The Real Deal Miami

Study looks at affluent buyers’ hunt for dream homes

By Jennifer LeClaire | August 15, 2008 04:06PM

Homeowners at the highest end of the real estate market still have a dream house in mind – and zip code does play a factor in where some call home.

So says the just-released 2008 Coldwell Banker Previews International Luxury Survey.

The annual survey also offers a glimpse into affluent buyers’ perceptions of home values in a declining market.

“While 44 percent of those surveyed indicated that they plan to stay in their primary residence for at least 10 years, they also dream of owning the perfect home,” said Jim Gillespie, president and CEO of Coldwell Banker Real Estate LLC.

The survey reveals top locations for a dream were on an island (27 percent) or in a rural country setting (22 percent), followed by the suburbs (18 percent) or an international destination (18 percent).

Additionally, 17 percent of those surveyed confirmed that they have considered moving expressly to obtain a specific address or zip code.

Local luxury real estate brokers say Miami Beach and Fort Lauderdale Beach are two of the hottest zip codes in South Florida. Waterfront properties in Coral Gables, Pine Crest and Ponce Davis are also tops for affluent buyers.

“People aren’t just looking for water views. They are also looking for a high-value luxury home. That means it has a dock for their boat and jet-skis and other amenities that add value to the living experience,” said Gus Rubio, a senior vice president of Coldwell Banker’s Southeast Florida region.

Only eight percent of survey respondents actually admitted to having been influenced to purchase a property to “keep up” with friends or family. That coincides with Ashley Cusack’s experience.

“Even affluent buyers are getting more practical,'” says Cusack, a broker with Esslinger-Wooten-Maxwell Realtors in Coconut Grove. “They still want a high-end, luxurious home, but they are not as concerned about what the neighbor has as they are about getting what they need in a home.”

Part of what affluent buyers need is assurance of long-term value in their multimillion-dollar investment. In a market where some are concerned about declining values, high-end homeowners remain optimistic about home values, according to the survey.

Eight-five percent of the affluent homeowners surveyed expected the price of their homes to increase over the next five years. That’s a sharp increase from the 66 percent tallied in the 2007 survey.

In addition, four out of five of these homeowners surveyed believe the increase in value will be “significant” to “moderate.”

“When we talk about properties priced over $5 million, people feel very secure. When you start looking at properties priced at between $1 to $3 million people are still wondering what’s going to happen,” Cusack said.

“The good news is people are now starting to feel confident that we have hit the bottom and they are making smart purchases for the long-term,” she added.

The 2008 Coldwell Banker Previews International Luxury Survey polled 305 U.S. homeowners whose primary residence is valued at over $1 million ($2 million for California residents) and who have investable assets of more than $1 million. The average annual household income of the 2008 luxury survey’s respondents is $754,000.