Today, nearly three times as many individuals with a net worth of $5 million+ own real estate in the $1-5 million range compared to the numbers in 2019 — an 180% increase of luxury property ownership in a mere three-year period.
This staggering growth led us to a question: Who are these new real estate power players and how are they driving the market in 2021?
Thanks to data compiled by WealthEngine, Wealth-X and The Institute for Luxury Home Marketing, our team at Coldwell Banker Global Luxury has just released “A Look at Wealth 2021: Real Estate’s New Power Players,” providing insight into luxury real estate’s unprecedented rise, fueled by the new movers and shakers who are reshaping the industry.
Wealth grows, the luxury market thrives
“A Look at Wealth” tells the story of the symbiotic relationship between wealth and real estate: the volume of wealth is growing and luxury real estate is booming.
U.S. individuals with a net worth over $5 million grew in population by roughly 17% and their dollar volume increased at a similar rate from 2019 to August 2021. The number of homes owned by these individuals is now 4,959,179, with those with a $5-10 million net worth representing the highest growth rate compared to any other wealth group.
A growing volume of wealth
While 2020 was a year of record for the luxury real estate market, 2021 is on course to surpass the numbers from last year. Volume of wealth spent on luxury real estate in 2020 compared to 2019 rose by over 21%, and escalated to a staggering 79% in 2021 from January to August 2021 compared to the same eight months in 2019. Stats at the end of August 2021 already show that real estate wealth in the luxury property market is greater than both the full years of 2019 and 2020, and we still have four months to go!
Additionally, the number of properties purchased between January-August 2021 in the $1-5 million range jumped an incredible 142% for luxury single-family homes and 129% for luxury attached properties compared to the full year of 2019. About 71% of luxury properties currently owned by those with a net worth over $5 million are now valued in the $1-5 million range.
How did we get here?
The cryptocurrency boom, surging stock markets, higher 401(k)s, and investments in private equity and hedge funds, paired with rising home prices and low-interest rates, allowed consumers to borrow and save more while re-investing their cash. A combination of all these factors has led to a house hunting and migration frenzy we may never see again in our lifetimes.
The new power players
Between the unprecedented growth of real estate wealth in the $1-5 million range and the rising number of people with a net worth $5-10 million, we identified the power players of the 2021 luxury real estate market.
Leaders in Luxury Transactions
These influential home buyers are responsible for the bulk …….