Interest Rate Hikes Have Little Impact on Luxury Purchases
Coldwell Banker Reports Strong Luxury Home Sales in 2004
PARSIPPANY, N.J., Nov. 16 /PRNewswire/ -- The inaugural Coldwell Banker(R)
Luxury Index has found that luxury spending is resistant to interest rate
hikes. Sixty-one percent of U.S. luxury homeowners surveyed stated recent
increases in interest rates would have no impact on their luxury item
purchases. In fact, more than one third said that they are buying more luxury
goods and services than ever before, with many of these purchases going toward
making their homes more luxurious and valuable.
This is a major finding of the Coldwell Banker Luxury Index, a study
conducted in August 2004 of U.S. luxury homeowners -- those owning homes
valued at $1 million or more -- concerning their attitudes, preferences and
purchasing behavior related to luxury goods and services. The national survey
of 300 respondents was conducted by telephone by International Communications
Research (ICR) of Philadelphia and commissioned by Coldwell Banker Real Estate
Corporation, a leader in luxury real estate sales.
"The luxury market is booming," said Jim Gillespie, president and chief
executive officer of Coldwell Banker Real Estate Corporation. "Sales this year
through our luxury marketing program, Coldwell Banker Previews
International(R), are up 52 percent year-to-date. This is particularly
significant considering that in 2003 certified Coldwell Banker Previews
International sales associates were involved in more luxury homes sales than
during any other year in company history. The index also indicates that
luxury homeowners are investing in their homes by remodeling and adding
fantastic amenities."
Most Popular Amenities for the Home
Million dollar homeowners are spending to improve their homes. While 85
percent already have security systems in their homes and 77 percent have
gourmet/designer kitchens, home theaters will soon become even more prevalent
in luxury homes. When asked what luxury amenities they plan to buy, the top
responses were home theaters (39 percent), boat docks (15 percent) and
topiary/landscaping (13 percent).
Already Have Plan to Buy
Security System 85% 4%
Gourmet/Designer Kitchen 77% 10%
Topiary/landscaping 64% 13%
Home Theater 46% 39%
Hot Tub 41% 10%
In-ground Pool 31% 11%
Wine Cellar 26% 10%
Heated Floors 17% 2%
Boat Dock 13% 15%
Resistance Pool 5% 2%
Pizza Oven 6% 1%
Tennis Court 4% 2%
"Luxury homeowners are enjoying a lifestyle of leisure. The high-end
features that are being added are some of the reasons we are seeing increased
property values in certain high-end markets," said Gillespie.
Luxury Homes: Add on or Move?
Luxury homeowners are investing in more than just amenities. Over the
next two to three years, more than one-third (35 percent) of luxury homeowners
plan on adding on to or remodeling their property. Eight percent are planning
to move to another luxury home, citing several reasons: relocating to another
city (21 percent), upwardly mobile/enjoying greater success (21 percent),
desire for a bigger home (17 percent) or retiring (13 percent).
Second home and vacation home purchases are also high on the luxury
homeowner's priority list. While 31 percent indicated that they already own a
second property, an additional 15 percent plan to buy a second home in the
next year or so.
Top Luxury Purchases
Luxury homeowners already own many lavish items, with luxury home
decorations (76 percent) and luxury cars (72 percent) topping the list. Other
popular possessions among luxury homeowners include: expensive jewelry (65
percent), high-end fragrances (43 percent), exclusive country club memberships
(31 percent), boats (18 percent) and thoroughbred horses (five percent).
Shopping for the Luxury Homeowner that has Everything
When asked which luxury item was the most fun to shop for, the top three
responses were a house (17 percent), a car (15 percent) and jewelry (11
percent). Respondents also said that they were "most satisfied" with their
purchases of houses (26 percent), cars (26 percent) and furniture (7 percent).
Regarding technology purchases, digital cameras were the most frequently
purchased (72 percent), followed by plasma TV screens (46 percent), MP3
players (39 percent), WiFi laptops (37 percent), camera cell phones (34
percent) and Blackberry devices (33 percent).
The survey also included the types of private clubs luxury homeowners
belong to. Country clubs were the most popular (31 percent), followed by golf
clubs (21 percent), tennis clubs (19 percent) and wine clubs (11 percent).
Interest Rate Resistant
America's luxury homeowners reported overwhelmingly (61 percent) that
recent federal interest rate hikes have little affect on their luxury
spending, while 35 percent indicated that rising rates would cause a "scale
back" of luxury purchases. Only four percent of luxury homeowners said that
they "will put all luxury purchases on hold" because of increasing rates.
Luxury Homeowners: Creatures of Comfort
Personal attention and recreation seem to be priorities with luxury
homeowners. The Coldwell Banker(R) Luxury Index revealed that 64 percent of
the million dollar homeowners who were surveyed have traveled to an
international destination for pleasure over the last two years. How they
travel is also noteworthy: Sixty-five percent have flown first class over that
time period, while 30 percent have taken a cruise and another 18 percent have
flown on a private jet.
To take care of themselves, 76 percent of million dollar homeowners have
visited a spa over the past couple of years, while nine percent have had
elective cosmetic surgery.
Are these million dollar homeowners living the good life? Yes. Only 11
percent of luxury homeowners defined their lifestyle as "modest and thrifty."
Demographics of Study Respondents
The majority (85 percent) of the Coldwell Banker(R) Luxury Index
respondents reported an annual household income of $150,000 or more, and 50
percent of these respondents said their annual household income was $300,000
or more. The average size of households was four, and several age groups were
represented: under 35 (13 percent), 35 to 44 (43 percent), 45 to 54 (26
percent), and 55 and over (18 percent).
About Coldwell Banker(R)
Since 1906, the Coldwell Banker(R) organization has been a premier
provider of full-service real estate. In 2005, Franchise Times magazine's
prestigious Top 200 issue ranked Coldwell Banker number one in real estate and
number eight among all franchisors. Additionally, the Coldwell Banker
organization received the "Highest Overall Satisfaction For First Time Home
Buyers and Sellers Among National Full Service Real Estate Firms" from the
J.D. Power and Associates 2003 Home Buyer/Seller Satisfaction Study(SM). The
study was based on responses from 2,924 home buyers and sellers. The study was
conducted for Cendant Corporation by J.D. Power and Associates. The Coldwell
Banker system has more than 3,600 residential and commercial real estate
offices and 117,000 Sales Associates in 28 countries and territories. Each
office is independently owned and operated except for offices owned and
operated by NRT Incorporated. The Coldwell Banker system is a leader in the
industry in residential real estate, and in niche markets such as resort, new
homes and luxury properties through its Coldwell Banker Previews
International(R) division. It is a pioneer in consumer services with its
Coldwell Banker Concierge(R) program and award-winning Web site,
http://www.coldwellbanker.com. Coldwell Banker Mortgage is one of the largest
telephone/web based lenders in the country and the Coldwell Banker
Commercial(R) system is one of the largest commercial franchise operations
with over 400 affiliates offering clients comprehensive buying, selling,
leasing, acquisition, disposition and management services. Coldwell Banker
Real Estate Corporation is a subsidiary of Cendant Corporation (NYSE: CD).
SOURCE Coldwell Banker
 back to top
Related links:
http://www.coldwellbanker.com
CONTACT:
David Siroty of Coldwell Banker Real Estate
Corporation, +1-973-496-7199, David.Siroty@cendant.com; or Julie
Kronish of Publicis Dialog, +1-212-279-6932,
Julie.Kronish@publicis-usa.com, for Coldwell Banker
|
