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Behind 2021’s Wealth and Real Estate Boom

Today, nearly three times as many individuals with a $5 million+ net worth own $1–$5 million in real estate, compared to the numbers in 2019 — a 180% increase in luxury property ownership. This equals 71% of individuals with a net worth of $5+ million now owning properties valued in the $1–$5 million range. A new 2021 report by the Coldwell Banker Global Luxury® program examines this unprecedented growth closely using data from WealthEngine, Wealth-X and The Institute for Luxury Home Marketing.

Here’s a brief look at what’s behind the historic rise of real estate wealth from 2019 to 2021:

1. Wealth has grown both globally and domestically since 2019.

In the United States, the population of individuals with a net worth of over $5 million increased by more than 17% from 2019 to 2021, and their representative dollar volume increased at a similar rate.

Population by wealth tier

2. Real estate wealth is also surging along with it.

Real estate and wealth often go hand-in-hand, and the past few years have been no exception. In 2021, the dollar volume of wealth allocated to real estate rose to $3.6 trillion — up from $3.3 trillion in 2020, which was up from the previous year.

Screen Shot real estate ownership growth

3. Luxury sales in 2021 are outpacing 2020.

The volume of luxury homes sold in 2021 has surged to record levels so far — exceeding the record 2020 numbers in many cases. Unprecedented demand has depleted inventory and put upward pressure on home prices in the top 10% of the market. Certain luxury price segments saw double- and triple-digit percentage gains in 2021 sales, with the $1–$5 million range seeing the highest growth in the number of properties sold.

market Screen Shot

4. Why was there so much expansion in the luxury real estate space in 2021?

Cryptocurrency gains, rising stock markets and 401(k)s have combined with soaring home prices and low-interest rates, allowing consumers to borrow and save more while reinvesting cash. This new wealth allowed affluent individuals to buy more expensive homes — and more of them. People also continue to make life-changing moves, choosing to live out their values or embrace a FOMO-meets-YOLO mindset following the pandemic.

power players screen shot5. Rising real estate footprint creates a new group of Power Players.

Of the $3.6 trillion in real estate wealth in 2021, about 47% of people have a net worth of $5–$10 million; this represents a 33% investment in real estate from their asset portfolio and $1.7 trillion in real estate wealth. These individuals are the new real estate Power Players to watch, due to their outsized influence on the luxury real estate market — specifically in the $1–$5 million range. Among those making the biggest splash in the market right now: Second Homeowners, Baby Boomers, Urban Repatriates and Golden Millennials.

For the inside scoop on these trends and what’s driving Power Players in markets across the country, read the complete 2021 report, “A Look at Wealth: Real Estate’s New Power Players.”

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