With an appealing mix of climate, culture and geography, certain areas of the United States are natural vacation destinations and magnets for retirees. Many wealthy homebuyers have historically looked to leisure-rich spots like Hawaii, Florida and Arizona for second homes, or waited until they were finished working to make a move. That’s changing, with recent trends suggesting that younger homebuyers are not waiting until they retire to put down roots in places where they would love to live. In fact, homebuyer surveys and the accounts of local Realtors confirm that ultra high net worth individuals are highly mobile and flocking in growing numbers to areas once pegged as resort or second-home markets, as advances in technology, transportation and communication enable a “live anywhere” working-age population.
Buyer interest in traditional vacation destinations is especially evident in recent sales of homes near ski slopes and sandy beaches. In Vail, Colo., the average selling price of luxury homes in the popular ski destination jumped 42.5% over the past two years to $3.8 million in the fourth quarter of 2014. In a warmer climate, one luxury community with a big uptick in prices and sales is Marco Island, Fla., where the average selling price in the fourth quarter of 2014 was $2.16 million, up 34.5% since fourth quarter 2012. Hawaii is also hot. In Lahaina, on the island of Maui, last year’s $1.86 million average selling price in the fourth quarter was up 7% from fourth quarter 2012.
Leading the charge into traditional vacation destinations are younger wealthy buyers, who are especially likely to put lifestyle ahead of location when choosing a place to live. In a 2014 Coldwell Banker Previews International®/Luxury Institute survey of individuals with at least a $5 million net worth, 75% of millennials (under 35) and 65% of Gen Y and Gen X (35–44 years old) say they have “freedom to choose a residence that truly fits my lifestyle and will not limit my search based on location.” The elements they seek out are amazing views, an interior space that wows them and proximity to favorite activities.
WORK AND PLAY IN A DESERT OASIS
Paradise Valley, Ariz., is a luxury enclave just north of Scottsdale and Phoenix, where homes sold for an average of $1.9 million at the end of 2014. Although Arizona has long been a draw for retirees, the current crop of homebuyers is likely to be more focused on their work than their golf game.
“People conduct their business digitally or on the Internet, and my clients are doing it more and more,” says Jan Kabbani, an independent sales associate with Coldwell Banker Residential Brokerage in Phoenix. “I’m seeing lots of wealthy families and couples moving here for the amenities of the area, many of them in their 40s and far from being retired, coming here from California, Seattle, the Midwest and even Canada.” Tax savings can also play a role in tipping the balance for tax-friendly destinations like Florida and Arizona. Kabbani’s most recent Paradise Valley buyer owns a CPA firm in California that does most of its business in Asia, keeping the accountant constantly traveling abroad to meet clients. Being an accountant, he quickly realized that he could save big money on property and income taxes by moving to Arizona, plus he and his wife sought out the desert lifestyle.
Reprinted with permission by Coldwell Banker's Previews. 2015 Luxury Report.