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December 2012
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February 2013

January 2013

Not Your Average Snow Fort

Harbin Ice Castle

You may not be able to list and sell these massive, imaginative snow creations, but they sure are pretty to look at and in some cases very functional!  This Old House Online recently showcased 14 of the world’s craziest frozen structures, ranging from colossal castles to working ice hotels

Each of these ice and snow properties required expert teams of designers, planners, and winter technic ians to construct their unique and astounding features.  One castle in particular was over 20 feet tall – those working on the structure who have been practicing the art of snow castle building for “only” five years are called snowprentices— the structure was so sturdy, pictures were hung and displayed on its walls.  Many of the showcased properties were presented at festivals and annual events; drawing in large amounts of tourists, as well as locals alike.  One of the most fascinating constructions featured was the Hotel de Glace, an ice hotel in Quebec, Canada, which was the first hotel in the world to offer beds made completely out of ice! Artic sleeping bags are included of course.

Hotel de Glace
Similar to the style of luxury homes, these creations possess a uniqueness and exhibit special characteristics, including individual lighting and design features. And, while they may not be on the market, they sure are a site to behold! Take a look!


The Dos and Don'ts of Kitchen Design

HouseBeautiful
Even if you don’t remember harvest gold appliances and green shag carpet, you know that kitchen design trends come and go. While kitchen layouts have certainly begun to change –as we discussed in our previous blog entitled “Kitchen Sprawl”—designers have also begun pinpointing what they consider to be the “dos and don’ts” of creating a perfect kitchen.

House Beautiful readers have identified eight kitchen design trends they would like to see disappear, in addition to explaining what should be done instead.

Are your buyers hoping they won’t find the features House Beautiful readers identified as less than desirable in the homes you are showing?  What do you think?


U.S. $1 million market ends year with a burst of activity

According to the National Association of Realtors, sales of homes priced at $1 million or more jumped 51% in November, compared with a year earlier.  As the fiscal cliff approached, many sellers concerned about the anticipated capital gains tax increase and the 3.8% surtax on investment income of high earners as part of the Affordable Care Act, rushed to close home sales before year end.

It remains to be seen what impact this might have on 2013’s sales.  The good news for demand is that interest rates remain low, foreign buy interest remains high, and last year’s fourth quarter sales activity has reduced luxury home inventory, which may bode well for prices.


Dubai real estate market heats up again. Is it a recovery?

Rashid City
After the real estate downturn sent the Dubai real estate market into a tail spin with prices dropping by 50% at the worst point, the property market appears to have finally begun to turn around.  The market resurgence is caused in part by investors from the Middle East and South Asia (especially India) who are looking for a safe haven to park their money.  Evidence of recovery was given a further shot in the arm by several new luxury property developments, some of which sold out in a matter of days.

Recent statistics show that the number of property transactions in the emirate jumped 50% in the first half of 2012 compared with a year earlier.  Villa prices in prime parts of Dubai rose 19.9% in the first nine months of 2012, which is double the rate of growth seen in prime central London’s prices over the same period, according to property consultant Knight Frank.  Overall, inflation-adjusted prices increased 14.43% in the first nine months of last year, according to Global Property Guide.

As further evidence that there is local confidence in the strength of the recovery, the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, Dubai Holding and Emaar Properties, plan to develop “Mohammad Bin Rashid City.”  Referred to by local media as “a jaw-dropping project,”  the new development will include a park roughly the size of New York City’s Central Park (843 acres), a family entertainment center created by Universal Studios, and the "Mall of the World,"  a retail complex that can accommodate 80 million visitors a year.  The complex will also include art galleries, golf facilities, more than 100 hotels, plus residential areas.

Although Dibai’s market activity is encouraging, there are also downside risks, according to a recent report by Citi Research. "We caution against early signs of exuberance, such as the re-emergence of off plan sales and the risks of excessive supply given some of the recently announced projects. Such exuberance could undermine not only the sustainability of the real estate recovery but lead to dislocations in the wider economy as well," the Citi report said.  In other words, the beginning recovery could go off track.


Trulia economist predicts “Healthiest Residential Markets” for 2013

Seattle
Chief Economist Jed Kolko of Trulia has created the list of what he believes will be this year’s ten healthiest U.S. residential markets.

According to The Wall Street Journal’s MarketWatch, Kolko focused on the “solid fundamentals” or predictive factors which he believes will cause these residential markets to outperform others.

Kolko’s predictive factors and information sources:

  • Strong job growth – Bureau of Labor Statistics
  • Low vacancy rates – U.S. Postal Service
  • Low foreclosure inventory – RealtryTrac

 The 10 Healthiest Residential Markets for 2013

  1. Houston, Texas – strong job growth
  2. San Francisco, California – strong job growth
  3. Bethesda, Rockville, Frederick, Maryland – very low foreclosure inventory
  4. San Antonio, Texas – low vacancy rates, relatively stable home prices during the bubble /mild price declines
  5. Austin, Texas – strong job growth
  6. Seattle, Washington – strong job growth and low vacancy rates
  7. Omaha, Nebraska – relatively stable home prices with “mild’ price declines during the bubble
  8. Peabody, Massachusetts (North Boston Suburb) – low vacancy rates and strong job growth in nearby Boston
  9. Ft Worth, Texas – mild price declines during the housing bubble
  10. Louisville, Kentucky – mild price declines during the  housing bubble

Trulia

What do you think?  Are these the markets most likely to be top performers?  Are there others you think will be peak performers or market laggards?  Give us your comment.


