‘Millennials want turnkey properties, and are willing to pay’: Report
By AMIRAH KEATON
Luxury real estate firm Sotheby’s International Realty is highlighting key trends poised to shape the market in the coming months.
The company’s latest Luxury Outlook Report shows that while U.S. home sales volume landed slightly behind that of 2023, high-end properties performed better than those of average price. One of many forces set to influence the sector this year, the skyrocketing buying power of millennials continues to boost the $10 million-and-up housing segment.
“When we first introduced the Luxury Outlook report in 2021, the definition of home was undergoing a seismic shift because of the pandemic,” said Bradley Nelson, chief marketing officer, Sotheby’s International Realty, in a statement.
“Unprecedented changes in the real estate market created a critical need to provide our clients with timely intelligence informed in real time by our unparalleled network of global real estate advisors,” Mr. Nelson said. “Our goal with this report is to deliver strategic insights so that clients can make informed decisions in their investment portfolios.
“As we enter 2025, the global luxury property market remains resilient. Our report provides an in-depth analysis of the many indicators that validate experts’ forecasts of an impending real estate cycle upturn.”
For the report, Sotheby’s International Realty lists insights from its luxury agents. The 2025 Luxury Outlook is additionally backed by data from J.P. Morgan Private Bank, PricewaterhouseCoopers, Cerulli Associates, Henley & Partners, UBS and the National Association of Realtors (NAR).
Millennials redefining the market
A pivotal factor impacting the luxury real estate market is the anticipated intergenerational wealth transfer.
According to a January 2022 report from consulting firm Cerulli Associates referenced in the 2025 Luxury Outlook report, approximately $84 trillion is expected to pass from the Silent Generation and baby boomers to younger generations by 2045, with millennials potentially inheriting up to $27 trillion. This substantial fiscal event is already bolstering the purchasing power of those born between 1981 and 1996.
In 2024, millennials accounted for 38 percent of all home purchases, a 28 percent increase from 2023, surpassing baby boomers as the dominant force in the market.
With this generational shift underway, luxury real estate is experiencing new buyer preferences, particularly a demand for turnkey properties—fully finished, modern homes requiring little to no renovation.
“They don’t want to deal with improvements,” said Daniel Heider, global real estate advisor, TTR Sotheby’s International Realty in Washington, D.C., for the report.
“They want it ready, down to the landscaping, and they’re willing to pay for it.”
Unlike older generations who often invest in properties requiring renovations, this cohort favors homes equipped with smart home technology, energy-efficient designs and wellness-driven amenities (see story). Signaling a shift in what constitutes modern luxury, millennials are prioritizing features that align with their fast-paced lifestyles, with many already receiving the support of older relatives.
“They are coming into more money and many are now going from their first house to their second,” Mr. Heider said, for the report.
“It’s not necessarily a new thing for us to list a property for $3 million, $4 million or $5 million and sell it for cash to the parents of somebody who is incoming for graduate school.”
Luxury real estate’s future
Millennials are looking to multiple forms of media, including social platforms and television shows – the report specifically mentions the “White Lotus Effect,” referring to the hit HBO show’s bearing on the preferences of wealthy younger prospects, including “digital nomads,” who are increasingly buying in vacation markets such as Lake Como and Lake Maggiore, Italy – for inspiration.
“Instagram has brought so many ideas and home features to so many people’s attention,” said Kelly Ladwig, global real estate advisor, Zeitlin Sotheby’s International Realty in Nashville, for the report.
“Now, my clients might want a walk-in scullery, a breakfast nook or a keeping room,” Ms. Ladwig said. “They expect wine storage, bars and outdoor entertainment and for their home to be wired for sound and media.
“Many want golf simulators, music rooms and gyms, and we are now seeing builders put electric vehicle chargers in garages.”
Citing a 2019 Statista report, Sotheby’s shares that nearly seven out of every 10 buyers aged 28 to 44 have described social media as “extremely” or “somewhat” influential on their home decor decisions.
In addition to millennials’ growing influence (see story), Sotheby’s identifies several other key trends, including the global mobility of high-net-worth individuals. The report projects that about 135,000 HNWIs will relocate in 2025 (see story), seeking favorable tax regimes, political stability and lifestyle enhancements.
Additionally, the luxury real estate market is anticipated to experience significant price stabilization in 2025. This normalization may present strategic opportunities for buyers and investors looking to enter or expand their presence in target markets.
As the luxury real estate market approaches its next cycle, understanding the preferences of emerging buyer demographics, such as millennials, while staying attuned to broader market trends will be crucial for stakeholders aiming to navigate an evolving landscape.
“It’s exciting working with [millennials],” Ms. Ladwig said, for the report.
“They’re savvy, they’re smart and they are much more knowledgeable about what luxury is.”
This article originally appeared on LuxuryDaily.com. Luxury Portfolio is pleased to bring you the latest trends and insider takes through our exclusive partnership with the go-to destination for luxury news. Subscribe today.