A study of homeowners whose homes are valued at $1 million or more found that 35 percent plan to remodel or add on to their property, and 8 percent are planning to move to another luxury home. This study, the Coldwell Banker Luxury Index, is based on an August 2004 survey of 300 homeowners.
About 85 percent of the index respondents reported an annual household income of $150,000 or more, and half 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), 35-44 (43 percent), 45-54 (26 percent), and 55 and over (18 percent).
Of the 8 percent who said they are planning to move, 21 percent said they are relocating to another city, 21 said they are upwardly mobile/enjoying greater success, 17 percent said they desire a bigger home, and 13 percent said they are retiring. About 31 percent of respondents said they already own a second property, while 15 percent said they plan to buy a second home within the next year or so.
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).
About 85 percent of the homeowners who participated in the survey said they already have a security system while 4 percent said they planned to purchase a security system, 77 percent said they have gourmet/designer kitchens while 10 percent were planning to buy, 64 percent said they have topiary/landscaping while 13 percent were planning to buy, 46 percent have home theaters while 39 percent were planning to buy, and 41 percent have hot tubs while 10 percent were planning to buy.
“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 Jim Gillespie, president and CEO of Coldwell Banker Real Estate Corp.
Most respondents said they don’t expect rising interest rates to put a damper on their spending: 61 percent said recent federal interest rate hikes have little affect on their luxury spending, while 35 percent said rising rates would cause them to “scale back” on their luxury purchases. About 4 percent of luxury homeowners said that they “will put all luxury purchases on hold” because of increasing rates.
About 17 percent of respondents said houses are the luxury item that is most fun to shop for, 15 percent said cars, and 11 percent said jewelry. About 26 percent of respondents said they were “most satisfied” with their home purchase, 26 percent said they were most satisfied with their car purchase, and 7 percent said they were most satisfied with their furniture purchase.
About 31 percent of respondents said they belong to country clubs, 21 percent said they belong to golf clubs, 19 percent belong to tennis clubs, and 11 percent belong to wine clubs. Also, 76 percent own luxury decorations, 72 percent own luxury cars, 65 percent own expensive jewelry, 43 percent own high-end fragrances, 31 percent own exclusive country club memberships, 18 percent own boats, and 5 percent own thoroughbred horses.
The survey also covered technology purchases: 72 percent said they own digital cameras, 46 percent said they bought plasma televisions, 39 percent own MP3 players, 37 percent own wireless-capable laptop computers, 34 percent own camera cell phones, and 33 percent own Blackberry devices.
About 64 percent of the surveyed homeowners have traveled to an international destination for pleasure over the last two years, and 65 percent have flown first-class over that time period, 30 percent have taken a cruise, and another 18 percent have flown on a private jet. About 76 percent of respondents have visited a spa over the past couple of years, while 9 percent have had elective cosmetic surgery. Only 11 percent of the homeowners defined their lifestyle as “modest and thrifty.”
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