Just as technology is one of the single biggest driving forces of today’s robust economy, it is also driving--and changing--today’s luxury home market. The typical custom home buyers used to be those in their 50s and 60s who were nearing or entering retirement. With the proliferation of Internet companies and bullish tech stocks, however, there are more young millionaires than ever looking to spend their money on elaborate custom homes.
Tim and Nancy Hild, owners of Tandem, Inc. in Telluride, Colo., have seen their buyer profiles change dramatically over the last several months.
"There are a lot of Internet players coming into this area and buying up property to build their luxury homes," says Tim Hild. "Many of our customers are CEOs of these start-up companies who are in their 30s and 40s."
Mark Wilson, president of London Bay Homes in Naples, Fla. echoes that statement. Even in the long-established Florida luxury market, buyers are getting younger and younger. "Historically, our market was that of the 55 and over crowd--the retiring CEOs of large businesses," says Wilson. "But now we have a lot of young buyers with humongous amounts of money."
High-End Means High-Tech
Because so many custom home buyers are coming from the technology arena, it is no surprise that they are demanding cutting-edge technology in their homes. Beyond the RG6 and Category 5 wiring which are becoming standard nationwide, high-end buyers are more knowledgeable about exactly what gadgets they want installed in their homes.
"Technology is huge in this market," says Gary Sorcic, who with his wife, Becky, runs Gary Sorcic Construction in Weyauwega, Wisc. "These people are very familiar with today’s technology. They know what is required and they are demanding it in their homes."
Wilson says that while technology has always been an important part of his buyers’ preferences, he has noticed a dramatic increase in the level of importance. In addition to building some home theaters that range from $150,000 to $500,000, whole-house systems run with touch pads are becoming the norm.
"The audio/visual, electricity and lighting controls, exterior and landscape lighting now account for ten to eleven percent of our homes’ budget. Five years ago it was half that," says Wilson.
In some markets, such as the mountains of Colorado, it can be difficult for builders to provide these high-tech systems because of the lag in community infrastructure. In Telluride, for instance, the Hilds note that fiber-optic cable has not yet been made accessible for all areas in which they build.
The rapid advancement of technology can present problems for builders in other ways. The proliferation of web sites devoted to building products and technologies has created buyers who are so informed that they severely push builders to keep up.
Sorcic has also encountered customers who come in to his office armed with more product information than he has at his own fingertips. He not only finds it difficult to keep up with the latest and greatest, but he also has to explain why he is not the cheapest.
"Buyers have a lot of time to browse the Internet and price products, which can present a definite challenge" says Sorcic. "People sometimes question price differential, but once I explain that what they’ve found on the ‘net is a wholesale price, and I mark-up for my expertise and service, they are generally very understanding."
Wilson agrees that buyers are better informed, but says they are not pushing his business in terms of product selection. "We’ve always been a leader in design and materials selection in this market, and we’re still driving the styles," says Wilson.
More Money Earned, More Money Spent
With the nationwide increase in disposable income, there has been a corresponding increase in the level of detail and architectural finish in luxury homes. Wilson says the homes he’s building, and homes nationwide for that matter, are getting bigger and much more ornate inside and out.
"I think we’re entering another golden era of housing reminiscent of the Vanderbilts and the railroad barons of the early 1900s," says Wilson. "They may not be on the same scale as back then, but we are definitely seeing large estate homes that haven’t been built for decades."
All builders agreed that two of the more important areas of these homes in terms of budget and time spent on design are the kitchen and master bath areas. Sorcic says his clients are concentrating a lot more money on these areas, even moreso than the common areas of the home.
"People are spending a lot more time in their bathrooms, so they want privacy, luxury and convenience. The kitchen has become the family gathering area, so buyers want convenience, room and functionality in addition to all the bells and whistles," says Sorcic.
Decorative accents such as hand-carved hardwood columns, true furniture-grade millwork and imported tiles and stonework are coming into vogue more and more. Bathrooms are featuring huge showers with benches, multiple showerheads and steam baths, while whirlpool tubs and his-and-her vanities are standard amenities now.
"Owners are looking for their own little vacation spot within the house, and the master bath is it," says Nancy Hild.
The owners of Sterner’s house enjoy cooking and entertaining friends quite often. To allow everyone to enjoy conversation and company while the meals are prepared, Sterner zoned the kitchen into different social spaces.
"The main cooking area is large and convenient, and the second island serves as a gathering area for guests to sit and enjoy cocktails or help with the cooking," says Sterner.
He adds that several different kinds of lighting are necessary in areas such as this. In addition to task lighting, he also included carefully placed general, decorative and mood lighting. Other hot-button items in today’s custom kitchens are built-in bun warming drawers, wine refrigerators appliances such as trash compactors. Large pantries and a lot of shelving space are also in high demand.
"Although many customers don’t use the kitchen themselves, they still want the area to make a big impression while maintaining ease of function because most do a lot of entertaining," says Sorcic.
Personal Touch
While the preferences and demands of today’s luxury home buyers may be evolving and changing, the way in which these builders work with them has not. Every one of them stated that the most important aspect in bringing their customers’ dream homes to reality is personal service.
"Because we are so remote and our customers are often thousands of miles away as we build their homes, we want them to be comfortable in the fact that we are here working hard for them," says Tim Hild. "We really market that aspect of our business."
Wilson’s methods are a bit different, but his philosophy is the same. He brings in a team of architects, interior architects, interior designers, landscape architects, lighting designers and audio/visual specialists to work with the clients to provide them with exactly what they want.
"We have the clients tell us how they live, explain the rooms they want and tell us about their family and then we work out a program that works for them," says Wilson. Sterner says that he is very selective about his clientele, trying very hard to ensure that he works with people with whom he has a strong chemistry.
"My approach is to get to know the client, understand the essence of what the family needs and wants and then try to pair that with what I like to do," says Sterner.
Sorcic says he could easily triple his output, but he chooses not to because he would lose that personal interaction.
"No matter how educated buyers are about product and trends, many still don’t understand how the homes go together," says Sorcic. "They know what they want, but it is our job as builders and architects to help them realize it."
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