Luxury Insights

Holiday Spending Projections and the Affluent

Just wanted to highlight two very different surveys that look at projected holiday spending this year. 

The first is a Harrison Group Study that predicts a mixed holiday spending season, with families earning under $75k a year spending less than last year and buying essentials, while those earning more than $75k per year (a fairly modest definition of the "high end") are expected to spend much more aggressively:

Consumers at the high end of the market appear to be unaffected by economic uncertainty and will spend with gusto. A rising tide of affluence and deepening family connections are producing interest in high-impact, high-quality gifts. Look for heavy spending on extraordinary quality and sublime luxury, from fashion to designer technology and event tickets to jewelry.

The second, more interesting study is the Elite Traveler / Prince & Associates 2007 Holiday Spending Survey .  Based on telephone interviews with more than 800  high net worth individuals (70%  with a net worth of $1M-$9.9M and 30% with a net worth of $10M+), the survey looks at projected spending by category.   

Among the key findings:

While the economy may be cutting back on the spending and holiday cheer of the Masses,  Holiday Spending by the Elite Affluent (Super Rich with a Net Worth $10 million +) is expected to increase significantly – between 17% and 67% across more than a dozen luxury categories.

Top spending categories of the Elite Affluent by percent increase are projected to be:

•  Jewelry (67% growth)
• Electronics (53%)
• Events at Hotels (44%)
• Wines & Spirits for Entertaining (39%)
• Stays at Hotels & Resorts (36%).

  Top spending by dollars spent are projected to be:

• Yacht Charters ($487,900)
• Automobiles ($187,400)
• Jewelry ($152,400)
• Charitable Donations ($116,300)
• Villa Rentals ($86,200)
• Hotel/Resort Stays ($83,400)
• Watches ($66,700)

The survey was conducted by Russ Alan Prince of Prince & Associates and Elite Traveler Magazine--authors of The Sky's the Limit, the book referenced  in an earlier post. 

The Elite Traveler website has a PowerPoint summary of the survey results (724k), and you can find their other research on the affluent here. 

New U.S. Record - $175 Million

If rumors and news reports are true, then the sale of the Steve Forbe's Trinchera Ranch in Colorado for $175,000,000 has just set a new record.  The 171,000 acre property was purchased by billionaire hedge-fund manager Louis Moore Bacon and tops the $103 million Ron Baron paid earlier this year for his Hamptons tear-down.   

This comes only days after Saudi Prince Bandar bin Sultan takes his $135 million Hala Ranch off the market.

The Sky's the Limit

There's a brief but very positive review of a new book on the affluent--The Sky's the Limit-- on Dick Baker's Life Style Marketing of Luxury Blog.  Here's a excerpt:

The Sky's the Limit is a new book about the "elite affluent." The major findings are about two sub-sets: Those with >US$10M in net worth and those with >US$20M in net worth. The book will repay with interest the time you invest in reading it...If you serve the very high end of the luxury market, you should read The Sky's the Limit as soon as possible. It should influence your marketing strategy beginning with your 2008 budget.

I think this might be another one for the holiday reading list...

 

Three Institute panelists shared great ideas at NAR, Part 3: Gayle Henderson

Last week at the National Association of Realtors convention, I moderated a Luxury Experts Panel consisting of three super luxury home agents who are members of The Institute – Sandy Raines, Stan Barron, and Gayle Henderson.  This week, my blog posts include some of the highlights of the panelists’ comments plus the links to their PowerPoint presentations.  Today’s featured panelist is Gayle Henderson of RE/MAX Excalibur in Scottsdale (AZ). 

