Metropolises are staging a comeback. Resort markets continue to be buoyed by affluent individuals buying second homes in record numbers. From urban repatriates and second-home owners to older millennials, boomers and Gen-Zers flush with cash, there is a new group of power players making an impact on high-end buying and selling in 2021.

A forthcoming report from the Coldwell Banker Global Luxury^® program offers insights into these real estate influencers. To get a sneak peek at what’s inside “A Look at Wealth,” we spoke to David Marine, chief marketing officer of Coldwell Banker Real Estate LLC; Michael Altneu, vice president of luxury for Coldwell Banker Real Estate LLC; and Diane Hartley, president of The Institute for Luxury Home Marketing.

Homes & Estates: One of the findings tracked in the report is the unprecedented wealth growth in the U.S. from 2019 to 2021. Where do you see luxury real estate falling into this trajectory?

Diane Hartley: A recent study from Oxford Economics found that American household net worth increased by 16 percent from the end of 2019 through Q1 of 2021. This marked the largest 15-month stretch of gains since 2004. This growth happened in the top two income brackets, which are driving the luxury real estate market today. If you had wealth two years ago, you have even more wealth now. People have more money to spend on a different asset class, and their properties are worth more.

David Marine: Real estate has always been a marquee element in the luxury portfolio. After spending so much time at home, homeowners are now assessing whether they want to enhance their living space or dreaming about where else they can go. The luxury market thrives in this scenario. The opportunity for that ski chalet or beach destination is becoming a reality after a year of pent-up demand.

Michael Altneu: The affluent have always seen real estate as an asset class. The difference now is what kinds of homes they’re buying, how many they’re buying and why. Much of what’s been driving these purchases goes back to lifestyle. There has never before been such an intense shift in purchasing and consumer behavior on a global scale as we experienced in 2020. Space, location and health were viewed through a much different lens by every person in every market at exactly the same time.

H&E: Sales and prices of single-family detached luxury homes have been trending up each year since 2019. What’s driving demand from your point of view? Are the reasons why people are buying different from last year?

DM: There’s some “FOMO meets YOLO” going on. The events of 2020 forced people to realize that they want to make the best of where they reside. Perhaps they’ve been sitting on the sidelines and missing out on that dream place that they just haven’t jumped into yet. Plus, the ability to get greater value for a property gives them peace of mind when spending more on that next home. They’re saying, “Let’s buy that dream home. We only live once.”

MA: Remote-working capabilities allowed people to spread into other markets like never before and will continue to help drive demand in the future. Lifestyle has always been the key driver in the luxury real estate space, but now it’s at the forefront of everything. People sought out secondary homes in 2020 to gain more space and distance. We may see a greater focus on larger primary homes — ones that better encompass all aspects of their lifestyle.

DH: There are three groups of people impacting the current luxury landscape. You have the “FOMO meets YOLO” group, which often happens after tragic events. We saw a similar trend after 9/11. The second group is those greatly impacted by how much money they now have. During the height of the pandemic, people spent less money because they were staying home more, so they had greater savings. I saw a figure that had the U.S. net private savings rate in 2020 as one of our highest in history. The last influential group is the real estate community. I don’t think we talk enough about their vital role in buying decisions. The way real estate professionals bring a home to market today is greatly influencing the seller and the selling price. They’re emphasizing luxury staging, putting better homes on the market and building interest through pre-MLS “sneak peeks.” They’re not forcing anyone in this market to think twice about buying a home. They’re making the decision easy.

MA: I agree. The role of agents has increased tenfold since the pandemic. They aren’t just guiding the real estate purchase; they’re guiding all the important aspects of their clients’ lives. They have become lifestyle advisors and trusted members of their inner circle.

H&E: Who are some of the major influencers dominating the luxury housing marketplace?

MA: We’re going to see a shift toward the younger generations of wealthy in this report. Millennials, specifically “Golden Millennials,” as we’re calling the 35–40 age group, have always been influencers in their own right. They’re going to be leading the next generation of luxury real estate.

DM: We’ve heard for so long about the millennial marketplace and the great wealth shift that would eventually happen to that group. Well, they’re no longer the young, whimsical demo. This Golden Millennial demo (I’ve also heard some people call them “geriatric millennials”) will be the ones looking to drive this real estate market. Baby Boomers are the ones selling to them and are likely the ones benefiting from it. As Michael said, millennials are now part of a virtual workforce who can live anywhere, and their lifestyle demands are changing, which is also a factor in igniting the luxury real estate market as they start looking at second homes or vacation homes or even enhancing their primary residence.

