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June 2010

Think you’re one of the best in the business?

TrophyHere’s your chance to shine.

The search is on for the real estate professionals in the luxury home niche who do the best job of marketing themselves and their properties.

Our  Leaders in Luxury National Marketing Competition is challenging real estate professionals across the U.S. and Canada who think they are among the best in the luxury marketing arena to “Prove it!” by submitting samples of their marketing for review by a panel of professional ad agency and marketing executives. 

The competition, which is in its sixth year, allows luxury Realtors® to highlight the outstanding work they’ve done in successfully marketing luxury homes and estates and to demonstrate best practices associated with building their own real estate brands.  Winners will be announced at our annual Leaders in Luxury symposium and networking event to be held October 20-22, in Austin (TX).  

Entries are being solicited in the following categories:

  • Best Marketing Campaign for a Luxury Property (domestic or international)
  • Overall Excellence in Personal Marketing with Emphasis on Agent Branding
  • Best Online Marketing
  • Best Market Data Report
  • Outstanding Personal Achievement (during the last three years)

The contest is open to Institute members and non-members who are registered for The Leaders in Luxury event. 

Information and the competition entry form is available at www.LeadersInLuxury.com.  Deadline for receipt of entries is September 24th. 

We know you’re good, this is your chance to prove it!


Anatomy of a property photograph

If you've been through our training, or heard us talk, you know that we are always talking about the importance of good photography when it comes to selling homes.   Research shows that luxury buyers prefer lots of good photographs over virtual tours, and a study from Realtor.com shows that the more photographs a listing has on the site, the shorter the time on market (which could mean that more photographs make properties sell faster, or that agents that do good marketing and move properties quickly also tend to use more photographs in their marketing, or both).

"To Sell a Luxe Apartment, No Ordinary Snapshot Will Do" is an article in today's New York Times that talks in general terms about the importance of good photographs and provides a before and after sample photograph with a nifty "slider" you can drag across the image to change it from "before" to "after" and back. 

BEFORE:
Before

With "slider" in the middle showing parts of both images:Split

AFTER:
After

It's nifty, but it doesn't give us much useful information about what is actually different.  The caption of the photo describes the differences as simply, "added touches and more sunlight edited in" which doesn't really tell us much.

I thought it might be useful to have a quick crash course in photography and analyze the "before" and "after" photographs.  The goal here is  to identify the key differences and to give you some things to look for when evaluating your own property photographs and when working with photographers.

Exposure and Color Balance

Exposure basically means how light or dark the image is overall or in particular parts of the image.  Color balance or color temperature refers to the "warmth" or "coolness" of light and how accurately colors are represented in the image. 

Looking at the before and after images one of the obvious differences is that the interior exposure has been increased or "brightened."  This is perhaps most obvious in the marble of the counter top and the detail in the cabinetry:

Exposure1

In the after image, the white of the marble is brighter, but still shows detail, and the wood of the cabinets is not dark and shadowy, but actually shows color and form.

Overall color is another obvious difference.  The "after" image is color balanced to be more neutral and "warmer."  When you look at the "before" image we can see that, uncorrected, the light coming through the windows and illuminating the rooms is "cool," giving everything a blue-green color cast.  Corrected, the scene appears "warmer" and more color neutral or accurate.  This is perhaps most obvious when looking at the color of the wall by the windows on the left side of the room:

Color1
In the "before" image it looks almost green.  In the "after" image is is a more pleasing, and presumably more accurate beige.  Of course the exposure change has made the shadows less intense and shows more detail in the cabinetry.  Overall, the whites are whiter, and the colors "cleaner" in the "after" image.  Generally speaking, accurate color is good and "warmer" light is perceived as more inviting.

The other really big difference in the images is in the exposure of the outside, as seen through the living room window:

Outside_exposure

In the "before" image the outside is over-exposed or "blown out" meaning that it is rendered too bright in the image with little or no detail.  In the "after" image the outside has a more normal exposure and the color and detail of the outside scene is retained.  In the "before" image, the photograph essentially "ends" at the window.  By contrast, in the "after" image, the view is extended and not only does the image have more apparent depth, but we can see that the apartment has a fabulous view of Central Park--a very desirable and expensive amenity in NYC real estate!

