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August 2012

Central New Hampshire Luxury Market Update: It’s All About the Waterfront

Link_head_shot_2011_150w_1148495119_7154[1]When it comes to knowing the ins and outs of the New Hampshire luxury home market, Institute member Link Moser of New Hampshire Fine Homes, has no trouble reciting just about every relevant statistic and data point there is to know about this market.  In fact, he even goes so far as to publish his own quarterly Real Estate Home Market Review, modeled after our very own ILHM National Luxury Market Report.  Here’s his insider’s take on what’s happening in his unique luxury home market:

What’s the typical starting price of your market?

LM – If you’re talking about a waterfront property, the entry point is $1 million. Non-waterfront properties start at around $750,000 in more rural areas. Generally speaking, the more popular luxury home areas start in the low seven figures.

The biggest chunk of luxury homes are waterfront properties on Lake Winnipesaukee, one of the largest lakes in all of New England.

How would you describe the pulse of your market?

LM – Things are going pretty well. Activity is good and prices feel like they have bottomed. The second quarter of this year had the highest number of transactions in the past 10 quarters. However, there is a scarcity of good inventory and buyers are finding very few things coming on the market. It appears as though sellers are either holding out because they believe prices are trending upward or they have given up on trying to sell right now.

How different is your market from last year at this time?

LM – Average sales prices of waterfront properties have increased over the last four quarters and the number of days on market is down.

We’re seeing more tech people retiring and buying retirement homes which follows the trend nationally of baby boomers who are interested in buying and planning for their retirement. What’s great about this market is many of the homes have family centered activities based around the water. And there’s also a fair number of gated communities and planned developments if that’s your preference.

What’s one of the top trends are you seeing?

LM – Well, surprisingly some of the antique homes with larger acreage which New England is known for are staying on the market longer. The most likely reason for this is because oftentimes people associate older properties with more maintenance.

What do you see ahead short and long term for your market?

LM – This market will continue to rebound and be good as long as there is decent inventory. There’s a lot of buyer interest due to the investment value.

A big driver of this market is the retiring baby boomers from Boston and the New York City area. There are only so many waterfront homes available – and you can’t forget: New Hampshire doesn’t have sales tax and there’s no personal income tax.

***

Stay Tuned.  Next week we'll get an update on the Arkansas luxury market from member Ida Fineberg.  


Just how big is the second home market?

Recent statistics from the Census Bureau reveal that nationally, about 3.5% of the housing inventory falls into the seasonal, recreational, or occasional use category.  

The states that lead the list with the highest number of properties in these categories may surprise you. 

Secondhomes

Based on the 2010 Census (not released until almost the end of 2011) these are the most current stats available. Given slow new construction rates these numbers are still realistic.

Find more on housing data and statistics from the Census Bureau.


Foreign buyers flock to Miami

 

The Financial Times reports on Miami's foreign cash fueled turn-around:

Residential sales are up nearly 24 per cent for the first half of the year following a record 2011 sales season. Christopher Booker reports on how one of the hardest hit US housing markets has been reignited by foreign cash buyers.

http://video.ft.com/v/1777235280001/Foreign-buyers-flock-to-Miami

Hat tip to Institute Member Carole Smith who is  featured in the video. 


Luxury Marketing Awards

It’s time again for our Marketing Awards Contest which is open to attendees of our annual Leaders In Luxury event. There’s still time to enter. The deadline is September 24th, so start preparing your entry now!

In the meantime, we thought you’d enjoy seeing a few highlights from last year’s award winners. Entries were substantive, so what follows is a quick overview.

The Best Marketing Campaign for a Property was awarded to Joyce Marsh of Illustrated Properties, Daytona Beach (FL). Joyce did an exceptional job of telling the story of the home and highlighting what made the home special and unique. In addition, her photography was excellent, the marketing materials reflected the quality of the home and her comprehensive written marketing plan included a nice mix of traditional media – including luxury home magazines – and digital media, all designed to target the very successful.

TellingTheStoryWhat really caught the attention of the judge; however, was the story aspect of Joyce’s marketing strategy. Rather than just saying the property was custom built with special features and amenities, Joyce wove a complete story about the home’s construction beginning with how the owners knocked on the door of a home they admired in another state to ask who had designed it, only to find the owner was the architect. She described their discovery, on a visit to an English manor house, of a hand painted mural which they duplicated in the home’s dining room with the help of talented English artisans.

