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August 2013
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October 2013

September 2013

Cash is King!

Home sales are rising, largely driven by low inventories, rising consumer expectations, and shrinking distressed inventory.  But wait, aren’t low interest rates the number one factor in increasing property sales?  New research from Goldman Sachs indicates low rates may be slightly less important than many think.

Many buyers are reaching into their pockets to purchase homes with cash.  Goldman Sachs estimates that between 1st quarter of last year and 1st quarter of this year, a whopping 57% of residential sales were all-cash transactions.  However, in a real estate market where the total number of deals is rising, this still leaves room for an increasing number of mortgages for home purchase.  According to just released Federal Reserve data for 2012, the number of loans made to people actually buying homes (as opposed to refinancing), increased by 13%, compared to 2011.  This represented a five year high. 

The Goldman Sachs’ analysis estimates that around 20% of all homes sold before the housing downturn were all-cash sales (approximately 30% of sales by dollar volume).  But over the past seven years, a flood of money into the housing market has resulted in the all-cash share of sales more than doubling.

Whether your customers prefer to buy using a mortgage, or by paying all-cash, the good news is they’re buying!

Luxury in London

The Luxury Property Show
Interested in showcasing a stunning beachfront home in the Caribbean?  How about purchasing a luxury apartment in New York or London?  Looking for a buyer for your French chateaux or lake retreat in Australia?  The Luxury Property show held in London next month vows to present exceptional luxury properties, while putting on an amazing event.

This year’s show will be held at The Hurlingham Club, October 29-30, 2013, and promises to offer incredible sales opportunities for attendees.  Past showcases have attracted thousands of wealthy buyers, with the show focusing on drawing the leading property companies from around the world.  With networking events, interactive seminars and impressive exhibitions, The Luxury Property Show is set to be quite an event!

To take a look at the full show information, along with sponsorship and vendor opportunities click here!

400 Richest in U.S. Worth $2 Trillion

Forbes 400
According to new research from Forbes, The 400 richest people in the U.S. are now worth a record total of $2 trillion.  Entry into this prestigious group starts at a net worth of $1.3 billion, while the average net worth of the group is $5 billion.  Topping the 400 Richest list for another year was Bill Gates, with a net worth of $72 billion.  Warren Buffett ranks as the second wealthiest American with $58.5 billion - despite having given away about $1 billion last year.

In a recent column, CNBC Wealth reporter Robert Frank offers some perspective on how much $2 trillion really is, starting with the fact that it is “more than the combined net worth of half of all Americans. The bottom half, of course.”  Here are more of Robert’s comparisons:

  • $2 trillion would pay for all of the existing home sales in the U.S. in 2012 and 2013 year-to-date!
  • $2 trillion is more than the annual GDP of Italy, Mexico or Canada.
  • $2 trillion is equal to the Federal Reserve's holdings of publicly traded U.S. Treasuries.
  • $2 trillion would fund all government spending through July of this year.
  • $2 trillion is equal to about two-thirds of all taxes to be collected in the U.S. for 2013.

Number of World’s Ultra-Rich Hits All Time High

According to the new “Wealth X and USB World Ultra Wealth Report,” during 2012, the world’s Ultra High Net Worth (UHNWI) population reached an all-time high of 199,235 individuals with a combined wealth of US$27.8 trillion.  The increase in the number of ultra-rich bodes well for the upper-tier real estate market.

The authors of the report define UHNW individuals as those with a net worth of at least $30 million (excluding shares in public and private companies, real estate investments, investments of passion, and personal residences).  The average wealth of an UHNW individual has risen to US$139 million, up US$1.8 million from last year.  Within this ultra-wealthy group are 2,170 billionaires across the world who hold 23% of the world’s UHNW total wealth.

Despite the recent economic downturn, the U.S. is home to 65,505 UHNW individuals, an increase of 7.9% over the previous year.  Canada has 4,980 UHNW individuals, a number that remained relatively flat year-over-year.

The global UHNW population continues to be dominated by men, who form 88% of the total population.  Female UHNW individuals make up the remaining 12%, or 23,505 individuals globally. Self-made individuals, form 65% of the population and outnumber individuals who inherited their wealth.  Note the most common job titles shown in the accompanying chart.

For more information, see the full report.

The United Kingdom: “A nation of estate agents?”

If you think competition is stiff in the U.S. real estate market, where the ratio of Realtors® is approximately one agent for every 317 people, be glad you aren’t competing in the United Kingdom.  

According to a report in the Guardian newspaper, a record number of people work in British estate agents’ offices and the real estate sector is growing so fast that official figures show it was the fastest growing part of the U.K.’s national workforce in the three months ending in June.

Between March and June of this year, the count of real estate workers jumped 9.9%. Last year, the number joining the industry was a whopping 77,000.  The U.K.’s Office for National Statistics said that 562,000 people are now employed in real estate in the UK, the largest number since record keeping began in 1978.

"We're no longer a nation of shopkeepers – we're becoming a nation of estate agents," said Danny Gabay, director of economics for Fatham, a consulting firm.  His comment is right on target, there is one real estate worker for every 113 people in the U.K.  Now that’s competitive!