Luxury Real Estate Marketing Trends- 2013 – Part 2
Here is a surprising luxury real estate marketing trend that the Wall Street Journal recently reported: Many high net worth individuals who can afford to buy are leasing luxury homes instead!
According to the WSJ, “The rise of the trophy rental comes as many Americans continue to abandon ownership in the wake of the country’s housing crisis and credit crunch. The US homeownership rate was 65.3% in the third quarter of 2012, its lowest rate since 1996, according to the Census Bureau. In the midst of the housing boom, in 2003, the homeownership rate reached 69.4%.”
Why are people willing to pay top dollar to lease a trophy property (in NY $35,000 per month or in LA $45,000 per month)? Renting offers the flexibility to change your mind about what neighborhood you want to live in. Apparently, the sentiment is that your primary residence does not need necessarily need to be an investment.
Some of these trendsetters do not want to tie up their money in colossal down payment. They would rather invest in the financial markets or in their own business. Others want to maintain liquidity.
Recently, we were talking to a real estate company who specializes in relocating professional athletes. The athletes’ financial managers are advising them to lease rather than buy in the new city they are playing in, even if they have long -term contracts in that city.
Some investors are purchasing luxury properties for the purpose of renting as an investment. The growth in the rental market has made this an attractive real estate investment.
Stay tuned for our next luxury real estate trend. Here is a clue, "dead tree marketing"!
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