Reading Joyce’s property description, you quickly get the idea that much research was done and no expense was spared in the design and finishing of this property and that the price was warranted. All in all, a nicely done property marketing campaign which resulted in a record-setting sale price.


Overall Excellence in Personal Marketing with Emphasis on Agent Branding went to Brad Hermes with Hermes Fine Properties, Keller Williams in Houston (TX). Brad’s entry quickly became a prize contender when the judge saw Brad’s elegant luxury business card. Printed with a letter press printer on heavy, heavy stock with “Hermes” embossed. Brad’s simple card radiates luxury. It looks like the fine card from a billionaire’s private banker. One look and you feel like this guy knows luxury.

CardsStriking images from The “Life of Luxury” virtual tour on Brad’s homepage garnered extra points for him by setting the tone of his website.

Effective local networking with other luxury agents was another aspect of Brad’s entry. Not only does he send his attractive weekly flyer promoting his properties and reinforcing his luxury designations (CLHMS and Million Dollar Guild), to his consumer center of influence, he includes local luxury agents in the distribution. This helps keep his listings top-of-mind and boosts his showings. His sphere and other agents also receive virtual tours of his properties. Tours are also posted on facebook.

Brad reinforces his personal branding by sending “The High End” magazine to his center of Influence and past clients and customers. Personally branded for Brad, the glossy publication is a constant reminder of Brad and his services. Full page ads in private school directories and Hermes branded water bottles were other aspects of Brad’s marketing which appealed to the judge.

Best Agent Market Report was captured by George Harvey of The Harvey Team in Telluride (CO).  Our judge reviewed George’s submission and concluded, “George’s annual market update reports are easy to read and understand. They are presented nicely, both in print and online. They are comprehensive and use a clean, simple format which allows for quick interpretation.  But the thing that struck me the most was the warm, charming, and inviting tone.”  

TestimonialsThe language used is "cut-to-the-chase" straightforward, but simple and friendly too.  Anyone can "run the numbers" but it takes true expertise to distill complicated market data down to simple insights and present them in a way that makes you feel like you are enjoying a fire-side chat with a friend.   There are two very powerful words to describe this: Expertise and Authenticity.  

The Outstanding Personal Achievement Award is granted for either personal or professional achievement. Last year’s winner was Ed Kaminsky with Shorewood Realtors in Manhattan Beach (CA). Ed’s professional accomplishments led to the award.

SegmentsAfter ranking #2 in all his company’s award categories from 2003 to 2009, Ed finally broke through to #1 in the company in transactions, commissions earned, and sales volume as of 2010. Impressive; however, it was Ed’s focused marketing on three distinct market segments, using three different brands, that really caught the judge’s eye.

Under Ed’s “family of companies,” he has his regular real estate practice, branded as ITZ SOLD. He also does auction business through his Premiere Estate Auction Company and has created a network of agents specializing in sports stars through his SportStar Relocation venture. In short he works three niche markets successfully, all three of which tie to his luxury property focus. 


The Inside Scoop on the Luxury Home Market in Silicon Valley

In our previous post we looked at some of the current market stats for Silicon Valley.  

Statistics are one thing, but for an incredibly unique market such as the Silicon Valley where a high percentage of luxury homes never even hit the MLS, having the insider’s view and contacts is of paramount importance. 

Dawn-Thomas-2011[1]That’s why we turned to Institute for Luxury Home Marketing member Dawn Thomas, broker associate at INTERO Real Estate Services and Founder of The Dawn Thomas Team to give us an up-to-the-minute pulse of what’s happening in her market.

What’s the typical starting price of your market:

DT – Everyday home prices are in the $1.5 million to $2 million range. The starting point for luxury homes is around $3.5 million. On the flip side, the highest priced home sold in either San Mateo or Santa Clara county so far this year is $15.3 million. Last year’s most expensive sale was $100 million.

How would you describe the pulse of your market?

DT – Days on market is trending better and we’re seeing prices increasing – not skyrocketing, but increasing. And we’re also seeing a lot of foreign investors. In fact, I have one buyer who is ready to purchase and will spend up to $40 million for the right property that he can pass on to future generations.

With that being said, this is also an election year so there are a lot of variables.

High-end homes are moving if presented well and there is no shortage of money here, but inventory is short.

What issues do you see that are impacting your market?

