Millennials, entering their peak years, and are slated to comprise 80% of North American luxury home purchasers in 2021 and 2022, says a new report from Engel & Völkers.
“The past year has seen a significant surge in housing demand, resulting in record-low inventory levels with rising prices to match and a red hot market across North American real estate,” Anthony Hitt, president and CEO of Engel & Völkers Americas, said. “However, in every market situation there are homeowners willing to sell. The key is to identify which consumer segments fall within this group, and that is what we have done in this new trend report. At a time when the market is moving very quickly, we’ve gathered the intelligence that will allow real estate professionals to stay ahead of consumer trends and provide their own clients with an edge when buying or selling a home right now.”
The report noted that 65% of millennials with household incomes of at least $250,000 are planning to sell their homes, adding significant inventory to markets that, in part because of the pandemic, have seen downward pressure on new listings, thereby driving up sale prices. Moreover, Engel & Völkers’ data suggests that 60% of these sellers don’t intend to move out of their current cities, with 83% already property owners in urban centres. Additionally, a whopping 96% reported either sharing their present households with parents or having them move into their new homes, signifying that multigenerational living, a relatively nascent trend, is not going anywhere.
Millennial-aged entrepreneurs comprised two-thirds of luxury home sellers in the process of getting businesses off the ground, and they’re abetted by remote work capabilities, with 29% opting to relocate. Although the overwhelming majority want to be in urban areas, 28% reported a preference for rural settings, which Engel & Völkers believes is indicative of family-oriented individuals—they’re more likely to either be married or living with a partner or have young children, and 20% are responsible for caring for at least one parent.
The report also identified what it calls COVID HENRYs—high earners, not rich yet—who are young professionals with household incomes of $150,000-250,000 and who belong to the millennial and zoomer generations. During the pandemic, this cohort ascended to the aforesaid level of remuneration but has not yet reached the same level of wealth as older generations who’ve spent significantly more time in the workforce. According to Engel & Völkers’s data, over 50% of home sellers this year and next will be COVID HENRYs, a third of whom work remotely and nearly half of whom desire travelling globally, and 41% of whom already own a second home. However, 49% of COVID HENRYs want to live in cities and 43% prefer suburban lifestyles.