Appraiser’s Perspective: Time for a national lending standard

Appraiser’s Perspective: Time for a national lending standard

April 28, 2005

Affluent baby boomers not settling down yet: Majority say current home not their lastmortgagepress.comluxury home market, buying habits, baby boomers
Today's affluent baby boomers are not slowing down, and the
majority remains "on the move." The Coldwell Banker Baby Boomer
Real Estate Survey, an online random sampling of 363 certified
Coldwell sales associates who market luxury homes, found that
affluent baby boomer homeowners (ages 40-58) remain an upwardly
mobile group. In fact, more than half of the baby boomers (52
percent) who purchased a luxury home through Coldwell Banker within
the last two years told their sales associate they plan to spend
fewer than five years in their current home. Eighty-six percent of
these homebuyers said they have purchased three or more homes
throughout their lifetimes. Almost half said they have lived at
their most recent residence for a period of only one to five
It seems that size also matters to this group. The Coldwell
sales associates indicated that 65 percent of their baby boomer
clients made their most recent home purchases because they wanted
bigger residences. A mere 17 percent were looking to scale down,
while another 15 percent were buying a second or vacation home. The
typical size of a recent luxury home purchased, according to the
surveyed Coldwell sales associates, was 4,500 sq.-ft. or less with
four bedrooms, three bathrooms and a backyard. The overwhelming
majority (88 percent) of these luxury homes costs approximately $1
million, while only 12 percent of the sales associates reported
recent sales of homes costing more than $2 million. The survey also
indicated that 60 percent of these buyers purchased existing
single-family homes, while 21 percent opted for new construction
and 16 percent purchased condos/townhouses.
"Our survey clearly shows that wealthy baby boomers want to
enjoy the rewards of their hard work," said Jim Gillespie,
president and chief executive officer of Coldwell Banker Real
Estate Corporation. "They want bigger and more luxurious homes and
want to remain active. They are in their peak earning years, have
benefited from many years of strong stock market returns and have
built tremendous equity and appreciation in their homes. These
factors, along with many receiving inheritances from their parents,
are allowing the luxury home market to thrive and it should be
robust for years to come."
The Coldwell Banker survey shows baby boomers are very
particular about what they look for in a luxury home, the types of
improvements they want to make to the home and the areas in which
they choose to live. Coldwell sales associates reported that
boomers were most interested in amenities such as a main floor
master suite (47 percent), three-car garage (44 percent) and a one
floor home (40 percent). The survey also found that the vast
majority of boomers (87 percent) expect to make renovations to
their new homes. Sixty-seven percent prefer to live in the
Gillespie pointed out that boomers are indeed the driving force
in the luxury home market. Nearly 60 percent of the surveyed
Coldwell sales associates reported that those between 40 and 58
years old accounted for a large majority of their luxury home sales
over the last two years.
The Coldwell Banker Baby Boomer Real Estate Survey was
commissioned by Coldwell Banker Previews International and
conducted by Zoomerang Research in January 2005. Coldwell Banker
defines a luxury home as having a listing price of at least
$500,000, priced within the top 10 percent of its market, and of
exceptional style and quality.
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