2021 was a record year for many in the real estate, building and luxury markets, which is unsurprising given the insights of many end-of-year reports on luxury consumption and trends. Wealth is continuing to increase. Globally, the amount of ultra high net worth individuals has risen by 1.7% and in the U.S., wealth has grown by 17%.
The hot luxury real estate market drives a lot of success across multiple home design industries including architecture, design, building and home decor. Building out a refined marketing strategy, better products and more effective customer service for your luxury brand starts with understanding the wealthy audience in 2022 and what trends are on the horizon.
The pandemic shifted just about everything in life and business. According to Michael Altneu, Vice President of Luxury at Coldwell Banker Global Luxury, three major changes occurred to help boost the luxury real estate market: 1) the COVID pandemic caused people and families to refocus their values on what’s most important, 2) wealth was substantially increased from cryptocurrency gains, strong stock market earnings, increases in home values across multiple markets, and increased savings, 3) the notion of “home” as a multi-functional space.
What does this mean for your marketing efforts? Take a look at your messaging to make sure it speaks to values and diversity of lifestyle. Buyers want to finally spend time on what makes them happy. What does your product, services or location give to the buyer to help them live a more valuable life? For our clients in the Hamptons, this might mean focusing on the luxurious beach lifestyle. For our manufacturing clients, creating messaging around hardware functionality that makes living at home easier and more pleasant might be worth visiting.
Even amidst huge disruption from the Pandemic, the total size of the global ultra high net worth population (UHNW) grew 1.7%. According to WealthX’s 2021 Wealth Report, the two highest regions of growth were North America and Asia, with San Jose having the most densely populated UHNW audience.
Experts are forecasting a 22% increase in the ultra high net worth population over the next five years, causing an additional 43,000 people to enter this coveted audience group. Success in Silicon Valley and other tech hubs, in addition to access to inheritances, give us reason to believe that the UHNW populations are also getting younger.
With overall wealth and the UHNW audience growing and the audience getting younger, marketers are given a reason to prioritize digital over all other forms of advertising. It also influences the need to prioritize creating a hyper-personalized marketing strategy, as younger users are more discerning and access more digital platforms than any other age group.
We mentioned above that pandemic shifts have caused people to look at their home as a multi-functional space that can include areas for personal health and wellness (gym, sauna, spa), outdoor and indoor hosting and office spaces. People are also shifting their perspective on their second homes and taking a “co-primary” approach, where their second/third homes are just as decked out as their primary home.
This means custom home projects or real estate sales in secondary markets are getting bigger and people’s buying decisions are being directed by acreage, square footage, lifestyle, nearby towns or expansive views. Buyers are taking a “legacy” approach to their luxury second homes rather than wanting something they view as temporary.
Again, use this information to refine your messaging and the personalization on your website. If you service multiple areas or towns, you should have personalized content specific to each town, rather than at a state level. If you are displaying products or a portfolio of work, make sure to show the breadth of your inventory or experience to align with different needs.
Need help building out a multi-channel strategy to better reach the ultra high net worth? Drop us a line here.