Composition and Lens Choice

Although they look very much alike in the way the images were composed, the "after" image was shot with a wider angle lens and from a slightly different camera position.  This makes for some subtle but important differences.

At first glance the framing of the images looks almost identical.  But when we look more closely we see that we have a wider view and see more in the "after" image.  The images are composed so that the bottom parts of both photos are about the same-- the crop is similar and the bar chairs in the foreground are in about the same position in both images.  But, in the "after" image we see more of the cabinet and wall on the left, more of the wall and corner on the right, and more of the ceiling at the top.  Sometimes having a wider field of view and seeing more in an image can make a space look bigger.  We see that effect a little bit here, but there is an even more subtle but powerful effect hidden in this image.

Not only do wide-angle lenses include more side-to-side and top-to-bottom, but they also exaggerate the relative sizes of objects in the foreground and background.  Put simply, they make things in the foreground look bigger and things in the background look smaller.  Often, this makes the distance between foreground and background look greater.  

If we look again at the detail of the chair in the background, we see that it is slightly smaller and appears further away in the "after" image, making the rooms appear larger:  

Outside_exposure

Look again at the full before and after images and I think you will see this effect even more pronounced.

The there is another subtle difference in the "before" and "after" images that makes a big impact.  The photographer who shot the "after" image moved the camera slightly to the left.  This very subtle change did a number of things compositionally that direct your eye and your attention in ways that make the space seem bigger and more attractive.

We can see that the camera has move to the left in the "after" image by comparing it to the "before" image.  In the "before" photo we see quite a bit of the column and the face of the wall on the left side of the photo and quite a bit of window and space between columns in the center of the photo:

Callouts1

When we look at the "after" image we see that by shifting the camera we see less of the column and wall face on the left and the gap in the center has been closed:

After

This brings the eye into the living room with less distraction giving it more prominence and reducing the visual clutter.  It also shows more continuous window behind the chair in the living room, making it appear larger too.

Perhaps even more important, shifting the camera to the left created a line of perspective by aligning the bar chair in the foreground with edges of the cabinet bases and ottoman creating a visual path that recedes unobstructed into the distance:

Sight-after

Before

Another important difference between the images can be seen on the far left and right side of the photos, where instead of being vertical, the cabinets on the left and the wall on the right seem to be "falling" backwards out of the photo in the "before" image.  In architectural images, verticals should be vertical.  When they are not, viewers often view the images as being somehow "off" or "uncomfortable" even if they don't consciously notice the tilt, or can't identify why.

Individually, these may seem like little things, but together they can be the difference between a good photo or a bad one, an expired listing or a sale.


Asians snapping up London properties

Kevin Brass of the International Property Journal (IPJ) reports on a recent report by Knight Frank:

Asian investors are purchasing central London property in unprecedented numbers and now account for 20 percent of all new build sales, a new report concludes...

“While the market has returned to life, after it pretty much shut-down in 2008, current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” said Knight Frank residential research director Liam Bailey.

Of the investor buyers last year, 49 percent were Asian, with Chinese and Hong Kong investors represented the largest group, 11 percent, followed by 10 percent from Singapore. Despite tales of free-spending sheiks and Russian oligarchs, only 3.5 percent of the buyers last year were from the Middle East; 3.1 percent were from Russia.

Source: International Property Journal


Online insights in this month's 'Wealth Report'

2010-06-15_1030

The June 2010 Wealth Report Newsletter is now available for members.

