PARSIPPANY, N.J., Nov. 16 /PRNewswire/ -- The inaugural Coldwell Banker(R) Luxury Index has found that luxury spending is resistant to interest rate hikes. Sixty-one percent of U.S. luxury homeowners surveyed stated recent increases in interest rates would have no impact on their luxury item purchases. In fact, more than one third said that they are buying more luxury goods and services than ever before, with many of these purchases going toward making their homes more luxurious and valuable. This is a major finding of the Coldwell Banker Luxury Index, a study conducted in August 2004 of U.S. luxury homeowners -- those owning homes valued at $1 million or more -- concerning their attitudes, preferences and purchasing behavior related to luxury goods and services. The national survey of 300 respondents was conducted by telephone by International Communications Research (ICR) of Philadelphia and commissioned by Coldwell Banker Real Estate Corporation, a leader in luxury real estate sales. "The luxury market is booming," said Jim Gillespie, president and chief executive officer of Coldwell Banker Real Estate Corporation. "Sales this year through our luxury marketing program, Coldwell Banker Previews International(R), are up 52 percent year-to-date. This is particularly significant considering that in 2003 certified Coldwell Banker Previews International sales associates were involved in more luxury homes sales than during any other year in company history. The index also indicates that luxury homeowners are investing in their homes by remodeling and adding fantastic amenities." Most Popular Amenities for the Home Million dollar homeowners are spending to improve their homes. While 85 percent already have security systems in their homes and 77 percent have gourmet/designer kitchens, home theaters will soon become even more prevalent in luxury homes. When asked what luxury amenities they plan to buy, the top responses were home theaters (39 percent), boat docks (15 percent) and topiary/landscaping (13 percent). Already Have Plan to Buy Security System 85% 4% Gourmet/Designer Kitchen 77% 10% Topiary/landscaping 64% 13% Home Theater 46% 39% Hot Tub 41% 10% In-ground Pool 31% 11% Wine Cellar 26% 10% Heated Floors 17% 2% Boat Dock 13% 15% Resistance Pool 5% 2% Pizza Oven 6% 1% Tennis Court 4% 2% "Luxury homeowners are enjoying a lifestyle of leisure. The high-end features that are being added are some of the reasons we are seeing increased property values in certain high-end markets," said Gillespie. Luxury Homes: Add on or Move? Luxury homeowners are investing in more than just amenities. Over the next two to three years, more than one-third (35 percent) of luxury homeowners plan on adding on to or remodeling their property. Eight percent are planning to move to another luxury home, citing several reasons: relocating to another city (21 percent), upwardly mobile/enjoying greater success (21 percent), desire for a bigger home (17 percent) or retiring (13 percent). Second home and vacation home purchases are also high on the luxury homeowner's priority list. While 31 percent indicated that they already own a second property, an additional 15 percent plan to buy a second home in the next year or so. Top Luxury Purchases Luxury homeowners already own many lavish items, with luxury home decorations (76 percent) and luxury cars (72 percent) topping the list. Other popular possessions among luxury homeowners include: expensive jewelry (65 percent), high-end fragrances (43 percent), exclusive country club memberships (31 percent), boats (18 percent) and thoroughbred horses (five percent). Shopping for the Luxury Homeowner that has Everything When asked which luxury item was the most fun to shop for, the top three responses were a house (17 percent), a car (15 percent) and jewelry (11 percent). Respondents also said that they were "most satisfied" with their purchases of houses (26 percent), cars (26 percent) and furniture (7 percent). Regarding technology purchases, digital cameras were the most frequently purchased (72 percent), followed by plasma TV screens (46 percent), MP3 players (39 percent), WiFi laptops (37 percent), camera cell phones (34 percent) and Blackberry devices (33 percent). The survey also included the types of private clubs luxury homeowners belong to. Country clubs were the most popular (31 percent), followed by golf clubs (21 percent), tennis clubs (19 percent) and wine clubs (11 percent). Interest Rate Resistant America's luxury homeowners reported overwhelmingly (61 percent) that recent federal interest rate hikes have little affect on their luxury spending, while 35 percent indicated that rising rates would cause a "scale back" of luxury purchases. Only four percent of luxury homeowners said that they "will put all luxury purchases on hold" because of increasing rates. Luxury Homeowners: Creatures of Comfort Personal attention and recreation seem to be priorities with luxury homeowners. The Coldwell Banker(R) Luxury Index revealed that 64 percent of the million dollar homeowners who were surveyed have traveled to an international destination for pleasure over the last two years. How they travel is also noteworthy: Sixty-five percent have flown first class over that time period, while 30 percent have taken a cruise and another 18 percent have flown on a private jet. To take care of themselves, 76 percent of million dollar homeowners have visited a spa over the past couple of years, while nine percent have had elective cosmetic surgery. Are these million dollar homeowners living the good life? Yes. Only 11 percent of luxury homeowners defined their lifestyle as "modest and thrifty." Demographics of Study Respondents The majority (85 percent) of the Coldwell Banker(R) Luxury Index respondents reported an annual household income of $150,000 or more, and 50 percent of these respondents said their annual household income was $300,000 or more. The average size of households was four, and several age groups were represented: under 35 (13 percent), 35 to 44 (43 percent), 45 to 54 (26 percent), and 55 and over (18 percent). About Coldwell Banker(R) Since 1906, the Coldwell Banker(R) organization has been a premier provider of full-service real estate. In 2005, Franchise Times magazine's prestigious Top 200 issue ranked Coldwell Banker number one in real estate and number eight among all franchisors. Additionally, the Coldwell Banker organization received the "Highest Overall Satisfaction For First Time Home Buyers and Sellers Among National Full Service Real Estate Firms" from the J.D. Power and Associates 2003 Home Buyer/Seller Satisfaction Study(SM). The study was based on responses from 2,924 home buyers and sellers. The study was conducted for Cendant Corporation by J.D. Power and Associates. The Coldwell Banker system has more than 3,600 residential and commercial real estate offices and 117,000 Sales Associates in 28 countries and territories. Each office is independently owned and operated except for offices owned and operated by NRT Incorporated. The Coldwell Banker system is a leader in the industry in residential real estate, and in niche markets such as resort, new homes and luxury properties through its Coldwell Banker Previews International(R) division. It is a pioneer in consumer services with its Coldwell Banker Concierge(R) program and award-winning Web site, http://www.coldwellbanker.com. Coldwell Banker Mortgage is one of the largest telephone/web based lenders in the country and the Coldwell Banker Commercial(R) system is one of the largest commercial franchise operations with over 400 affiliates offering clients comprehensive buying, selling, leasing, acquisition, disposition and management services. Coldwell Banker Real Estate Corporation is a subsidiary of Cendant Corporation (NYSE: CD).
SOURCE Coldwell Banker