Luxury homes used to be the purview of the wealthy, the so-called 1 percent. In the last five years, an emerging client niche is not only expanding the pool of luxury buyers, but changing how we think about living in luxury. Luxurious lifestyles, unique opportunities, historic detail, stunning views, iconic locations and favorite pastimes are now fully in the consideration set of the “distinctive properties” client who sees the home as an integrated component of a luxurious lifestyle.

1. Redefining Luxury Sponsored by ERA Real Estate
Redefining Luxury
Sponsored by ERA Real Estate

2. Redefining Luxury Sponsored by ERA Real Estate
Redefining Luxury:
Lifestyle, Distinction and Destination
Luxury homes used to be the purview of the wealthy, the so-called 1 percent. In the last five years,
an emerging client niche is not only expanding the pool of luxury buyers, but changing how we
think about living in luxury.
As we emerge from the Great Recession, it is clear that the ultra-wealthy – those with more than
$30 million in net worth – continue to value real estate as an investment and remain an important
part of the luxury real estate client base. That base is expanding thanks to a Millennial mindset,
which values social interactions, a connected community and a focus on experience, along with an
increasing number of downsizing Baby Boomers which has resulted in an expanded definition of
luxury living. Price points are no longer the defining characteristic of high-end homes.
Luxurious lifestyles, unique opportunities, historic detail, stunning views, iconic locations and
favorite pastimes are now fully in the consideration set of the “distinctive properties” client who
sees the home as an integrated component of a luxurious lifestyle.

3. Redefining Luxury Sponsored by ERA Real Estate
Demographics and Economics
Expanding the definition of luxury real estate reflects a number of recent demographic and economic
shifts. In terms of economics, there is a growing segment of what global market research company Ipsos
calls “affluents” – people aged 18 and over living in a household with at least $100,000 in annual household
income. That segment is growing rapidly – in the past two years the share of American affluents has increased
6 percent. That translates into more potential clients. Indeed, in just four years, there has been a nearly
three-fold increase in affluents. In 2009, there were 23 million affluents, while in 2013, there were 62.5 million.
But we are not only seeing more people become affluent, they are also becoming more affluent. Compared
to 2012, affluents’ average income rose 4.6% to $200,200, and their net worth rose 2.0% to $1.01 million.
Using standard mortgage-to-income guidelines that recommend spending approximately one third of
monthly income on housing costs, households with incomes of $200,000 qualify for $1 million homes.
At $100,000 annual household income, $500,000 homes are within reach. Consumers’ perception of luxury
has altered as well. According to a recent Realtor.com survey, for much of the country, a luxury price point
begins at $500,000.
Most popular price points at which surveyed consumers stated that luxury housing begins,
by U.S. region:
• Northeast (ME, VT, NH, NY, NJ, MA, CT, RI, MD, DE, PA) $1 million +
• Pacific (CA, OR, WA, AK, HI) $1 million +
• Mountain (MT, ID, WY, CO, UT, NV, AZ, NM) $1 million +
• South Central (AL, MS, TN, AR, LA, TX, OK) $500,000 +
• North Central (KY, OH, IN, IL, MI, WI, MN, IA, NE, KS, ND, SD) $500,000 +
• South Atlantic (VA, WV, NC, SC, GA, FL) $500,000 +

4. Redefining Luxury Sponsored by ERA Real Estate
Limited Supply
Traditionally, luxury homes comprise approximately the top 5% of any market, based solely on price point.
According to the Institute for Luxury Home Marketing, there were about 23,000 homes for sale at $500,000
and above in the spring of 2014, a similar amount compared to 2013.
Market trends over the last year indicate an increasing number of sales of homes priced $1 million and above.
According to NAR, year-over-year sales in October of 2013 were 31% higher, representing 8,900 units. The
gain was higher in September of 2013 as sales in that price category climbed nearly 40% to 9,000 units from
September of 2012.
Clearly, as the number of affluents interested in real estate increases, they face a limited supply of inventory.
Expanding the definition of luxury homes to move beyond price point and include other characteristics that
reflect a luxurious lifestyle allows the industry to supply inventory for this segment, provided the properties are
marketed appropriately. Price may not be the primary attribute, but the homes must still reflect a distinctive
quality that is related to location, lifestyle or leisure.
The Psychology of Luxury
As attitudes and thresholds about income, relative wealth and luxury have evolved, so has the high-end real
estate consumer. Two of today’s largest demographic segments seem to be influencing some of these shifts.
Market research firm Nielsen recently released a report titled “Millenials: Breaking the Myths.” that identifies some
characteristics of Millennials that may come to bear.
How do these characteristics play out in housing preferences? Affluent Millennials will favor communities over
privacy and desire homes that are both conducive to entertaining and feature flexible living spaces that can
accommodate the integration of everyday living for all members of the household.
Another important demographic segment that is influencing the shifts in luxury real estate is Baby Boomers,
many of whom will be retiring in the coming years. They will likely want to maintain a high-end home, but on a
smaller scale. Downsizing affords the opportunity to live closer to a desired lifestyle: golf, mountains, beach, city
offerings, where price points may be high, but a smaller footprint will be more economical to maintain.
83%LIFESTYLE
17%STATUSSYMBOL
Among their key findings, Millennials are...
• Diverse, Expressive and Optimistic
• Driving a Social Movement Back to
the Cities
• Struggling, But They Have an
Entrepreneurial Spirit
• Deal Shoppers and Desire Authenticity
• Connected and Want the Personal Touch
PREFERENCETHATAHOMEREFLECTS