In this month's issue:

  • Retail Round-Up: Luxury Continues to Lead Retailers in May
  • Luxury Institute WealthSurvey: Multichannel Shopping Habits of Ultra Wealthy Consumers
  • Luxury Institute Luxury Brand Status Index (LBSI) Rankings-Japan:
    -Women’s Fashion
    -Women’s Handbags
    -Women’s Shoes
    -Men’s Fashion
    -Men’s Shoes
  • Scoring In-Store Luxury Experiences

Members can access this report and an archive of past reports on our website (login required).  More on the report from our partner the Luxury Institute here.

There is always good information in the Wealth Report newsletters, and I found this month's WealthSurvey on the online shopping habits of the Ultra Wealthy particularly interesting and worth considering in the context of your own online presence.  Here is a quick summary of their findings:

Even when the Web is not the channel through which a purchase is made, the Internet is still a powerful and popular tool that has become integral in the shopping process for many luxury categories.

  • Seventy-three percent of ultra wealthy consumers use the Internet for online shopping more than they did five years ago
  • 75% say they are satisfied shopping online for luxury goods and services.
  • Two-thirds (65%) say that online shopping has become simpler than it was five years ago, and 55% cite the greater availability of sites that permit and encourage shopping as factors behind greater usage.
  • Simple navigation and ease of use are the most important site attributes, say 95% of ultra wealthy shoppers
  • 94% cite email notification of orders and an easy check-out experience as top criteria.
  • Relatively unimportant according to ultra wealthy shoppers are connections to Facebook and Twitter (73%), and the availability of downloadable widgets (71%) or mobile phone applications (69%).
  • The biggest reason for not shopping online is the desire to touch and feel products, cited by 59% of respondents.
  • One in four (24%) refuse to shop online because of fear products could be counterfeit and 21% are not comfortable sharing personal data online. 

(Emphasis above mine)

The key take-aways?

If you want to get and keep their attention, your website must be simple, easy to navigate, and easy to use.   Does your site measure up?  What sites do you think they rely on most when searching for homes?  How are your listings presented on those sites?

Email is much more important than social networking with this group.  Think about what this suggests about their communication preferences.  My guess is that they want simple, clear, concise, and timely information in a familiar channel that fits in their existing schedule and work-flow.  Ask and be clear on their communication preferences when working with these folks.  Also, think about your time and marketing spend when it comes to your online presence and what percentage of your attention and dollars are going to your website, social media, etc.

One-in-four have little "trust" in online interactions and are hesitant to share personal information online.  Consider this if you require website users to sign-in or provide personal  information.  There had better be a clear reason and a good payoff for them.  You will have to earn their trust.


Most expensive homes for sale in America

Every year in their Ultimate Homes issue our friends at Unique Homes Magazine compile a list of the most-expensive homes for sale in America

The Ultimate issue will be hitting the newsstands and our mailboxes soon, and it looks like the editors at Unique Homes have some interesting observations about the market, gleaned from their work on this year's edition...

UH


A Flight to Tangibles

EB-AG845_Paint_DV_20100609152512[1] With our banks and financial markets often offering less certainty, lower returns, and higher perceived risk, the affluent are increasingly looking for tangible assets in which to invest their cash. 

The Wall Street Journal has an interesting story this morning that looks at the booming state of the art market for masterpieces- "The Flight to Tangibles - Not for the first time, art is benefitting from economic gloom." 

Why is it that the art market appears to be immune from the turmoil in almost every other sector of the global economy?

"It is simple," says David Nahmad, one of the world's most famous art dealers. "A lot of investors are distrustful of equities. They are terrified of cash that pays 0% at the bank and is threatened by the 'great inflation' lying one to two years ahead..."

The key word in this analysis is "masterpieces". It is not that the art market is immune to asset bubbles and over-valuation. Speculative sectors, such as the contemporary Indian art market became in the 2000s, suffered a shake-out in the wake of the credit crunch. But buyers always seem able to stump up the cash when the best works of so-called "blue-chip" artists comes on sale.

Interestingly, the same is often true for real estate.

 


Sale of 'Le Belvedere' sets new record for 2010

More on the long rumored sale of the Bel Air mansion "Le Belvedere" in today's Los Angles Times article, "Bel-Air mansion fetches highest price this year for a U.S. residence."