Gayle Henderson believes in the power of the first impression, not only in the importance of your initial face-to-face meeting with a prospect, but in the impression made when someone sees your marketing materials for the first time.  As a result, Gayle puts special emphasis on creating marketing materials that not only look great, they are packed with valuable content.  The combination of high quality production, plus high quality content clearly helps Gayle brand herself as a luxury agent.  Although this philosophy is reflected in all her materials, it is especially evident in the custom farming newsletters she uses.  Gayle mails regular newsletters, which are specific to a part of town or a specific subdivision.  For example, her Scottsdale City Life newsletter is focused on the downtown lifestyle.  Content includes commentary on downtown real estate market conditions, real estate listings, a cultural calendar, a list of upcoming cultural activities, plus a recipe from a well-known downtown chef.  The piece is beautifully designed, printed in full color on quality paper and has a high perceived value.  All of Gayle’s marketing materials (both printed and Online) follow the quality design + relevant content + quality production formula.  Check out her NAR PowerPoint presentation for visual examples.

Another good idea from Gayle is her program for making her listings “sale ready” as quickly as possible.  Her W.I.S.E.R. Homes have homeowner Warranties, have been Inspected, Staged, Evaluated with a pre-listing appraisal, and Repaired.  Insuring that her listings are ready to close quickly gives Gayle’s properties an edge in the market.  Even more important, the pre- listing appraisal helps with pricing while the inspection and resultant repairs allow the seller to deal with condition issues upfront, eliminating most condition “surprises” after an offer has been made.

For more information on Gayle Henderson and her ideas, visit www.AZmovingplan.com, www.ScottsdaleLife.com (Gayle’s blog) and download Gayle's NAR presentation (PDF 2.13 MB).

What magazines do the wealthy read?

What publications do the wealthy read?  The nation's richest people spend time reading news  magazines and financial publications according to The Mendelsohn Affluent Survey, released this Fall by Monroe Mendelsohn Research. The wealthy also follow newsmaker and celebrity activities.

Among high net-worth households — the 2.6 million in the U.S. with $1 million plus in liquid/investable assets — the most-read publication is The Wall Street Journal (read by 18 percent of respondents), followed by People (read by 17 percent), National Geographic and Time (16 percent each), and USA Today and Newsweek (15 percent each).  By contrast, 95% of the wealthy spend time Online.

Three Institute Panelists shared great ideas at NAR, Part 2: Stan Barron

The Luxury Experts panel at the National Association of Realtors convention held last week in Las Vegas drew about 500 people who sat on the edge of their seats as Sandy Raines, Stan Barron and Gayle Henderson shared their secrets about working successfully in the upper tier.  Yesterday’s blog post reported on some of Sandy’s ideas.  Today, I’m sharing some of Stan’s comments.  You’ll also find his presentation available for downloading and reviewing. 

Stan Barron not only writes some of the best advertising copy in the real estate industry, he also takes professional quality photographs.  This combination makes his property brochures and ads among the best in the business.  Here’s a sampling of what Stan had to say.

Stan employs what he calls “The Principal of Sacrifice” in his property marketing.  He believes that a person who wants a large home is not a good prospect for a small house.  Someone who wants a big back yard is not likely to buy a home with no backyard.  So, he targets only the prospects who want what the listing has to offer and “sacrifices” or ignores prospects who aren’t a match for the property.  For instance, for a home which needed some work, Stan’s headline focused on prospects who were willing to take on an updating project.  He also built in a benefit --the location.  His subhead further targeted prospects by mentioning the $1.2 million price.  Here’s his headline, “If you will do the updating…here is a rare chance to snag a home in Central Austin.”  Subhead – “You can improve the condition, but not the position!  Price is $1,200,000.”

Check out Stan’s website at www.StanBarron.com  Scroll to the bottom of his homepage to find a link to his “how to Photograph Houses” booklet.   You can download his presentation (PDF 835k).

Three Institute panelists shared great ideas at NAR, Part 1: Sandy Raines

1. As always, the NAR convention offered a wealth of ideas for real estate professionals eager to take their business to the next level of success.  In one of the breakout sessions, three Institute members joined me for a luxury homes expert panel sharing ideas about working in the luxury home market.  Over the next few days, I’ll share blog posts outlining some of the panelists’ ideas.  The panelists will be featured in the order they presented at NAR – Sandy Raines, Stan Barron, and Gayle Henderson.

