Is the mansion dead? Now that the Baby Boomers are beginning to age many of them are looking to rid themselves of their grand estates. Downsizing seems to be the best lifestyle choice but there just aren’t enough wealthy GenX’ers to take over the supply. That leaves the Millennials, who have the population capacity, but also the best chance at creating wealth over the next decade.
However, trends seem to suggest that Millennials are more interested in living in the heart of urban cores where there’s easy access to work, restaurants, and nightlife. Developers can’t build condo communities, laced with pools, basketball courts, and lounge areas fast enough which seems to be drawing a strong Millennial market.
Here in the Triangle, an interesting shift has taken place. Like national trends, Millennials have flocked towards the downtown market--acquiring condos and renovating older homes. But the timeless mansion isn’t out of touch with the Millennial, as some may think. In fact, it’s just now beginning to scratch the surface of the market.
As a luxury real estate agent, one of my core jobs is to recognize trends and try to predict where the market is headed in the next few years. For the luxury home builder and real estate professional, there is one place we need to focus our attention when it comes to Millennials purchasing mansions. Our area of focus should start with which industries have a high probability that the practitioners of that profession will become high income earners and would also likely look to purchase mansions as a lifestyle choice.
The industrial boom for the Millennial generation’s era is without question found in the technology sector. Tech entrepreneurs who have invested an enormous amount of time, money, and effort building the next social media platform, or the next viral app, are leading the charge among the UHNW (Ultra-High Net Worth) individuals for mansions.
To understand the psyche of this entrepreneur one should recognize that many of them start their business out of Mom and Dad’s basement. After a few hundred thousand consumers begin using their new invention they seek the help of venture capitalist for an infusion of cash to begin marketing and expanding their product to help boost their user numbers. But at this stage they’re still not at the point where they can enjoy the revenue they’re generating. It’s not until the company goes public where suddenly the tech entrepreneur becomes the next big success and finds themselves members of millionaire’s row.
With so much success and notoriety the chances of living a normal life in a middle class neighborhood usually doesn’t appeal quite as much. The need to showcase one’s success becomes an important part of the narrative.
Another Millennial candidate for the mansion can be found in the medical specialist. Doctors such as Orthopedic Surgeons, Cardiothoracic Surgeons, and Dermatologist, to name a few, who spent years in med school living life on a budget. They’ve become so used to delayed gratification that purchasing a moderate home just doesn’t seem sensible. Furthermore, most doctors work long hours, and having the ability to go home to exquisite comfort and grandeur is not only a luxury, but for many, a necessity.
But there are also careers that equate status symbols with success. I happen to be one of those professionals so I understand first hand what it means to look successful in order for others to view you as successful. The reason why this is so important is because people that are for hire such as attorneys, real estate agents, fundraiser professionals, architects, financial brokers, and others tend to look for clients that have resources. But a vital truth is that people like to work with other people who are like them. Therefore there tends to be an expectation that if the service professional appears to be successful then they can likely help them with their problem.
A high number of Millennials are entering into service professional industries and focusing their business towards wealthy clients. Remember, their own image of success is what often helps them to become more successful. Millennials who occupy these roles will almost always be key candidates for the mansion product. Not only does the mansion add more credibility to their careers but it also adds more confidence to their ego which can be equally important.
Large beautiful estate homes have existed for hundreds of years, and they will continue to matter in generations to come, including this one. The mansion is still relevant and Millennials are looking to buy.
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