Luxury Insights

Combination Yacht-Submarines Take Luxury Living Below the Waves

For clients who want to go beyond waterfront living or desire something more than just a yacht, How about a superyacht or a personal submarine?  How about both?

Luxury on the high seas was just taken to a whole new level with a ground-breaking partnership between EYOS Expeditions and Triton Submarines.  The collaboration combines the world’s leading supplier of superyachts, with the world’s personal submarine industry; promising to result in the most luxurious yacht-subs ever designed.

Clients will have the ability to not only take their superyachts to remote and unique locations not previously accessible, but also dive those yacht-subs over 1,000 meters below the surface. Working closely with yacht owners (or charter clients), the company will guide vessels into pristine, seldom visited areas by organizing, planning, permitting and leading expeditions – some with a scientific aspect. 

EYOS Partner Rob McCallum adds in Elite Traveler’s article, “This could be the perfect opportunity to discover a species and name it after yourself.” How many of your clients would love that?  At the very least, owners will have a truly unique floating and diving residence. Read the full article here.

Real Estate franchises high on list of nation’s top franchise systems

The “Franchise Times Top 200” is an annual ranking of the 200 largest franchise systems in the U.S.  Rankings are based on system-wide sales for the previous year.  Seven real estate franchisors made this year’s list, which was published this month. 

In determining the sales for ranking purposes, The Franchise Times (FT) estimated real estate franchise companies’ total sales based on 2.5% percent of the reported value of homes they sold.  In other words, a home sold for $200,000 would result in 2.5% of that number, or $5,000 credited to the franchise’s sales. 

See the chart below for this year’s ranking of real estate franchise systems based on sales.  Note that rankings would change if based on number of offices or number of agents.  Click to register to view the entire Top 200 list.

Cash is King!

Home sales are rising, largely driven by low inventories, rising consumer expectations, and shrinking distressed inventory.  But wait, aren’t low interest rates the number one factor in increasing property sales?  New research from Goldman Sachs indicates low rates may be slightly less important than many think.

Many buyers are reaching into their pockets to purchase homes with cash.  Goldman Sachs estimates that between 1^st quarter of last year and 1^st quarter of this year, a whopping 57% of residential sales were all-cash transactions.  However, in a real estate market where the total number of deals is rising, this still leaves room for an increasing number of mortgages for home purchase.  According to just released Federal Reserve data for 2012, the number of loans made to people actually buying homes (as opposed to refinancing), increased by 13%, compared to 2011.  This represented a five year high. 

The Goldman Sachs’ analysis estimates that around 20% of all homes sold before the housing downturn were all-cash sales (approximately 30% of sales by dollar volume).  But over the past seven years, a flood of money into the housing market has resulted in the all-cash share of sales more than doubling.

Whether your customers prefer to buy using a mortgage, or by paying all-cash, the good news is they’re buying!

Luxury in London

Interested in showcasing a stunning beachfront home in the Caribbean?  How about purchasing a luxury apartment in New York or London?  Looking for a buyer for your French chateaux or lake retreat in Australia?  The Luxury Property show held in London next month vows to present exceptional luxury properties, while putting on an amazing event.

This year’s show will be held at The Hurlingham Club, October 29-30, 2013, and promises to offer incredible sales opportunities for attendees.  Past showcases have attracted thousands of wealthy buyers, with the show focusing on drawing the leading property companies from around the world.  With networking events, interactive seminars and impressive exhibitions, The Luxury Property Show is set to be quite an event!

To take a look at the full show information, along with sponsorship and vendor opportunities click here!

400 Richest in U.S. Worth $2 Trillion

According to new research from Forbes, The 400 richest people in the U.S. are now worth a record total of $2 trillion.  Entry into this prestigious group starts at a net worth of $1.3 billion, while the average net worth of the group is $5 billion.  Topping the 400 Richest list for another year was Bill Gates, with a net worth of $72 billion.  Warren Buffett ranks as the second wealthiest American with $58.5 billion - despite having given away about $1 billion last year.

In a recent column, CNBC Wealth reporter Robert Frank offers some perspective on how much $2 trillion really is, starting with the fact that it is “more than the combined net worth of half of all Americans. The bottom half, of course.”  Here are more of Robert’s comparisons:

• $2 trillion would pay for all of the existing home sales in the U.S. in 2012 and 2013 year-to-date!
• $2 trillion is more than the annual GDP of Italy, Mexico or Canada.
• $2 trillion is equal to the Federal Reserve's holdings of publicly traded U.S. Treasuries.
• $2 trillion would fund all government spending through July of this year.
• $2 trillion is equal to about two-thirds of all taxes to be collected in the U.S. for 2013.

Number of World’s Ultra-Rich Hits All Time High

According to the new “Wealth X and USB World Ultra Wealth Report,” during 2012, the world’s Ultra High Net Worth (UHNWI) population reached an all-time high of 199,235 individuals with a combined wealth of US$27.8 trillion.  The increase in the number of ultra-rich bodes well for the upper-tier real estate market.

