meant to connote a degree of sophistication and excitement, and “a reflection of who they are as people as much as it is a place to live.”
Most of the amenities mentioned in the millennials’ wish list can be found in luxury homes throughout the Bay Area.
In fact, fancy homes are easier to find these days than affordable ones.
So, want a wet bar? No worries.
A Bay Area house with 20,000 square feet?
Good luck finding that.
By the numbers
Young Aristocrats
Average age: 37
Average household ncome: $427,000
Average assets to invest: $4.7 million
Grew up rich as a teen: 41%
Inheriting $1 million or more: 58%
Luxury Loyalists:
Average age: 57 years old
Average household income: $443,000
Average assets to invest: $5.7 million
Grew up rich as a teen: 30%
Inheritance of $1 million or more: 47%
Combined:
Average age: 41
Average household income: $431,000
Average assets to invest: $5 million
Grew up rich as a teen: 38%
Inheritance of $1 million or more: 56%
The survey was conducted Dec. 9-18 2017 with varying margins of error.
Source: Luxury Portfolio International
