According to a recent Coldwell Banker Previews International Study, younger baby boomers who work for a corporation, many of whom have household incomes less than $500,000, make up the majority of people living in the country’s million dollar homes. These homeowners are not living an “ultra-lavish lifestyle,” characterized by amenities that might include heated floors, oversized Jacuzzi tubs, extravagant home theaters, and tennis courts.

Many people believe that the only people buying and selling luxury homes here are entertainers, professional athletes and celebrities. In reality, the million-dollar homeowner lifestyle is not what you see on television. Of the people who live in these types of homes, only about 5% have a personal assistant, 4% have a live-in housekeeper, and 1% have a driver.

On the other had, 35% of those surveyed stated that they owned second homes, and another 35% are considering buying a second residence. Regardless of the market, people in this class seem to have a thing for owning real estate, and that’s not likely to change anytime soon, even with rising interest rates.

In fact, the study found that 70% of those interviewed said they won’t change their planned luxury purchases if rates keep rising. "The nice thing about real estate is you can buy it for an investment or buy it to enjoy it — but it's still an investment," says Thomas Majors, during a recent phone interview from his home near downtown Atlanta.  “Real estate also offers "tax write-offs you can't get if you invest in stocks or bonds," he added.

Forty-one percent of luxury homeowners surveyed earned between $200,000 and $500,000 per year, and 19 percent said the majority of their retirement holdings were in real estate, according to the report. The respondents all had primary residences valued at more than $1 million.

Respondents who lived in California had homes valued at over $2 million. According to the First Republic Bank's Prestige Home Index survey, the average luxury home in Los Angeles was $2.29 million in the first quarter of 2006, the average luxury home in San Diego was $2.1 million, and the average luxury home in San Francisco was $2.92 million. Here in Atlanta, the average price of a luxury home is around $1.2 - $2 million. However, because of the much lower cost of living here compared to western states, luxury homebuyers can get a much larger house for less money in Atlanta than they could in other places.

Looking like a million Popular features of homes in the survey were designer kitchens, found in 65 percent of the residences, and original artwork, which 54 percent of respondents owned or planned to buy. Wine cellars are in or may soon be installed in 37 percent of the homes, and 89 percent have home entertainment rooms that can easily accommodate more than six people. Other popular features included:

• Security systems, in 86 percent of homes

• Professional landscaping, in 67 percent of homes

• Wet bar, in 57 percent of homes

• Movie-theater-style seating in entertainment rooms, in 24 percent of homes

• In-ground swimming pool, in 37 percent of homes
• Hot tub, in 35 percent of homes

More than half of second homes were in recreation locations, with 32 percent on the beach or oceanfront, 11 percent on the lakefront and 11 percent in ski resorts or mountain areas.

But many of these homeowners don't plan on retiring to their second homes in the near future: 32 percent don't plan to retire until they are 65 or older, and 14 percent plan on retiring between the ages of 60 and 64. When they do retire, 42 percent plan on traveling domestically and 46 percent plan on traveling internationally.

Luxury Homeowners:
Where Do They Keep Their Retirement Holdings

Malik Watson is a Realtor in Atlanta, GA. He also writes and publishes numerous articles annually on the Atlanta real estate market for the general public. With over 6 years experience working with everyone from first-time home buyers to seasoned sellers and investors, he can assist you with all your real estate needs in all 14 counties of metro Atlanta. No matter if you’re looking for a house, loft, condo, or townhome…from $100,000 to over $1 million and beyond, the Watson Team specializes in “Getting Results That Move You”. Feel free to contact us at anytime for additional information.