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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