DH: There’s also another demographic that we don’t talk much about: the 40–57 age group, the Gen Xers. I call them the “Buy-ups.” They are impacting the mid-level luxury market.   

DM: We’re seeing this influence bear out in the market, as secondary home markets become long-term burgeoning markets. Idaho has become the new L.A. Parts of Texas and North Carolina are seeing an uptick in affluent out-of-state buyers. Places that weren’t on the luxury radar are suddenly starting to become destinations.

DH: People are taking their money out of high-cost areas like California and bringing it to markets like Coeur d’Alene, Idaho, which just exploded last year. I call it “discovery.”

H&E: Do you think the consumer mindset has changed enough that the exodus away from cities is going to last?

MA: The year-to-date sales numbers for attached homes are already trending up — which we’re interpreting as a positive sign that people are returning to dense marketplaces like New York, San Francisco and L.A. Cities have always been a magnet and global hub for high-net-worth individuals.

DH: We’re seeing a boomerang effect. The exodus we saw from cities in 2020 was more about acting on impulse than a long-lasting statement about how people feel about cities. The wealth effect is also a huge aspect. Luxury consumers always have a choice in what they do and where they live.

DM: We’ve seen this trend before in other markets, where an inciting incident forces a temporary exodus from metropolitan areas. The thing is, whether it’s New York, Miami or L.A., cities always bounce back. There’s an innate attraction to being at the epicenter of these cities. The prestige that comes with that won’t be lost for long, even when market conditions trend down.

MA: Cities will never disappear. They are the cultural hubs that power surrounding communities. People will always want to be in a place that embraces change and connectivity, to feel like they’re engaging something authentic and meaningful, something bigger than themselves.

DM: This also plays into our DNA as a company. Coldwell Banker was started in San Francisco, after the city was destroyed by the 1906 earthquake. We have always been a part of our local community’s fabric, and our agents have built and rebuilt the cities where people most desire to be connected. Cities bring people together.

H&E: Final thoughts?

DH: We have to look at the change in the climate of taxation. We are seeing a continuation of the trend of moving from high-tax states to low- or no-tax states. We’ll also look hard at the impact of the 2022 federal tax proposal on capital gains taxation.

DM: We’re seeing a positive climate change. Smaller markets previously not on the luxury radar are now coming into existence. It will be interesting to see which markets will be the new Aspen or Naples, Florida.

MA: In 2020, we were operating from a place of fear and uncertainty – but now we’re operating from a place of strength.

Two prominent Keller Williams luxury agents, one on each coast, share their secrets to success and views on the industry.

By Roger Grody

With reality shows like Million Dollar Listing and Selling Sunset, one would think there are no secrets remaining in the real estate business. But

America’s top-producing agents understand that building successful practices requires tremendous commitment, especially when there are no cameras rolling. Two Keller Williams luxury agents provide their insights.

East Coast Success Story

The primary territory of Keller Williams luxury agent Seth Levin — his sales team ranks among the top one percent of agents nationwide — is the uber-competitive island of Manhattan. After more than a decade with another company, the LevinKong Team joined Keller Williams five years ago, impressed by its culture of collaboration and global reach. Since then, the group has earned Sales Team of the Year honors multiple times.

A former Pinnacle Award winner and member of the International Associate Leadership Council, Levin is a frequent panelist and often-quoted real estate expert. A renowned negotiator, he is an active real estate investor and when not working — which can be rare for agents of this caliber — Levin enjoys architecture, golf and exploring new cultures around the globe.

Building Relationships

Early in his career, Levin entertained frequently with prospective clients, dining out and hitting clubs with Wall Street money managers and entrepreneurs. As a family man, those relationship-building efforts have morphed into fine dining — Levin stays current with the Big Apple’s world-renowned restaurant scene — or golfing in the Hamptons. A lover of fine art, Levin concedes, “You’re more likely to see me at a gallery opening than at a party.”

When mentoring young agents, Levin advises, “Your social life has to be genuine, so you can build natural, organic relationships,” adding, “It’s about establishing relationships with the right people, rather than trying to connect with everybody.” Observing that much of his own success can be traced to a handful of key relationships, the agent states, “Treat every opportunity as if it was the most important in the world, and when clients see
you genuinely care about them, they’ll advocate for you.”

