Focus Shifts Away from Primary Residences

Conventional wisdom says that affluent homeowners who bought bigger, better primary residences, or made dream home purchases during the pandemic are most likely going to be settling down – and not looking to sell – in the near future.

With their primary residence more or less accounted for, they can now turn their attention toward building generational wealth by investing in multiple, lesser-priced, smaller homes.

After all, we already know their affinity for real estate investment is high.

In fact, many appear to have their sights set on these types of property purchases over the next few years. According to our survey, only 28% of high-net-worth respondents who are planning a home purchase in the future said that the new home would be a primary residence. Comparatively, 72% of those said that the new home would be either a second residence, rental property, or vacation home.

Their focus on investment and secondary home ownership is notable, as these properties tend to be smaller and priced lower. They may not expect a quick return on their investment over the next few years, but that’s not the point of these purchases. Whether they are going to be purchasing a rental property in a second-tier city as part of a retirement plan or a condo in a college town for their university-bound child, they have moved past the short-term lifestyle concerns of pandemic living and have now adopted a long-term view of setting up their families for the future.

High-Net-Worth Future Purchase Plans

72% 28%

“I’ve had at least four different families – with parents ranging in age from 35 to 60 – who sold their homes in the Chicago suburbs and moved to bigger homes in Naples, Florida, during the pandemic,” said Dawn McKenna, a Luxury Property Specialist affiliated with Coldwell Banker Realty in Illinois and Florida. “While they love the Naples lifestyle and the weather, it turns out that their Midwestern roots run deep and they miss their friends, family, and the culture. So, many have recently purchased smaller properties back home – a pied-a-terre in the city, a luxury townhome in the North Shore/western suburbs, lake houses in places like Lake Geneva or New Buffalo. The lake houses serve two purposes as they can be rented out when not in use. The work-from-home lifestyles were very relevant during the pandemic, but now that things are settling down people want to go into the office again and they want a change of environment. By owning multiple properties, they can feel like they have a little slice of home in a variety of locations.”