Document Purpose & Study Background:

This document is the Executive Summary of the 2007 WineTrend-Unique Homes U.S. Luxury Home Market Study.

WineTrend and Unique Homes sponsored this research project. The Southeastern Institution of Research, Inc., a 43-year-old, national research company headquartered in Richmond, Virginia, was contracted to conduct the study. The study's primary purpose was to identify the latest trends in the U.S. luxury home market tastes and amenities (e.g., wine cellars, cheese caves, indoor gardens, media rooms, etc.). For purposes of this study, the luxury home market was based on "luxury homes or condominiums" defined as a home with a listing price of more than $2 million.

The universe of the upscale luxury home market was Unique Homes Magazine subscriber list. Unique Homes, a 36-year-old luxury real estate magazine available on newsstands and by subscription, offers an upscale worldwide readership. Through its Web site (www.uniquehomes.com) and bi-monthly four-color magazine, Unique Homes profiles the most exclusive homes available in the U.S. and around the world and introduces upscale home shoppers to the real estate professionals who list and sell them. Unique Homes' subscribers list includes consumers, realtors, designers, etc., the people that create and follow the latest trends in U.S. luxury home market.

Study Objectives:

The marketing research objectives of 2007 WineTrend-Unique Homes U.S. Luxury Home Market Study include:

• Identify latest trends in U.S. luxury home market amenities.
• Identify psychology of luxury homeownership - profile the benefits of luxury home ownership.
• Understand driving factors in luxury home purchase decisions.
• Assess location and structural preferences for U.S. luxury homes.
• Understand the appeal of custom-designed wine amenities in primary residence and second/vacation homes.
• Assess awareness, familiarity, and use of custom-designed wine amenities.
• Assess the likes and dislikes of custom-designed wine amenities among current users and recommenders.
  

Study Methodology

The Southeastern Institute of Research, Inc., a full-service marketing research firm, conducted this U.S. Luxury Home Market Study. SIR designed a 12-minute online survey. The survey was conducted using SIR InterFeedback^SM online survey software.

Several invitations to participate in the survey were sent to Unique Homes’ subscriber list: consumers, realtors, designers, etc. This included an initial email blast to all know Unique Homes’ subscriber email addresses, a letter invitation mail-out that included an online survey address, and a flyer insert in Unique Homes’ polybags – the January 2007 issue. Several incentives were offered for participation, including a prize drawing for an overnight stay and dinner for two at the Inn at Little Washington, including airfare.

The study fieldwork was conducted through fall 2006 and culminated in mid-January 2007.

Four hundred and seven (407) people participated in the survey, including more than one hundred luxury homeowners and more than 300 realtors (some of whom were luxury homeowners, too). Half of the luxury home realtors have sold more than five luxury homes in the past year.

Key Findings

Selected key findings from this study include:

• In the luxury home market, location, lifestyle, and upscale amenities are the three most important attributes when considering the purchase of a luxury home. 96% said location is important and 91% said lifestyle is important. 90% gave upscale amenities like wine rooms a “4” or “5” on a scale of “1” to “5” with “5” meaning “very important.”
  
  Compared to five years ago, these three attributes have gained in importance. On a scale of “1” to “5” with “1” meaning “more important 5 years ago” and “5” meaning “more important now(today),” the mean score for both upscale amenities and location was 4.1; the mean for lifestyle was 3.8, all three higher than “3” which would have denoted neither more nor less important now or in the past.
  
  Luxury home market consumers who find wine amenities important in a home are more likely than consumers who do not, to find prestige (50% vs. 30%) and upscale amenities (97% vs. 75%) important.
  
  
• When purchasing a luxury home, physical structure and location are both important. 68% of the luxury home market find location equal in importance to physical structure and style. 27% said location is more important and 5% said physical structure and style are more important.
  
  
• Half of luxury home consumers find new construction with built-in amenities desirable. 64% gave new construction with built-in amenities a “4” or “5” on a scale of “1” to “5” with “5” meaning “very desirable” when considering a luxury home purchase or sale. 57% said pre-owned, previously renovated homes are desirable, 54% said newly constructed homes that are ready to customize are desirable, but only 24% said that pre-owned, ready to renovate homes are desirable.
  
  Generation X (born 1965 to 1981) luxury home market consumers are more likely than Baby Boomers (born 1946 to 1964) to say that pre-owned, previously renovated homes are desirable (60% vs. 26%).
  
