SOURCE: Luxury Institute

April 17, 2008 11:00 ET

Luxury Institute WealthSurvey Finds Most Wealthy Americans Staying Away From Real Estate Purchases in 2008

NEW YORK, NY--(Marketwire - April 17, 2008) - Despite low interest rates and an abundance of available properties, 76 percent of wealthy Americans say they will not add to their real estate holdings this year, according to 800 Americans with an average income of $287,000 and net-worth of $2.9 million surveyed by the Luxury Institute (www.LuxuryInstitute.com).

A belief that the decline in prices has yet to bottom (27 percent); a desire to keep investments liquid (25 percent); and uncertainty about the direction of the economy (24 percent) are key reasons for sitting out the market.

Of potential buyers, half cite the investment attractiveness; 29 percent will buy a residential investment property. More than one in four (28 percent) buyers are in the market for a vacation home; 18 percent will require their new homes to be "eco-friendly."

More than one-fifth (22 percent) of wealthy buyers will spend $1 million or more on their next purchase, 11 percent will spend more than $2 million. However, the most active segment of the market should be homes between $250,000 and $499,999. Younger wealthy men are especially likely to be in the market.

Real estate accounts for 35 percent of the total assets, on average, of wealthy individuals -- greater than the combined value of stocks, mutual funds and hedge funds. Fifty-one percent of wealthy homeowners own at least two properties; almost two thirds (63 percent) of individuals earning more than $300,000 and 74 percent of penta-millionaires, own more than one property.

"Wealthy individuals are known for their financial savvy and sense of timing," says Milton Pedraza, CEO of the Luxury Institute. "What these results tell us is that even though home prices may be lower than they were last year, they could go lower still. I'd look for a little more confidence out of this group before we can expect a turnaround in earnest."

Additional topics covered in the survey:

   -- Essential Property Features
   -- Use of Realtors
   -- Real Estate Listings Websites

About the Luxury Institute

The Luxury Institute is the uniquely independent and impartial ratings, research and executive education institution that is the trusted and respected voice of the high net-worth consumer. The Institute provides a portfolio of proprietary publications, research and courses that guides and educates high net-worth individuals and the companies that cater to them on leading edge trends, high net-worth consumer rankings and ratings of luxury brands, and best practices. The Luxury Institute also operates the Luxury Board (www.LuxuryBoard.com), the world's first global, membership-based online community for luxury goods and services executives, professionals and entrepreneurs. To reach the Luxury Institute, please call 646-792-2669 or go to www.LuxuryInstitute.com.

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