Affluent See Buying Opportunities

One bright spot in the housing market is affluent investors. They see bargains and are ready to buy.

According to a recent survey, 77% of the wealthiest Americans — those with annual discretionary incomes in excess of $500,000 — see a “real opportunity” in the housing market, according to a recent study published jointly by American Express Publishing Corporation and the Harrison Group, a market research and consulting firm.

It’s not just the wealthy who are bullish on real estate. Among those defined as upper middle class, with incomes between $100,000 and $150,000, 67% agreed the U.S. real estate market represents a buying opportunity. Among the affluent with incomes between $150,000 and $249,000 and the super affluent with incomes between $250,000 and $499,000, 72% see a buying opportunity.

The wealthiest are committed to buying soon, with 40% saying they are in the market to purchase real estate this year. Among the upper middle class, that number dropped to 17%, whereas 24% of the affluent and 26% of the super affluent were planning to purchase this year.

The bulk of these purchases will be second homes. Among the wealthiest survey participants, 33% said they were currently in the market for a second home and 25% said they were looking for a third home.

A separate survey found that wealthy Americans purchasing multi-million dollar homes typically put a down payment of 20% to 30%, and 25% put down 30% to 50% of the sale price.

by Zach Larachuito
Senior Loan Officer

Indy Mac Bank