Health, Convenience and Social Causes Top Luxury Consumers’ Priority Lists
With each passing year, millennials increase their force in the market, and in many ways, the pandemic has only accelerated existing trends, said expert panelists on day three of Mansion Global’s Luxury Real Estate Conference on Thursday. Among those trends: an increased focus on health, sustainability, and political and social awareness, as well as an aggressively digital-first approach.
“These younger collectors spend their money with a purpose,” said Dustyn Kim, chief revenue officer of Artsy. “They have a strong inclination to support groups that have been historically marginalized in the art world and beyond. [These buyers] want to support artists, people and causes they care about.”
The same phenomenon can be seen in younger buyers’ approach to the housing market. “This generation, more so than previous generations, pays attention to what’s going on in the world globally, environmentally,” said Kofi Nartey, founder and CEO of GLOBL RED. “And that’s all the way down to the agents and brokers they engage with. Eighty-four percent of millennials want to engage with companies that are socially conscious.”
And while high-earning-millennial buyers are making their spending power known in the housing market, for such a wide-ranging demographic bracket, it’s important not to treat them as a monolith.
“[Home] prices have risen 20% from last year,” said Lawrence Yun, chief economist for the National Association of Realtors. “For some millennials it’s difficult to buy, and at the same time, some have a very high income and are looking at luxury properties. It’s a mixed picture for millennial home-buying potential.
Below, more insights on the digital future of the housing market, accelerating health and wellness trends, and more highlights from Thursday’s panel discussions:
The Next Generation of Smart Home Tech
With buyers suddenly stuck at home and hyper-focused on their domestic surroundings, smart home technology has, unsurprisingly, been a gangbusters business throughout the pandemic.
“‘Frenzy’ is an understatement,” said John Clancy, executive vice president, residential, at Crestron Electronics. “People are spending more time in and money on their homes than ever before. Demand has been the greatest at the very high end.”
Rather than an eye-catching perk, luxury buyers now view the presence of smart home technology as de rigueur.
“Nowadays, anyone buying a high-end home expects some level of technology to be incorporated,” Mr. Clancy said. “With today’s solutions you have the ability to add things a la carte, wirelessly, even in a building that’s 100 years old. You can do features like lighting control or motorized shades without having to run the infrastructure wiring.”
The tech sector has also rapidly evolved its at-home offerings to cater to the throngs of people now working from home, adapting conference room technology for at-home office and Zoom-room setups.
“A lot of products, we found a way early on [in the pandemic] to transform those for a residential space,” Mr. Clancy said. “Having a single button you can press when you join a video call, and it will set the lighting where it needs to be, lower the blinds, mute audio from the music system, set an indicator outside your door that you’re on a call.”
Moving forward, tech companies are keeping a close eye on how to incorporate electric vehicles into their offerings, including smart-home apps that will notify owners of things like battery status, tire pressure and fuel levels, all with a focus on user-friendly design.
“The goal is that you don’t need to have any technical expertise,” said JC Murphy, president of Savant. “The home should be responding to the user, and not the other way around.”
Embracing a Digital-First Economy
Another trend that only gained momentum after a year that saw buyers stuck at home: Younger consumers prefer to handle many of their most significant transactions online, and browse for everything from art to luxury properties using social media.
“Ninety-eight percent of home searches are starting online, and people are discovering agents, homes and doing research on social media,” Mr. Nartey said.
Kirsten Jordan, a real estate adviser and team leader at Douglas Elliman, added, “People want to get to know you before they work with you. And the best way for them to get to know you is to follow you on social media.”
The same phenomenon holds true in the art world, where younger buyers prefer to browse online for nonfungible tokens (NFTs) and physical art objects alike.
“We’re focused on beefing up digital inventory, virtual walkthroughs and online content, catering to this set that prefers to glean information online,” said Rebekah Bowling, senior specialist, 20th-century and contemporary art at Phillips. “There are certain collectors I deal with now that I can’t imagine having that old tome of an auction catalogue on their coffee table. It feels very retro.”
With the expectation of easy online access often comes an expectation of a high level of information and transparency, as well.
“‘Next-gen collectors are digital-first and grew up with the internet, and they expect total transparency and ease throughout the process of discovering and buying art,” Ms. Kim said. “They do their own research online, and increasingly want more access, more transparency.”
“One of the most interesting things is the level of transparency and interaction that’s happening with NFTs between collectors and artists directly,” Ms. Kim added. “With NFTs, they’re able to track ownership and ensure the artist herself gets paid out the royalties.”
Wellness and Sustainability Take Center Stage
With global concern simultaneously focused on climate change as well as individual health, wellness-forward design is becoming non-negotiable for many buyers and developers.
“The conversation about healthy buildings is more important than it’s ever been,” said Gregory Malin, CEO of Troon Pacific. “Home is the office, school, the gym. It’s the water we drink, the air we breathe, our mental health—it’s all important.”
With that in mind, architects and developers have turned their attention toward issues like how to bring more natural light and fresh, clean air into spaces, as well as an overall focus on seamless “indoor-outdoor” design.
“Our approach is driven by the idea that we prioritize landscape equally to indoor spaces,” said Duan Tran, a partner at KAA Design. “We think about how these indoor and outdoor spaces truly fit together, so it’s one overall floor plan, versus just an indoor plan.”
Even smart-home technology firms are getting in on the act, developing tools to balance lighting in a way that supports residents’ circadian rhythms and improves their sleep, as well as options for monitoring air quality, Mr. Murphy said.
“When everyone’s attention is drawn so strongly to well-being, it’s natural to start looking at our surroundings and demanding more of them,” said Leni Popovici, founding director and partner at KAP Studios. “Every single one of us became designers over the last 18 months because we had to rethink our homes.”