Luxury Portfolio International’s recent white paper, “The Affluent Homebuyer: a quest for meaning,” breaks down the new mindset of today’s luxury buyer. The report’s authors assert that traditional trappings of luxury are quickly becoming old and outdated, and today’s luxury buyer is searching for something deeper and more meaningful.
This report identifies three types of luxury homebuyers, based on what that “meaningful” means to buyers in different price ranges. They are defined as “practical explorers,” “meaning seekers” and “power players.” These profiles shed light on the differences revealed when comparing the different price ranges that luxury buyers fall into, and can be useful when prospecting for new luxury clients or tailoring marketing messages.
1. Practical Explorers (the $1-to-2-million range)
Practical explorers want to feel like they are making a smart buying decision. On average, they:
- Have a primary home valued at $1.1 million. 35 percent of practical explorers own a second home valued at $724,000 on average.
- Have an income of $331,600, with $4.2 million in assets.
- Are 52 years old. Eighty-eight percent are married, and 77 percent have children.
- Are passionate about volunteering, recreational sports, sporting events, arts and crafts and the environment.
At 97 percent, the overwhelming majority of practical explorers are loyal to certain brands because they know what they are getting – they do not stray far from what they know. Buyers who fit this profile will rely more on a real estate agent to guide them through the purchase process.
2. Meaning Seekers (the $2-to-5-million range)
Unlike the the practical explorers, meaning seekers have developed their sense of luxury as key to their lifestyle. They see themselves as committed luxury consumers, and on average, they:
- Have a primary home valued at $2.2 million. Fifty-five percent of meaning seekers own a second home valued at $1.6 million on average.
- Have an income of $492,000, with $6.6 million in assets.
- Are 50 years old. Eighty-eight percent are married and have children.
- Are passionate about museums and art exhibitions, finance, investing, outdoor activities and fine dining.
Seeking emotional connections, 89 percent of buyers in this price range say that they appreciate artistically beautiful products and 79 percent said they love to express who they are through their style. A trusted real estate professional should base their meaning seeker clients’ homebuying experience on who they are and how they want others to see them.
3. Power Players ($5 million and up)
The very affluent power player’s M.O. is pretty simple – if nobody else can get it, then they want it. On average, they:
- Have a primary home valued at $9.5 million. Fifty-four percent have a second home valued at $6 million on average.
- Have an income of $811,900, with $42 million in assets
- Are 48 years old. Eighty-five percent are married, and seventy-six percent have children.
- Are passionate about fashion and style, cars, shopping and their personal appearance.
Power players’ purchasing decisions are reinforced when they understand that what they are buying is not available to everyone. They would rather pay a premium to feel confident that their purchase is worth more. According to the report, they have a “somewhat competitive relationship with luxury and their social circle.” A smart real estate professional will make power player clients feel central to the purchase and focus on top-tier properties with room for customization.