Luxury Connect panelists said that a generational wealth transfer is lifting more millennials into the luxury real estate market, and it’s already changing how luxury brokerages are working to attract clients.
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Evolving buyer profiles and advancements in tech are creating substantial opportunities for luxury brokerage operations, a panel of experts argued at the Inman Luxury Connect real estate conference Monday in Las Vegas. And while some luxury clients still prefer to keep a low profile, more clients than ever are coming from a generation of clients who grew up familiar with social media and are excited to see their listings featured in prominent, glitzy social media campaigns.
The luxury real estate sector is increasingly bringing high-dollar millennial buyers into the fold, and agents are making meaningful inroads with these clients by crafting high-end social media experiences.
However, this more tech-centric focus isn’t only about attracting a new generation of clients. Luxury agents and brokers are also taking advantage of generative AI and other advanced computing tools to streamline their operations, target consumers with ads and hone messaging in record time.
“We have to keep in mind that the transfer of wealth is going to the millennials — it’s going to the next generation,” Quiana Watson of Watson Realty Co. in Atlanta said. “And when you look at how they want to be treated and how they interact on social media, it is a big deal. So we can no longer operate real estate the way we used to.”
The transfer of wealth is likely to be staggering by some estimates, launching many younger adults into the thick of the luxury market who have not participated before.
Ranjeet Guptara, financial advisor at UBS | Photo by AJ Canaria Creative Services
UBS financial advisor Ranjeet Guptara told the audience of luxury real estate professionals that adults over the age of 75 control about a quarter of the nation’s wealth. As a result, it’s expected that $87 trillion of wealth will pass to younger generations in the next 10-20 years, Guptara said.
Some of the early effects of this transfer are already leaving a mark on luxury agents and brokers like Watson, Dawn McKenna of Coldwell Banker, Paul Benson of Engel & Völkers and Bryce Pennel of Douglas Elliman, who shared their on-the-ground experience with Inman Luxury Connect attendees.
The increasing benefits of reaching potential buyers and clients on social media come at a welcome moment when luxury brokerages can benefit from focusing more on marketing and less on lead generation, Benson said.
“I’m not a big fan of lead generation,” Benson said, “but I am a big fan of getting that home in front of the right people, wherever that is. And yes, you have to spend a lot of money to do it. But you also have to communicate that you’re doing it.
“So that’s where Instagram, I think, and other social media channels, come in to really make sure the client knows what you’re doing.”
Watson said she has folded her firm’s social media promotional muscle into her pitches to potential clients — something that younger clients in particular have been receptive to.
“I show them those markers of how my clients come back, the equity they’ve appreciated and how they’re able to continue on, but they’re going to have that social media experience,” she said.
Newer tech features — from ChatGPT to back-end AI solutions — have allowed Watson to save updating templates, reduce expenses managing her database and improve how she is able to reach potential clients with targeted ads, she said.
All that is being embraced by others in the industry, Benson said. However, they are not yet a substitute for good, old-fashioned communication with potential clients, he cautioned.
“The CRMs, the AI, the ability to do the virtual staging, ChatGPT not just for descriptions but for business plans — that’s all great,” Benson said. “But the telephone. I don’t think there’s been a time since I’ve done this in 20 years that clients had more questions about our industry.”
McKenna said she is spending hundreds of thousands of dollars on new tech lately. But like Benson, she’s continued to have success through old-school techniques as well, such as holding curated events at a luxury listing that help expand her database.
“It has really proved to be very fruitful in terms of results,” McKenna said of these event efforts.
And even in this age of social media — which Pennel said he has leaned into — much of his L.A. luxury business still comes from referrals. Relationships remain key to success at every level of real estate, he said.