By Natasha Solo-Lyons / Photo by 4Kodiak Getty Images
A new report revealed where wealthy Americans call home. As the rich have relocated this past year, more than one factor has influenced their moves and spending habits.
The real-estate brokerage Coldwell Banker issued a 132-page report breaking down where the wealthy have moved and why — as well as which locations have served as the most desirable relocation retreats. It includes six areas where the real-estate market is on the rise or exceeding expectations.
Taking the pulse of markets across the US, the brokerage identified hot spots the wealthy began to invest in during the pandemic by analyzing statistics that indicated demand, like local sales prices and total number of homes sold. It also asked local agents for insights, as they witnessed COVID-19-era buyers descend firsthand. With the housing market uprooted by the coronavirus pandemic, many Americans have left major cities like Los Angeles and New York over the past year for homes in the suburbs and vacation hot spots.
Using those metrics, Coldwell Banker singled out three areas it labeled “secondary markets on the rise” for buyers: spots in the Southwest and mountains where the wealthy moved in 2020 but where the demographic had previously not sought out property at such robust levels.
Three “markets exceeding expectations” were identified as well: cities where the wealthy weren’t expected to invest in so heavily — but have. In each of these mountainous, coastal, and Midwestern locations, the number of homes sold each month had increased significantly relative to inventory since the start of the pandemic.
As for their common ground, each location’s luxury market is more affordable than similar real estate in other major cities — and buyers can snag luxury properties at lower costs than they would in places like San Francisco or New York.
“Efforts to safeguard wealth led people to cast wider nets into real estate, stocks, art, technology, gaming, and other niches; many accelerated plans to move to tax-friendlier locales,” the report said.
It added: “Ideas about wealth itself also shifted as the affluent set sights on ‘intangible luxuries,’ like family, health, safety, security, and space.
“The search for intangibles created new demographic groups, called ‘affluent trailblazers’ who relocated from cities to small-town hidden gems, suburbs and popular second home destinations in 2020.”
Affluent trailblazers are broken down into three archetypes — explorers, new suburbanites, and resorters — based on factors like net worth, age, and desire. While explorers tend to be under 39, married with at least one child, and worth between $1 million and $5 million, new suburbanites are between 39 and 54, have a net worth between $5 million and $10 million, and tend to be married with two or more school-age children. Resorters are over 54, married with adult children, and tend to have the highest net worth of the three groups, $10 million or higher.
Explorers left high-cost cities in 2020 in search of “hidden gem” locations where they could get more space and a better quality of life, new suburbanites sought more square footage and home amenities amid the pandemic, and resorters fled cities for their favorite vacation destinations.
Tied together by their status as once secondary markets, the locations Coldwell Banker identified as cities on the rise are moving up in ranks to compete with the likes of New York and LA. Not far behind are the markets exceeding expectations, as well as booming secondary and even tertiary markets that reflect buyers’ desire for more square footage and amenities without ditching the attractions of big-city life.
But while some major cities saw an exodus in residents and slump in residential demand, others ascended into a state of frenzy, with bidding wars and overasking offers on properties in once secondary cities.
Here’s a deeper look inside the places wealthy homebuyers discovered in droves over the past year, and the three unexpected locations they’re migrating toward next.