The authors of the report define UHNW individuals as those with a net worth of at least $30 million (excluding shares in public and private companies, real estate investments, investments of passion, and personal residences).  The average wealth of an UHNW individual has risen to US$139 million, up US$1.8 million from last year.  Within this ultra-wealthy group are 2,170 billionaires across the world who hold 23% of the world’s UHNW total wealth.

Despite the recent economic downturn, the U.S. is home to 65,505 UHNW individuals, an increase of 7.9% over the previous year.  Canada has 4,980 UHNW individuals, a number that remained relatively flat year-over-year.

The global UHNW population continues to be dominated by men, who form 88% of the total population.  Female UHNW individuals make up the remaining 12%, or 23,505 individuals globally. Self-made individuals, form 65% of the population and outnumber individuals who inherited their wealth.  Note the most common job titles shown in the accompanying chart.

For more information, see the full report.

The United Kingdom: “A nation of estate agents?”

If you think competition is stiff in the U.S. real estate market, where the ratio of Realtors® is approximately one agent for every 317 people, be glad you aren’t competing in the United Kingdom.  

According to a report in the Guardian newspaper, a record number of people work in British estate agents’ offices and the real estate sector is growing so fast that official figures show it was the fastest growing part of the U.K.’s national workforce in the three months ending in June.

Between March and June of this year, the count of real estate workers jumped 9.9%. Last year, the number joining the industry was a whopping 77,000.  The U.K.’s Office for National Statistics said that 562,000 people are now employed in real estate in the UK, the largest number since record keeping began in 1978.

"We're no longer a nation of shopkeepers – we're becoming a nation of estate agents," said Danny Gabay, director of economics for Fatham, a consulting firm.  His comment is right on target, there is one real estate worker for every 113 people in the U.K.  Now that’s competitive!

U.S. Inventory Down, Median Prices Up

Stewart Title Economist analyzes NAR stats

Ted Jones, the Chief Economist for Stewart Title, has taken a close look at July inventory levels and median list prices, as tabulated by the National Association of Realtors.  Here’s Ted’s summary report.  For information about your market, check out NAR’s monthly statistics.

Ted Jones:   Prices of all goods, services and real estate are reached in a market dynamic of supply and demand.  The supply of homes on the market parallels the number of listings available for sale on the multiple listing services in the country.  Each month, Realtor.com tabulates listing and asking prices for the U.S. and for 146 separate markets across the country.

Nationally, the total number of listings on the market at the end of July 2013 was 1.959 million, a decline of 5.24 percent when compared to 2012.  The listing count in July 2013, was up in just 29 of the 146 markets (20 percent), while the median listing price was up in 108 out of the 146 markets (74 percent).  Editor’s note: Median age of the listing inventory is 85 days.

The country’s median listing price was up 5.27 percent to $199,900.  In contrast, the median sales price of existing homes in June 2013 (the latest data available) was $214,200.  Since the median list price is less than the median sales price, this would indicate that more high-end homes are selling at this time. Editor’s note: There may be some sales above list as well.

So where are listing prices the highest across the country?  And the lowest?   The following tables show the 10 most expensive housing markets based on asking price, and the 10 markets with the lowest current median list price.  Eight of the top-10 are in California, with Honolulu and Washington, D.C. rounding out the list.  On the lower asking price list, eight of 10 are in the Midwest, with Ocala. Florida, and Macon, Georgia rounding out the 10.

Want to see how your market stacks up?  To view the entire Realtor.com listing summary, click http://www.realtor.com/data-portal/Real-Estate-Statistics.aspx

 

--Ted Jones, Chief Economist, Stewart Title

Paper-based Kitchen Countertops?

Kitchen countertops continue to evolve and real estate professionals in the luxury arena need to keep up with what’s hot and what’s not.  So here’s a link to a site that features 15 popular countertop choices -- from zinc to paper-based (yes, paper!) -- plus the pros and cons of each.  Take a look and you’ll be more knowledgeable about the options available to your clients and customers.

Have it your way! Household amenities based on interests and lifestyles

Mad about music?  Equip your shower with Kohler’s new Moxie singing shower head that streams music as well as water for just $199.  Beer lover?  How about an $8,000 Brew Cave walk-in refrigerator that will keep 30 cases of beer, six kegs, and a draft dispensing system at perfect temperature?  Conflicted about whether to hang a painting or TV over the fireplace?  Hang both.  With a fine art TV cover, your television is disguised as a piece of elegant artwork.  With the simple press of a button, your canvas painting quietly rolls up inside the frame to reveal your flat panel HDTV.

These are just three of the new features you might find in today’s homes.  While you might consider these amenities a bit frivolous, they are indicative of the small custom conveniences which homeowners can choose from based on their interests, lifestyles and budgets.