In a nutshell:

Although he wouldn't release the sale price, seller Mohamed Hadid confirmed that it was in excess of the previous record of more than $46.5 million set this spring in Colorado, falling between $50 million and the asking price of $72 million. In Los Angeles County, sale prices can take more than a month to appear on the public record.

Designer-developer Hadid had listed the walled and gated estate 15 months ago at $85 million.

The 48,000-square-foot estate, called Le Belvedere, was bought in the name of a limited liability company, not an individual. "Even I don't know who bought it," said Hadid, who has built Ritz-Carlton hotels, office buildings and king-size estates nationwide during his 30-year-plus career.


BCG Report: The Ranks of Millionaire Households Swell

Global Wealth Stages a Strong Comeback, but Wealth Managers Still See Performance Declines and Challenges Ahead, Says Study by The Boston Consulting Group

According to the study...

The Ranks of Millionaire Households Swell

Wealth became slightly more concentrated as it grew. Less than 1 percent of all households were millionaires, but they owned about 38 percent of the world’s wealth, up from about 36 percent in 2008. Households with more than $5 million in wealth represented 0.1 percent of households but owned about 21 percent, or $23 trillion, of the world’s wealth, up from 19 percent in 2008.

  • The number of millionaire households rose by about 14 percent in 2009, to 11.2 million—about where it stood at the end of 2007.
  • The United States had by far the most millionaire households (4.7 million) followed by Japan, China, the United Kingdom, and Germany.
  • Singapore saw the highest growth in millionaire households, up 35 percent, followed by 33 percent for Malaysia, 32 percent for Slovakia, and 31 percent for China.
  • Smaller markets had the highest concentrations of millionaire households. In Singapore and Hong Kong, millionaire households accounted for 11.4 percent and 8.8 percent, respectively, of all households.
  • Switzerland had the highest concentration of millionaire households in Europe and the third-highest overall at 8.4 percent.
  • Three of the six densest millionaire populations were in the Middle East—in Kuwait, Qatar, and the United Arab Emirates.
  • Despite its large population, the United States had the seventh-highest density of millionaire households at 4.1 percent.
More details in The Los Angles Times, "Millionaires Make a Comeback" and The Wall Street Journal, "Millionaire Population Bounces Back to Pre-Crisis Peak"


Luxury Market Bouncing Back?

Despite the ongoing troubles in the housing market, there is increasing buzz that sales are picking up in the luxury segments of many markets.

Some recent stats support this.  NAR’s numbers for April 2010 showed that sales of million-dollar-plus homes were up 54% year-over-year.  CoreLogic reports that at an even higher price point, nationwide sales of homes $2 million to $5 million totaled 2,461 in the first quarter, up 32% year-over-year. 

Let's take a look at our ILHM National Luxury Market Report for some of the current trends:

  Price

Overall, average list prices are down, a function of both the pricing of new listings coming onto the market, and price reductions on current listings. 

  Inventory

Inventory has been increasing from a low in the first quarter of the year. 

Ppd
Since the first quarter, we've seen a steady increase in the percentage of active listings that have decreased their asking price at least once over the past 90-days.  As you can see from the charts, this trend has tracked quite closely with the increase in inventory and the decrease in average list price.  

Dom

Despite the increasing inventory, over the last month or so we've seen a strong reduction in average days-on-market for active listings--a sign that more rational pricing is leading to quicker sales.  

Keep in mind of course that like the weather, trends in real estate are LOCAL phenomenon.  National stats like these are just a convenient way to generalize about the health of our markets as a whole. 

The real story for you (and your buyers and sellers) is what's happening in your neighborhoods across the various price segments.    The story often gets interesting and your expertise as an agent really shines when you can show that in a particular neighborhood, at a particular price segment, the market is doing something interesting and there are "hidden" opportunities.  The market reports you're sending out should highlight these trends and "ah-ha" moments for your clients, past and future, and position you as THE go-to expert on the local market.