5. Redefining Luxury Sponsored by ERA Real Estate
Serving the Distinctive Properties Client
ERA Real Estate’s Distinctive Properties program tailors to this emerging clientele comprised of up-and-coming
Millennials and ready-to-retire Baby Boomers and speaks to their changing attitudes and preferences. A recent
ERA Real Estate survey of sales professionals serving the high-end segment further explores this evolution.
Size Doesn’t Matter (As Much)
In line with a general trend towards smaller homes, as reported by the NAHB, high-end clients aren’t necessarily
looking for bigger, just better. Better can include smart technology, energy efficient features and proximity to
desired geographic locations like the beach, the mountains or the city.
Open Floor Plans
With less of a focus on square footage comes a corresponding decrease in the importance of the number of
rooms. Two decades ago, compartmentalized spaces with specific purposes were popular. Today, open floor
plans allow for increased interaction among family members, increased views and more natural light to
permeate the home, giving the illusion of more space by reducing the number of confined areas. In addition,
open floor plans encourage the integration of everyday living.
Preferred Amenities Reflect Changing Priorities
The most desired amenity for luxury clients is a high-end kitchen. As the heart of the home, kitchens have evolved
from back of the house, utilitarian rooms to expansive, integrated spaces that can accommodate cooking,
entertaining and homework. This heavily weighed preference reflects the lifestyle and attitudes of both Millennials
and Baby Boomers. Millennials value social interactions and the creation of communities, making these expanded
kitchen spaces the perfect backdrop to cook a meal with friends, host a cocktail party or neighborhood gathering.
Baby Boomers, many of whom are retiring, now have time to entertain and develop new culinary hobbies.
Location
Real estate is local and by extension luxury is local as well. According to the Institute for Luxury Home
Marketing, the luxury price point in Cleveland is $500,000 while in New York City and San Francisco, that
number leaps to $4 million. But today’s distinctive properties client is looking beyond zip code.
An analysis of search behaviors of visitors to ERA Real Estate’s luxury property website reveals that
consumer preferences are changing. ZIP codes are no longer the primary search term. Instead, visitors are
increasingly interested in finding a home based on attributes, such as riverfront, golf community or equestrian.
This shift reflects insights from ERA Real Estate’s survey that indicate brand names are not as important as
craftsmanship when it comes to possessions and amenities. Applying this attitude shift to a home’s location,
it appears that affluent home buyers are increasingly open to “under the radar” locations that offer desired
amenities without ZIP code mark up.
BRANDS/LABEL
CRAFTSMANSHIP
25%
77%
18%26% 7%9%23%
HIGH-END KITCHEN
POOL HOME THEATER WINE CELLAR DOCKSOLAR PANELS/
ENERGY EFFICIENT FEATURES
OPEN FLOOR PLAN OVERSIZED GARAGE OUTDOOR KITCHENLOCATION
(ie. close to beach,mountains)
OTHER: 6%
37%64% 50% 28%41%WHATTYPESOF
AMENITIESARE
IMPORTANTTOTHE
DISTINCTIVEPROPERTIES
CLIENT?

