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Appraiser’s Perspective: Time for a national lending standard

National Mortgage Professional
Apr 29, 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 years. 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 suburbs. 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. For more information, visit www.coldwellbanker.com.
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