Loving New York

It never hurts for a real estate agent to be emotionally invested in his or her territory, and native New Yorker Levin expresses a passion for his hometown. “I’m proud of what we do to contribute to the city, keeping the torch of New York alive,” says the agent, who suggests the narrative of an exodus from Manhattan is overblown. “The market for trophy properties and funding for ambitious new developments demonstrate the enduring allure of this aspirational city, and my international clients continue to view New York as a primary place to invest,” says Levin.

Follow the Data

“Because I’m very data-driven, I’m not an order taker, but an idea presenter,” says Levin. “There’s an infinite number of micro-markets throughout New York City, based on geography, pricing and lifestyle, and I study them all,” says the agent, constantly converting data into productive client contacts. “I love being an investigator and coming up with ideas to pitch to my clients, which represent a genuine, purposeful reason to call, and they appreciate that,” he says.

Business Begets Business

Levin, who personally hosts the first open house for every property, cites an occasion when he attended one for a modest $400,000 listing despite an event for an $18 million property occurring simultaneously. “Not only did I sell it, but got another listing in the building and met the father of a prospective buyer who gave me an $8 million listing on Central Park West,” recounts Levin. “You have to treat every client like gold — they should all receive the same luxury treatment — and you need to understand their motivations and ambitions,” advises the agent. Levin, whose mantra is “business begets business,” genuinely enjoys coaching and mentoring colleagues, but also recognizes that more than 35 percent of his business is based on referrals from other agents.

West Coast Success Story

On the opposite coast, Caroline Huo specializes in the San Francisco Bay Area’s Mid-Peninsula territory. A loyal clientele depends on the Caroline K. Huo Group in the communities from Burlingame down to Atherton (the priciest market in the nation), as well as the northern Silicon Valley communities of Menlo Park and Palo Alto.

Since joining Keller Williams as an individual agent in 2015, Huo and her team continually rank in RealTrends’ Top Agents in California. A 17-year veteran in the industry, she has earned numerous Keller Williams production awards, serves on her region’s International Associate Leadership Council, supports Keller Williams Realty International’s R2G2 Growth Guide Program, and is a proud recipient of her region’s Eagle Award.

Overcoming Challenges

Noting the business can be challenging for women with children, Huo recalls, “I’d literally be painting a door in preparation for a photo shoot before running out to catch my daughter’s game, then I’d be posting open house signs before getting home to cook dinner.” She explains, “You really have to be Wonder Woman and The Flash, serving your clients and still being there for your family…I missed out on a lot.”

Huo reports many women burn out, leaving the industry just when they are entering the prime of their careers, unsure how to juggle family obligations and demanding clients. She learned, “You must find leverage.” Deeply appreciative of her husband, Huo suggests, “Partners have to be super supportive because our world is so crazy and all-consuming.”

Building a Team

The staffing at the Caroline K. Huo Group is heavily weighted toward service, with two agents supported by six professionals dedicated to operations and marketing. While every position requires a different skillset, Huo insists on specific qualities for all team members. She explains, “They need to be smart and driven, must have a sense of anticipatory service — knowing what clients need before they even ask — and should be fearless. Above all, I insist on integrity.” Huo adds, “We live our MVVBP [Mission Vision Values Beliefs and Perspective].”

Perpetual Audition

Huo believes that an agent’s work is never completed, explaining, “Just because you’ve closed a transaction doesn’t mean you’ve earned the next one…You’re constantly interviewing or auditioning to stay in their world.” Her office maintains long-term relationships with clients, keeping track of milestone events in their lives. “We have a relationship-oriented database, not a transactional database, and we want to be there for all of their real estate needs and beyond,” says Huo.

“As agents, we’re assisting people with some of their biggest financial decisions, helping them to build wealth and realize their dreams,” says Huo, who notes some transactions occur during difficult times, such as following the death of a loved one or divorce. “It’s important to meet people where they are, understand their vision and not only get them to the finish line, but through the finish line.” These principles are transferable to any market, insists Huo, who states, “The concepts of client care and service are universal, and everybody appreciates them.”

Colleagues Matter

“It’s important to apply those same principles when working with fellow real estate agents in the community, even though they may be competitors,” suggests Huo. “We have to work together in the industry to elevate one another, which is why I speak at professional events, even though it’s out of my comfort zone, sharing learnings with peers.”

Huo reports she frequently refers listings for San Francisco properties to local agents better able to navigate a client through that city’s unique market nuances, and thanks to ongoing relationships she is the beneficiary of similar referrals. “By building relationships with other agents, they become more than just colleagues, but friends as well,” says the accomplished professional.