6. Redefining Luxury Sponsored by ERA Real Estate
7 Under the Radar
Luxury Locations
Seafarers and Nature Enthusiasts: Explore Rockland, Maine
A quick flight from Boston, Mass. and drivable from New York City,
Rockland, Maine offers that comfortable New England vibe, including
14 local lighthouses and numerous maritime activities, similar to
Martha’s Vineyard, Mass. Waterfront homes, riverfront condos and
island living are all available here.
Lake Lovers: Try Door County, Wis.
Wisconsin’s Door County offers five state parks, 11 lighthouses and
300 miles of shoreline extending into Lake Michigan. Lake lovers can
stroll along the water’s edge or explore one of 13 islands for an
experience reminiscent of Lake Minnetonka, Minn. The Door County
market is comprised of various real estate options from hotel-style
condos to spectacular waterfront properties.
Outdoor Adventurers and History Buffs: Check out Sheridan, Wyo.
Midway between Yellowstone National Park and Mount Rushmore sits
Sheridan, Wyo., home to Buffalo Bill and Little Bighorn Battlefield.
Named a “Top Place to Live in the West“ by American Cowboy
magazine, Sheridan is affordable and offers many of the highly-
prized amenities of Jackson Hole, Wyo.
Wine Connoisseurs: Sample Chautauqua Lake, N.Y.
Wine lovers, foodies and families will love Chautauqua Lake, N.Y.
Known as the world’s oldest and largest Concord grape growing
region, lakeside and vineyard-side properties offer proximity to
22 wineries along the area’s wine trail.
Florida’s Fantasy Island: Sarasota, Fla.
Sarasota, Fla., a great metro area surrounded by the Gulf of Mexico
and several barrier islands, includes the white sands of famed Siesta
Key Beach. Perfect for surfing, shopping, sun worshipping, sightseeing
and boating, the area is replete with a variety of waterfront and
island properties.
The South’s River Walk: San Antonio, Texas
One of the fastest growing cities in the United States, San Antonio
is famous for the Battle of the Alamo and its River Walk – a two and
a half mile cobblestone path along the San Antonio River lined with
unique shops, outdoor and fine dining and a sophisticated nightlife.
Just as in Paris, one can roam along the river, visit galleries, historic
cathedrals and well-kept parks, then dine in splendor.
The Alps of America
Alpinists rejoice! Here in the United States the quiet city of
Sandy, Utah, a Salt Lake City suburb, is etched into a picturesque
and adrenaline-pumping landscape without a high altitude plane
ride and features breathtaking scenery, a challenging terrain for
mountaineers and 42 feet of powder a year.

7. Redefining Luxury Sponsored by ERA Real Estate
More than 80 percent of ERA Real Estate agents serving high-end clients reported that their clients prefer
experiences over possessions. Research demonstrates that experiential purchases, rather than material purchases,
result in increased well-being because they provide connectedness and vitality. This is clearly reflected in the
types of amenities distinctive properties clients desire, specifically chef’s kitchens, outdoor kitchens and open
floor plans, all of which promote social interactions and connection to nature and the environment.
In thinking about well-being as it relates to the home, an interesting underlying psychological component of
the human hierarchy of needs emerges. According to famed psychologist Abraham Maslow, shelter and food
are basic needs, with social connections and self-actualization higher order needs.
While Maslow’s theory of psychological health postulated that people satisfied their needs in a specific order,
the expanded definition of luxury living and the amenities and attributes that are becoming more important
mean that multiple needs can be addressed simultaneously. With high-end-kitchens, open living spaces and
proximity to geographic attractions, this new class of distinctive properties satisfies ascending needs
seamlessly, resulting in a blurring of possession and experience.
77%EXPERIENCES
WHICH
DO THEY
PREFER?
23%POSSESSIONS
Cultivating a Luxurious Life
you are also acquiring a lifestyle that you consider luxurious because it
not only complements the life you lead, it creates the opportunity for
you to experience a fulfilling, self-actualized life. As the psychology of
luxury living evolves, it becomes clear that homes are no longer static
status symbols, they are dynamic stages for living.
WHENYOU
PURCHASEA
DISTINCTIVEHOME…

8. Redefining Luxury
What’s New with ERA Distinctive Properties?
In order to reach a growing segment of affluent home buyers with distinct preferences and
attitudes about luxury living, ERA Real Estate recently unveiled an expanded luxury platform
with a number of unique features.
• Expanded Criteria – From location to lifestyle, historic detail to high-end amenities,
ERA Distinctive Properties reflect more than a price tag.
• Attribute Search – A suggested search capability tailored for luxury clients quickly
directs visitors to properties they are interested in.
• Curated Listings – Properties priced under the traditional luxury threshold are
carefully evaluated to be inclusive as well as distinctive.
• Virtual Staging Tool – If distinctive properties are dynamic stages for living, wouldn’t it
be great to change the scenery, room by room? This interactive tool allows clients the
opportunity to design rooms to their liking as they imagine living in a potential home.
• Specialized Marketing – Relationships with luxury and location experts provide
access to an expanded clientele for sellers and buyers.