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Strong Luxury Home Sales Predicted by New American Affluence Research Center Survey
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Added: 12/27/2003
Type: Summary
Viewed: 923 time(s)
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Strong Luxury Home Sales Predicted by New American Affluence Research Center Survey
The economic recovery, and sales of both primary and vacation homes, will get a boost from increased spending by the primary beneficiaries of the recent tax cuts and the rise in the stock market according to the latest semi-annual Survey of Affluent Americans ™ conducted by the American Affluence Research Center (AARC).
Completed in October, the survey focused on the wealthiest 10% of all U.S. households. With incomes averaging $270,000, these 11 million households have a minimum net worth of $750,000. They account for 40% of total personal income and two-thirds of the personal wealth of all Americans.
Nearly 10% of the survey respondents indicated plans to acquire a primary residence during the next 12 months, up from 4% six months ago. This represents over one million homes, with approximately 460,000 of those being new construction and 590,000 being sales of existing homes.
Eight percent of those surveyed reported plans to acquire a vacation home, up from less than six percent one-half year ago. This represents nearly 900,000 homes with approximately 375,000 of those being built new and over 500,000 being sales of existing homes. Plans to purchase or build a vacation home were highest (15% and 10% respectively) among those with a net worth of $6 million or more.
In aggregate, nearly 18% of the affluent market appears to be planning the acquisition of a home during the next 12 months. This compares to about 10% six and 12 months ago. The latest results represent about 835,000 new home sales (approximately 40% of the pace of new home starts in September) and nearly 1,100,000 existing home sales.
In the two previous surveys, primary homes represented 40% of the expected home acquisitions. In the latest survey, primary homes are expected to account for 55% of the homes acquired. New builds have held relatively steady throughout the three surveys at about 40% of home acquisitions.
Among all the people surveyed, about one in five plan major remodeling to their homes in the next 12 months. At 39%, households most likely to remodel have a net worth of $ 6 million or more. The 28% of households with an income of $200,000 or more also have a strong intent to remodel.
This survey has a maximum margin of error of five percentage points. The complete 35-page report is available for $295 from AARC.
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