  
• Professional kitchens, home theatre/media room, in-home spa/gym, and wine cellars top the list of amenities in U.S. luxury home market. When considering a purchase of a luxury home or condo, 96% gave professional quality kitchens a “4” or “5” on a scale of “1” to “5” with “5” meaning “very important;” 64% said home theatre/media room; 46% said in-home spa/gym; and 38% said custom designed wine cellar/room/closet.
  
  
• More than a third find wine amenities important in a luxury home. 38% gave custom designed wine cellar/room/closet a “4” or “5” on a scale of “1” to “5” with “5” meaning “very important” when considering a purchase of a luxury home or condo. And, a third (34%) said that a custom designed wine cellar/room/closet is quite important (i.e. gave a rating of “4” or “5”) in a luxury home for vacation or second home.
  
  
• More than half (55%) feel that the importance of wine amenities in a luxury home has increased in importance compared with five years ago. Only 8% said the importance has decreased. The three leading reasons people feel that the wine amenities in a U.S. luxury home market has increased in importance, compared with five years ago, are: 1) increase in wine collecting (20%); 2) more entertaining at home (15%); and 3) more people interested in wine (13%).
  
  
• Interest in wine amenities (wine room, wine cellar, wine closet, display cabinets) extends well beyond current ownership levels.The ownership-interest gap suggests a growing market for wine amenities:

Wine room:            Own 15%       Interest 59%

Wine cellar:           Own 17%       Interest 67%

Wine closet:           Own 20%       Interest 61%

Display cabinets:    Own 54%        Interest 65%

• Most luxury homeowners enjoy and buy wine often. Two-thirds (64%) enjoy wine at least once a week, and three-quarters (74%) enjoy wine at least once a month. A third (33%) actually purchase wine at least once a week, and three-quarters (73%) purchase wine at least once a month.
  
  A quarter to a third visit wineries (24%), participate in or host a wine tasting (26%), or participate in or host food pairings (32%) at least once a month. 5% even consider themselves “Wine connoisseurs!” and 5% say they are collectors.
  
  
• 4 in 10 of the U.S. luxury home market respondents’ interest in wine has increased over the past five years. 41% say their overall level of interest in wine has increased and only 13% say is has decreased. Those who say interest has increased attribute that increase to more frequent: 1) dining out (64%); 2) increased knowledge of wine (60%); and 3) have more discretionary funds (57%).
  
  
• Increases in wine collecting and entertaining have led to an increase in the perceived importance of specific wine amenities in luxury homes. 83% to 96% of the luxury home market who think wine amenities are important believe that their importance has increased over the past five years. When asked why, 20% said it was due to an increase in wine collecting, 15% said it was due to an increase in entertaining in the home, and 13% said it was due to an increase in interest in wine.  
  
  
• Appreciation of wine amenities and/or ownership of wine amenities correlate to collecting art, rare books, and sculpture. Luxury Home Market Consumers who find wine amenities important are more likely than those who do not to collect art (65% vs. 37%). Luxury Home Market Consumers who have wine amenities in their homes are more likely than consumers who do not to collect art (64% vs. 35%), sculpture (36% vs. 10%), and rare books (31% vs. 11%).
  
  
• Entertaining and proper storage are the most important reasons to install a custom wine amenity. Among those who find wine amenities important, 83% say entertaining and 81% say proper wine storage are the top important reasons to have or install a custom-designed wine cellar, room, or closet. In addition to wine storage, 57% of those who find wine amenities important also think that a custom wine cellar/room/closet would be a showcase in home décor, and 84% find that alternative important.  
  
  
• The U.S. luxury home market wants wine rooms that protect the wine, are easy to use and maintain, and are structurally sound. Among those who have wine amenities, are in the market for wine amenities, or have clients who have wine amenities or are in the market for them, 78% rate protect the wine a “4” or “5” on a scale of “1” to “5” where “5” means a “very important” aspect of the custom design and installation process. 77% give technically sound and easy to use a “4” or “5” and 76% give easy to maintain a “4” or “5.” Keeping the project in budget is only important (“4 or 5”) to a little over half (57%).
  
  
• Specialists are preferred when considering the installation of a wine room. 58% of those who rate wine amenities a “3,” “4,” or “5” in importance would prefer to seek the advice of a specialist when considering the installation of a custom-designed wine cellar, room, or closet. 51% would prefer the advice of a builder who works with a specialist, and 42% would prefer builder or architect advice.

For More Information:

Please direct all questions and inquiries related to this study to Mr. Paul Koder, Wine Consultant/CEO, WineTrend, www.winetrend.com; t-804-935-7121; f-804-935-7123.