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Bradley Nelson, Sotheby's International Realty CMO, joins Yahoo Finance to discuss Sotheby’s International Realty’s most recent Luxury Outlook report and the shift in young people moving to golf communities.
KRISTIN MYERS: The latest luxury outlook report from Sotheby's International Realty is here with some surprising details. We're joined now by Bradley Nelson Sotheby's International Realty Chief Marketing Officer. So, Bradley, I first want to just start with the pandemic and its effects that have been had on the luxury real estate market. What have you seen happen over the last year?
BRADLEY NELSON: Well, Kristin, thanks for having us. The pandemic has certainly had a significant impact on the luxury housing market, really creating a level of demand that we have not seen in many years. This has really been driven by the fact that our homes have played double or triple duty in our lives during the pandemic as they became places where we're working, places where families are educating children, and in general where we're spending so much time. And as a result of that, clients, particularly those with the capability to work remotely, have driven to finding larger homes and also homes that have greater access to outdoor space.
KRISTIN MYERS: Yeah, absolutely. I think anyone that lives in New York knows the struggle of being stuck in quite a small apartment day in and day out while you are working from home. Now, Bradley, I think when most people think of the luxury real estate market, some of these dream homes, we start to think of folks that are just a little bit older. I'm curious to know if there was any shifts at all, at least in the ages of people that you are seeing purchase some of these essentially higher ticket homes.
BRADLEY NELSON: Absolutely. I think that many in the housing industry have been wondering when the millennial generation was going to step into the housing market and the luxury sector in earnest. And 2020 and into 2021 is definitely when we're seeing that show up. I think it's a convergence of many factors-- first and foremost, millennials are really beginning to enter their prime income earning years as they advance in their careers.
And then secondarily, we have the greatest wealth transfer in the history of the world taking place right now as well. The "Wall Street Journal" recently reported that $35 trillion has been saved by prior generations, and millennials are just now beginning to inherit that, which is changing their purchasing capability. We're starting to see them be interested in different types of communities, particularly those that are highly amenitized. So you can think of traditional golf course communities, et cetera. Those have been interestingly attractive to this next generation of buyers.
KRISTIN MYERS: I'm very glad you mentioned that, because that was one of the surprising tidbits I think from the survey and from the study-- that folks my age are moving into communities that I think we more associate with folks of the retirement age. Is it the amenities that have made it so attractive to some of those millennial buyers?
BRADLEY NELSON: I really do think so. So like us if you live in New York City, you're accustomed to living in a building that might have a lot of amenities and services. And the concept to moving to a suburban environment where all of the responsibility of maintenance is on your own, some of these golf course communities, other amenitized neighborhoods, they really offer some of those similar services. They also offer a sense of community. And I think as we're coming out of a season where many of us, perhaps, spent more time alone than we're accustomed to, perhaps that built in sense of community as you're moving into a new part of the country or a new area might be really attractive as well.
KRISTIN MYERS: I want to ask you, however, especially, you know, I'm here in New York, and I think that we've all heard that New York is back. It was never going out of style. Are you seeing some folks moving back to the cities and back to urban areas? And if so, what are the kind of properties that they're looking at in the cities?
BRADLEY NELSON: So absolutely. For those of us who are New Yorkers, there was a great expression trending on social media-- New York or nowhere. And I think it really captures the spirit of what this place is and how resilient not only New York, but lots of cities are. And obviously, we've seen massive population migration to higher density locations for many years.
We think that buying in New York over the last decade is going to have proven to be-- or over the last year-- will prove to be a very smart decision as we begin to see buyers come back to the market. I don't know that the trends that you're seeing elsewhere in the country and the world are any different here in New York City. So I do believe that clients are looking for larger apartments so that if they are spending more time working from home, they have a dedicated space to do that.
I also believe that we're looking for places that are in closer proximity to our work. So instead of living and working in two different neighborhoods, we're seeing clients really look for properties that are within walking distance of either their children's school or their employment.
KRISTIN MYERS: And I want to just very quickly ask you, Bradley, before we go how long you think some of these trends are going to really last, now that we are trying to see the other side of the pandemic, folks are returning back to the office.
BRADLEY NELSON: So I believe that clients are going to return back to major cities. I think if you purchased a home in Colorado, for example, and have been living there, you're now being called back to work, it might make a great deal of sense for you to keep that property, to use it as a vacation rental investment, whether that's Airbnb, VRBO, et cetera. I think the one trend that's really here to stay, though, is actually how we shop for a home.
And at the height of the pandemic, we were introduced to so many new technologies, whether that was virtual reality video tours. And they have proven to be a more efficient way for buyers to look at homes, instead of running around to 25 open houses every weekend. And I believe that some of these digital technologies to help buyers narrow down their list and focus on which home is right for them is really here to stay. And as a result of that, if you're selling a property, as you look for your next one I think it's really important to ask your broker or your agent how they're taking advantage of those convenience factors that's going to make your property accessible and attractive.
KRISTIN MYERS: All right, we'll have to leave that there. Thanks so much, Bradley Nelson, Sotheby's International Realty Chief Marketing Officer.