Sandy Raines of HER/Real Living in Columbus (OH) talked about how she has built one of the most successful real estate teams in the Mid-West.  You can download Sandy's PowerPoint for full information, but here are just a few teaser ideas based on what Sandy shared with the crowd: 

1. Sandy suggests that you WOW your prospects starting with the initial interaction. Rather than going to another location, Sandy schedules the very first meeting in her office to set a professional tone.  She greets her prospects with The Raines Team’s bottled water and chocolate and provides a “communications binder” which outlines the entire buying and selling interaction.  This is a powerful combination of solid information and attention-to-service details.
2. Sandy provides a moving van for her client’s use.  They can schedule the van Online.  At first she says she wasn’t sure that her upscale clientele would use the van, but soon discovered that they are excited about it and use it to move their wine, artwork, and other valuables.  She also makes the van available to local charities for use in their events.  Since the side of the van is a billboard for The Raines Team, Sandy gains important visibility every time the van hits the road.
3. Sandy not only uses business systems to manage her business more effectively, she also uses motivational systems to keep her team positive and operating at peak performance levels.  For example, she has each of her staff members create vision boards which are visual reminders of the specific goals they wish to achieve.  These boards are at their desks and help them stay focused on their goals (both business and personal).  At the end of each day, Sandy also encourages her team to think about 10 things they are grateful for and 5 successes they’ve accomplished that day.  This clear goal setting and positive reinforcement helps Sandy’s team keep their eye on the target and have fun in the process. 

Be sure to download Sandy's presentation at the link below.

Visit Sandy’s website at www.therainesgroup.com.  Here is Sandy’s presentation (PDF, 2.2mb)

At NAR this week

Like many of you, we're at the 2007 Realtors Conference and Expo in Las Vegas.  We'll be making the rounds to visit with friends, partners, and all the folks in attendance.  If you are going to be here,  note that Laurie is doing three sessions:

Tuesday, November 13, 3:30 – 5:00pm
“Win Over The Wealthy with LifeStyle Marketing”
Location:  The Venetian Hotel, Veronese Room 2503, Level 2

Wednesday, November 14, 1:30 – 3:00pm
Luxury Panel –“Luxury Experts Share Their Secrets”
Panel:  Stan Barron, Gayle Henderson, Sandy Raines
Location: The Venetian Hotel, Galileo Room 1005, Level 1

Thursday, November 15, 9:00 – 10:30am
“Win Over The Wealthy with LifeStyle Marketing”
(Repeat of Tuesday session)
Location:  The Venetian Hotel, Galileo Room 1002, Level 1

Not only will these be great opportunities to pick up some new marketing ideas, they’ll also be great opportunities to network with other members and attendees.  Hope to see you there.

Don’t forget to stop by our booth (#1844) and say hello!

If you would like to schedule a meeting, zip me an email.

$24 Million: New Miami Condo Record

In more über-sales news, Sharon Simms tells me that the penthouse at The Setai in South Beach has gone under contract for $24 million.  The buyer is unnamed.  Assuming it closes, this will be a new record for a Miami condo. 

The previous record was the 40th floor penthouse in Bristol Tower, owned by music producer Pharrell Williams.

$125 million offer for Manhattan Apartment

The Telegraph, The NY Post and the NY Observer are reporting that Russian born billionaire Len Blavatnik is seeking yet another "pied-a-terre" in Manhattan and has submitted a $125 million offer on the top three floors of  The Mark Hotel.  It would appear that the developer wants $150 million and  both sides are holding firm. 

Blavatnik, who's net worth is estimated at more than $7 billion, already owns a $50 million dollar townhouse on E. 64th Street and a $27 million co-op on Fifth Ave.  He made big deal news a few years ago in London when he purchased a home in Kensington Palace Gardens for £41 million ($86 million).