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September 2011

Wealth Survey: Why the Rich ARE Buying

Here's another peek at some of the results of the Wealth Survey: Real Estate and Lifestyle.  See our previous post for more details. 

Here are the top reasons given by affluent Americans who ARE planning a real estate purchase this year.  

Why
 
Are your marketing pieces and messaging highlighting these opportunities?  They should be!  


Wealth Survey: Why the Rich Are NOT Buying

Here's another peek at some of the results of the Wealth Survey: Real Estate and Lifestyle.  See our previous post for more details. 

Here are the top reasons given by affluent Americans who were NOT planning a real estate purchase this year.  

WhyNot

Do you have scripts to overcome these common concerns and objections?  Are you addressing these issues in your market update reports?  You should be!


Wealth Survey: Tools Affluent Buyers Use

Recently we collaborated with the New York based Luxury Institute on the Wealth Survey: Real Estate and Lifestyles, a study which looked at the current beliefs, attitudes, and plans of high-net-worth Americans as related to real estate.  

The results of study are available to members of the LuxuryBoard, and to Institute members, who can download an 80 page summary of findings on the Document Downloads page of our website.

The study covered many topics, but we thought we would give you a peek at some of the results...

Here's how affluent BUYERS responded to the question, "How would you rate the importance of the following resources in your search for your most recently purchased home? "

Most_important_resources

Obviously wealthy consumers rate “Internet property listings with photos” as the most important resource when searching for a home, followed by “friends or acquaintances.”

Although it is not show in this simple graph, the results cleary show that as income increases (within this already affluent group), a local brokerage company website becomes more important and local newspaper classifieds become less important.  

Likewise, print advertising in the form of luxury home magazine ads, The Wall Street Journal and The New York Times is also deemed more important by those with higher income and/or net worth.

Is this consistent with your "marketing mix"?  Do your marketing plans look like this?  If not, you might want to think about doing some tests to align your marketing more closely with buyer expectations and see what results you get.


Barron's: Urban Luxury Homes Are Making a Comeback

Barron's reports:

The market for luxury goods is in full-fledged revival mode, and that includes high-end city real estate -- apartments and townhouses in the $5 million-plus range. After plunging 30% from peak to trough, luxury-home prices in many big urban markets are back on the rise...

Even in many markets where prices are still down, we're seeing increased sales activity, fewer price decreases, price strenght relative to inventory levles, shorter days-on-market, and other signs of the relative health of the luxury segment.  

Of course you know this if you participated in our recent How's the (Luxury) Market webinar.  You'll find other hints as to how various markets are doing in our ILHM National Luxury Market Report.

The economy is a mess and we're nowhere near being "out of the woods" yet, but when it comes to real estate the luxury market is the about the only bright spot.


September 'Wealth Report' Now Available

Wealth Report

The September 2011 Wealth Report Newsletter is now available for Members.

In this month's issue:

  • Luxury Retail Sales Resilient in Stormy August
    Neither inclement weather nor wealth destruction deters wealthy shoppers from stepping up the pace of their purchases at luxury retailers in August.
  • WealthSurvey: The State of the Luxury Industry According to U.S. Consumers 2009-2011
    Compared to 2009 or 2010, fewer high net worth U.S. consumers have plans to curtail spending this year and many expect to spend much more. 

Members can access this report and an archive of past reports on our website (login required). 

The report is produced by the New York based Luxury Institute, a uniquely impartial, independent and objective ratings and research organization that is the global voice of the high net-worth consumer. 


Photo Friday: Setting the stage for a sale

We know that good photographs help to sell homes more quickly.  More often than not they are the potential buyer's first visual introduction to the property.  Whether it is online, in a printed brochure, a magazine, or other publication, photographs often make the first impression and influence what's to follow ("Ewww...next!" or "Oh, look at this.  Let's go see this one!").

On a basic level, photographs of a home give us lots of information about the layout, style, size, and condition of a property.  Is it an open plan featuring large living areas with high ceilings and lots of light?  Or is it a Queen Ann with a gingerbread porch and a small parlor with bay window? 

Let's take a look at an example.  Here's a photo of a simple room in a home for sale: 

LR - Before 
A Nice Second Bedroom?

The photo is well exposed, in focus, and the camera wasn't at some odd angle or perspective.  (These should all be givens, but look at the photos that accompany some listings, and you really start to wonder...).  We see a simple, unfurnished room with wood floors that appear to have been recently refinished, crown moulding, base moulding and a door of a style that suggests an older home.  A floor register suggests a forced air HVAC system.  Because the room is unfurnished, it's hard to tell which room it might be.  Is it a bedroom?  What furniture would you put in this room?  How would you live in it?  Without more information, you probably can't answer these questions.  Neither can the potential buyer.  That's one of the challenges of selling an empty home.

Let's take another look at the same room, from the same camera angle:

LR - After
Cozy living room

Staging makes a difference, huh?!  Here we see that it's a cozy living room, tastefully decorated with a sofa, love seat, tables and chair.  It looks like a nice spot to sit with a drink and visit with friends, or relax and watch some television.   

Which image do you find more appealing?  

In the second photo, the furnishings immediately tell us the function of the room, give us a better sense of its size, and present a warmer scene in which it is easier to imagine ourselves enjoying the home.  Even if it is "just staging," it highlights the potential of the room in a way that a buyer might not otherwise see.  

Empty homes present special challenges in showings and in photographs.  It can be hard for potential buyers to see past the emptiness and envision how they might furnish and live in the home.  

Kitchen - Before

In photographs of empty rooms like the one above, my eye is often drawn to details of contrast like mouldings where surfaces meet and vents in the floor.  As a result I think more about the structure, materials and finishes.

Kitchen - After
On the other hand, in photographs of staged or furnished rooms my attention is pulled away from the little details of the floors, walls and ceiling, and I take in the whole scene.  It is much easier to imagine actually living in the space.  The stage is set, the only thing missing is the people--and my mind can easily fill in that blank! 

MBR1 - Before

MBR1 - After

If you haven't realized it yet, all of these images were "virtually staged" meaning that the furnishings were added digitally to the original photos of the empty rooms.

In the perfect world, you could elaborately stage every home for showings and photographs.  In the real world, circumstance and marketing budgets sometimes make staging homes impractical.   This is true for starter homes, like the one above, as well as luxury homes.  Virtual staging can be a great, and much more affordable option.  When you do use virtual staging, you'll want to be sure to disclose that the images are digital renderings or have been modified.  Check with your broker for the appropriate disclosure terminology to use.  

Of course the resulting images can be used in the property marketing materials online and in print, but they can also be used in the home during showings.  Some agents do large prints and mount them on easels throughout the home.  This makes it easy for possible buyers to see past the emptiness and recognize the potential of the rooms, or even to envision alternate uses for furnished rooms--it's an easy way to help the buyer see that the sewing room could become a well-appointed home gym.

Photographs are full of cues which tell us about the tastes and lifestyles of the homeowners.   This is important, especially in the luxury market, where lifestyle is one of the key factors driving purchase decisions.  Virtual staging gives you great flexibility in speaking to the tastes and lifestyles of your best prospects and positioning the property accordingly.  

Done well, it certainly beats an empty room.

*A big "thank you" to Institute member Daphne Shepherd and to Virtually Staging Properties for providing these images as examples.   Members can find more details and special offers from Virtually Staging Properties on this page in the Members Only section of our website.