At the same time, gated communities throughout the United States are attracting wealthy buyers. They are wooed by gilded manors and the pledge of refined protection. Contributors Natalie Rice, Magdalena Petrova, Emily Park, and Tala Hadavi from CNBC dive into why these elite enclaves continue to intrigue so many people. Their latest analysis helps explain the intriguing reasons behind this pull.
Gated communities, defined by the presence of barriers to access, provide their residents with an exclusive, protected environment. These new developments are known for their luxury estates but surprisingly, one-bedroom condos, making them appealing to a wide array of lifestyles and tastes. Consumers looking for physical comfort and psychological security flock to these neighborhoods. They provide a calming refuge, removed from the chaos and stress of city life.
The fiscal impact of buying a house in a gated community is huge. Gated homes across the country tend to sell for 5-10% higher prices than comparable non-gated homes. This price premium represents the increased desirability of living behind gated walls. This higher price tag is indicative of the new leadership amenities and services often asked for within gated communities. It’s symbolic of the value we place on improved security and exclusivity.
In most instances, the desirability of gated living goes deeper than an aesthetic and sense of security. Beyond the affordability argument, the sense of community that these cash-poor neighborhoods foster can be incredibly attractive to residents. Most gated communities include common facilities such as golf courses, swimming pools, and fitness centers. These venues foster opportunities for residents to engage and create relationships with each other. This kind of amenity-rich, communal atmosphere can be very appealing to families or anyone looking for a more connected, close-knit environment.
Developers have deliberately located gated communities in areas where demand is high, often near the best public schools or close to shopping hubs and entertainment hubs. This accessibility makes them even more alluring to prospective buyers seeking convenience to go with their opulence.
In a 2020 analysis, Rice, Petrova, Park, and Hadavi uncovered a particularly salient takeaway. The majority of the local residents perceive the larger upfront costs of living in a gated community as a worthwhile long-term investment. Sought after luxury living, security improvements and community amenities make a desirable lifestyle on campus. The additional value is so self-evident that many Americans are willing to pay the premium.