DT - The low capital gains tax that the Bush Administration put into affect is likely going to be over at  the end of the year and another issue is the 3.8 percent tax increase for health care (for more information on its impact to real estate transactions, click here) that will have an impact on both real estate purchase and sale decisions. I’ve actually had clients ask me about these issues, and from discussing this with other agents, these are definitely things luxury buyers and sellers are aware of.

Did Facebook’s IPO increase higher prices in your market or have the positive impact the media seemed to indicate it would?

DT – (Laughing) I wish I could say that all the hoopla about this did make a difference, but from what I can tell, I don’t think it really did. First of all, many of the people at Facebook are Gen Y’ers. And a lot of these employees live in the city and aren’t interested in luxury homes. They don’t want 10,000 square foot homes – they want smaller footprints with higher-end finishes. Additionally, many of these people can’t unlock their proceeds from the IPO until six months following the public offering – and this won’t occur until more towards the end of the year. The real truth of the matter is the Facebook frenzy just didn’t happen.


Silicon Valley’s luxury home market – up, down or sideways?

Has the recent Facebook IPO driven this market’s luxury home prices off the charts as some expected?

Data from our ILHM Luxury Market Report shows that prices since spring are strongly up, but recent moves suggest that the upward trend in prices might soon be stabilizing, if only for a moment.  Not quite a Facebook frenzy.  

PriceNote the plateau in 7-day price trend
as well as the fact that that current asking prices are
significantly higher than they were this time last year.

The number of currently listed luxury properties with price reductions is trending up, as is days on market and inventory.  These should all serve to dampen prices a touch, but note that all of these measures are all still low compared to this time last year, so in no way is this "bad" news.  What we are seeing are the dynamics of seasonality and supply & demand playing themselves out in a relatively healthy market.  In fact, Silicon Valley continues to be one of the stronger luxury markets nationally. 

PriceReduced  
DOM
Inventory


Charts and graphs aside, in one of our next posts, we’ll be giving you an insider’s view on what’s happening in the Silicon Valley market when we talk to Dawn Thomas - Broker Associate of The Dawn Thomas Team of Intero Real Estate.

Stay tuned.


FAST FACTS about the world’s wealthy: Where in the world will you find the wealthy?

While three countries – the U.S., Japan and Germany – account for more than 53% of the world’s population of High Net Worth Individuals (HNWI), you will find wealthy households all across the globe. 

Look at the distribution by region, and the Asia-Pacific region is home to more HNWI’s than any other region with 3.37 million HNWI. North America is close behind with 3.35 million HNWIs. Europe boasts 3.17 million HNWIs, largely due to increases in Russia, the Netherlands, and Switzerland. The comparable statistic for the Middle East is 2.7 million.

HNWIs

 

Where are the world’s second home buyers most likely to come from?

Obviously this will differ based on a specific market. For instance, Orlando might get British and German second home buyers, Miami may have many from Latin America, Vancouver may attract Chinese, while Phoenix might attract Canadians. However in sheer numbers, buyers from the following countries top the list of purchasers worldwide:

  • Russia
  • Hong Kong
  • Britain
  • France 
  • Switzerland 
  • U.S.A. 
  • Germany
  • China
  • Singapore
  • Canada

FAST FACTS about the world’s wealthy: The wealthy are back and ready to buy real estate

If you are seeing an increase in luxury buyers in your market, there are at least two good reasons why.

  1. The number of worldwide wealthy has recovered from the 2008 downturn, when the number of HNWIs plummeted from 10.1 million to 8.6 million in just one year. The current HNWI number has risen to a record 11 million

    Total wealth controlled by wealthy households has also increased since a five year low point in 2008, rising from $32.8 million to $42.0. 

    These statistics from The Capgemini/RBC World Wealth Report for 2012, offer good news for luxury real estate since demand for homes depends heavily upon the number of households who can afford them.

     
  2. The post-recession affluent are also in a home shopping mood. Research done last year by Barclay's found that 57% of HNWIs want to increase their residential property portfolios in 2012. This buying attitude is most likely a result of lifestyle desires as well as the view that residential real estate is an investment opportunity and smart portfolio play. 

    Here’s what one billionaire has to say about buying luxury property now. 

    “Trophy (property) assets are probably the most resilient and successful investment options at the moment, and will be for the foreseeable future.” 

    --John Caudwell, Billionaire , 2012