Top Destinations for U.S. Retirees

Ecuador

Wondering where your retiring clients might be considering moving for their golden years? Here are some places you might want to know more about and where you might want to start developing referral relationships.

A recent article in the Financial Post reports that Ecuador has been ranked -- for the fifth consecutive year -- as the top foreign retirement destination for U.S. retirees. Low cost of living, friendly culture, lovely climate and closeness to the U.S. are among the reasons cited for Ecuador beating out other countries including Mexico, Costa Rica and Panama. A close second, Panama was cited for having many retiree discounts, and making it easier for expats to acquire a visa.

Many factors contributed to the compiling of this list, including property prices, retirement infrastructure, ease of integration into the country, cost of living, as well as benefits to retirees. Spanish speaking countries like Mexico, Costa Rica, Uruguay and Spain ranked high on the list, with only two Asian countries being named; Malaysia, breaking into the top 5 for its cheap rent and tropical climate and Thailand making the top 10 due to its affordable outdoor lifestyle. A few EU nations could also be found among the 22 countries listed, including Ireland, France, Portugal and Italy. The Philippines, New Zealand and France rounded out the list, and were said to have the highest cost of living, but an attractive ease of integration.

It seems likely that many U.S. consumers may focus on finding their retirement properties in one or more of these countries. So whether your clients are looking to retire in a tropical climate, or want the most bang for their retirement buck, focusing on cultivating real estate relationships in these areas seems smart. Read more…


Crystal Ball View of 2013…Looks Much Like 2012.

2013Fireworks
Wondering what the new year will bring to the luxury housing market?  We are guessing it will look a lot like last year.

Five years ago the recession sent the U.S. housing market into a tailspin. Happily, 2012 appears to have been a turnaround year for the residential market; however, the recovery can still retreat into a false start due to financial and political issues -- including the uncertainty created by deficit issues, an expected increase in the capital gains tax, and the Dodd Frank Act (which sets new mortgage standards as of January).

The luxury home segment has led the recovery, beginning in 2011 in many markets.  One major driver of luxury market activity has been the increase in the number of wealthy U.S. households.  The start of the recession saw the number of High Net Worth Individuals (HNWI) -- those with a million or more in investible assets, not including their personal residence -- drop dramatically. Consequently, the luxury home market cratered. However, this affluent group recovered their wealth quickly and many focused on residential real estate as a desirable asset.  For some, a second or third home was both a lifestyle purchase and a portfolio play.  Record low interest rates and the perception of bargain home prices were also purchase motivators for the affluent.

As a result, the luxury market in many areas enjoyed increased activity in 2011 and in 2012.  For instance, California is often considered a bell weather state and it was one of the hardest hit geographic areas in the downturn. According to DataQuick, in the second quarter of 2012, million dollar home sales in California were up 10.3% above the same quarter the previous year.  This was the highest level of million dollar sales since the third quarter of 2007.  One of the strongest luxury market recoveries occurred in Miami where, according to Knight Frank stats, the luxury home segment saw a jaw-dropping 35% price increase over a two year period ending in September, along with declining inventory levels.

While U.S. luxury purchasers are active, a major driver of the luxury market is the wealthy international buyer.  Foreign demand for U.S. homes has grown, as has the diversity of the foreign buyer prospects. The factors which influenced foreign luxury home demand in 2012, are still at the top of the list as influencers for 2013.   

  • Wealth creation.  As wealth rises, especially in emerging countries, the number of prospects shopping for prime residential properties grows.
  • The flight to safe haven.   The U.S. is considered a stable, safe place to invest.  For those who wish to move assets out of their home countries, the U.S. has special appeal.  For some, physical safety for themselves and their families is also a consideration.
  • Currency fluxuation.  Although home prices slipped when we went into recession, the home price decline is aggravated when some currency exchange rates are considered.  In short, the bargain prices brought by the recession were discounted further for some foreign buyers.
  • The desire to own prime property and enjoy a desirable lifestyle.  Lifestyle is a powerful motivator.  Trophy homes in desirable areas have great appeal and supply is limited.

Where foreign buyers come from depends upon the market.  Brazilians, Venezuelans, and Argentinians continue to flock to Miami along with Germans and Italians.  Australians and Brazilians are boosting the Aspen market.  Russians, the British and French are joining Wall Streeters in the New York Hamptons. Watch for Chinese buyers at the very, very top of the U.S. luxury market, especially in New York.  Eastern Europeans are also popping up as prospects in some U.S. markets.  Across all price points, Canadians still rank as the number one foreign buyers, followed by the Chinese.

All in all, without a fall off the U.S. debt cliff, a tidal wave from the Euro crisis, or an unpredictable black swan event, the luxury home market should continue to be healthy (and perhaps even grow) in 2013. If you are wondering just how big this market segment is, the $500,000 and above market represents 10% of sales and the $1 million and above market is about 1.6% of sales.  Luxury is a small, but desirable market niche and this is a good time to fine tune your luxury strategy or target the luxury segment if you aren’t already.