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May 2012

Luxury market in Canada setting records

Not that it is any surprise to those of you working the luxury market in Canada, but RE/MAX released the results of a study last week showing an uptick in homebuying activity in 13 of the 16 key markets studied and new records set in luxury home sales in 10 markets in Saskatchewan, Ontario, Quebec and Nova Scotia.  

You can find the press release and additional stats here: Luxury Housing Sales Surge Forward

“Principle of Sacrifice” strategy results in full price sale in 8 days

In our Institute for Luxury Home Marketing training we talk about sacrificing those buyers who will never buy the property you are marketing and instead focusing on the best prospects -- the prospects that are a match for the property based on property characteristics.  We call this targeted marketing  strategy “the principle of sacrifice.”

Paul  Basile -- a new ILHM member who is a Broker Associate with Douglas Elliman in Miami Beach --  contacted us to say he was testing the “principle of sacrifice” in the MLS description for one of his listings.  Here’s what Paul said in his email:

"I have a condo for sale in Miami Beach that was known as the "Land of No."  No renting, no dogs, no more than 3 people per unit.  I decided to take your advice and ‘sacrifice’ the 90% (who will never buy this property) and revise the remarks to target the 10% or even 5% that might actually be interested in my listing. 

Please note that the remarks are short because our Miami MLS only allows us to use 500 letters and spaces in our remarks section.  I will let you know if it sells faster with the revisions."

1510 Sq Ft Waterfront 3 Bed 2.5 Bath Corner Unit, Loft Condo w/10 Ft Ceilings Thru-out & Open Kitchen. Huge Living Room w/Great Light, Private Balcony Overlooks Intracoastal, Bal Harbour & Surfside. Watch Sunrises & Full Moons Over the Water. Loft has Windows Facing East, North & West and Multiple Walk-in Closets. Boutique Building Includes Waterfront Pool & Dock Availability w/No Fixed Bridges to Haulover Cut & Atlantic Ocean Boating! Rare Opportunity: High Ceilings, 3 Bedrooms, Cat OK & Low Maintenance.

Revised Principle of Sacrifice MLS  Remarks:
Finally Peace & Quiet! No Barking Dogs! No Renting! Tired of Noisy Neighbors? We Have Concrete Walls! Tranquility at its Best. Want Space? We Have 10 Ft Ceilings to Display Art! 1,510 Sq Ft Waterfront 3 Bed 2.5 Bath Corner Unit, Open Kitchen, Huge Living Room w/Great Light, Balcony View of Intracoastal, Bal Harbour, Surfside. Windows Face East, North & West. Huge Closets. Boutique Building w/only 24 Units Includes Waterfront Pool & Dock Availability!  Cats & Pets OK, but No Dogs! Maintenance $500

Did Paul’s new strategy work?  

Here’s what he reported -- he received a full price offer just eight days after he changed the description for his listing.  

Way to go Paul!  Congratulations.

Shrinking Inventory and Rising List Prices: Continuing Signs of a Recovering Housing Market

Ted Jones, Senior Vice President and Chief Economist for Stewart Title, spends a lot of time keeping his finger on the pulse of the housing market.  We asked Ted to comment on what he sees happening in the residential market nationally -- across all price points -- and he has some up-beat observations to share.  Here are Ted’s comments:

There are positive signs spanning the spectrum indicating a turning real estate market, despite some weak spots across the country.  

Just a few days ago,  USA Today reported that the number of existing homes for sale had dropped 22 percent from a year ago and now totals just 2.37 million units.  This is down 41 percent from the peak reached in mid-2007.  That said, the National Association of Realtors® reported rising prices in 74 of the 146 markets they track in the first quarter of 2012 versus declines in 72 locales.  Even more significant is the dramatic decline in some of the hardest hit markets:

  • March inventory in Phoenix declined 64 percent from a year ago according to Arizona State University real estate expert.
  • NAR reports very tight inventories in Phoenix, Orange County, California, Naples, Florida, Seattle, suburban Washington, DC and North Dakota (driven by the energy boom being experienced in that state).
  • While mortgage delinquency rates remain above average (with average being 2 percent), they dropped from 6.19 percent in Q4 2011 to 5.78 percent in Q1 2012 according to TransUnion  (based on a sample of 10 percent of US mortgage holders)  and are down from a 7 percent peak in Q4 2009  
  • All-cash transactions in Q1 2012 made up 31 of all sales—and I doubt these people would be buying and paying cash if they thought property values would decline further
  • 22 percent of all buyers were investors
  • Condominium prices rose 3.4 percent when compared to Q1 2011
  • Q1 2012 existing home sales were up 5.3 percent from the same period in 2011 and are now running at annualized rate of 4.57 million
  • Total existing home sales in Q1 2012 were at the highest level since 2007
  • reports that many of the hardest hit markets are now among the top recovering markets   

Visit Ted’s “Jones on Real Estate" Blog for more market information.