Which amenities can luxury homebuyers expect to find in today’s market? For our latest Real Estate Lab report, we combed through two years’ worth of luxury listings to see which words and phrases are trending up and down. We defined luxury listings as homes for sale that are priced at least four times above the median asking price for a given metro area: that means a million-dollar home in Rochester, NY, is a luxury listing, while a million-dollar home in San Francisco is not. We compared luxury homes listed between July 1, 2012, and June 30, 2013, with those listed in the previous year, between July 1, 2011, and June 30, 2012.
What’s In: Marble, Windows, and Booze
Looking at all of the words and phrases that appear in luxury listings, we identified twenty phrases that trended upward most strongly in the past year compared with the previous year. Luxury listings are now 78% more likely to mention a marble bath than one year ago, and 30% more likely to mention marble floors. Outdoor space is also on the rise: roof deck and terrace were 63% and 42% more common, respectively, than they were a year ago.
Luxury listings were also more likely to mention windows in the past year compared with the previous year. Oversized, floor-to-ceiling, ceiling, and large windows – as well breathtaking and ocean views – all trended upward, which suggests that buyers of luxury homes are increasingly paying for what they see when they look outward.
|Home Luxuries: What’s Trending Up|
|14||wood burning fireplace||22%|
Finally, more luxury listings mentioned fitness amenities like gyms (up 28%) and tennis courts (up 24%). But residents should remember to use those before they hit another upward-trending luxury amenity: wine rooms (up 30%).
What’s Out: Kitchens and Formality
Many kitchen and cooking amenities trended downward over the past year. Luxury listings were 16% less likely to mention a BBQ, compared with the previous year. Additionally, phrases that were kitchen-related (custom cabinets, center island, granite counters, breakfast area) and appliance-related (double sinks, stainless appliances) were less likely to appear in luxury listings over the past year than in the previous year.
Also decreasing were mentions of formal rooms: formal dining and formal living room were both down 4%.
|Home Luxuries: What’s Trending Down|
|16||formal living room||-4%|
|18||large master suite||-3%|
What’s behind these trends in luxury listings? One factor is a shift in where luxury homes are for sale. Luxury listings increased in theNew York and Washington D.C. metro areas, and where many high-priced homes there are fancy condos or co-ops, which are more likely feature urban luxuries like roof decks than suburban luxuries like BBQs, covered patios, or pools. Still, many of the upwardly trending luxury features like tennis courts, ponds, and outdoor kitchens aren’t found in urban condos, so these trends aren’t ONLY about geographic shifts in luxury listings.
Overall, there seems to be a move toward luxury listings calling out expansive windows, great views, and fitness amenities – and a move away from indoor cooking and eating. The real winner of these recent trends in luxury homes could be fancy restaurants: luxury homes aren’t emphasizing kitchens as much as they used to, but buyers of those homes still need to eat. For some of those luxury-home buyers, the most desirable view out of those floor-to-ceiling windows might be onto a lively neighborhood full of good restaurants.
Jed Kolko, Chief Economist
October 31st, 2013