The Real Estate Deal
Editor Cindy Zetts dishes on real-estate and development around Puget Sound: She lived in apartments, townhomes and houses -- a dozen of them in four states -- before settling in the Seattle area in 1997. After taking a bath on the sale of her first home, in South Florida, she vowed to wise up about real estate. She bought a house in Covington 10 years ago because, well, she could afford one there.
November 10, 2008 3:10 PM
Luxury real estate is slower to sell, too
Posted by Cindy Zetts
From elizabeth Rhodes, reporting from the National Association of Realtors conference in Orlando:
ORLANDO, Fla. -- You'd think that all those "Lifestyles of the Rich and Famous" kitchens and bathrooms would sell themselves, but no. Million-dollar homes are languishing on the market as long -- or longer -- than their more moderately priced kin.
So it's no wonder that one of the big topics at the National Association of Realtors convention in Orlando is how to sell big properties with big price tags. There have been a host of well-attended workshops aimed at giving Realtors the tools to move these properties.
The No. 1 rule, apparently, is Know Thy Buyer. From that comes how to reach them.
"You need to be more techno savvy than average to get these people," said Laurie Moore-Moore (yes, that's really her name), founder of the Institute for Luxury Home Marketing. "As wealth goes up, so does technology use."
She mentioned research showing that those who make $250,000 a year or more spend an average of 27 hours or more online every week.
Luxury homes marketed online must have very upscale ads, with professional photography, expensive-looking typography and text that targets the lifestyles of the buyers.
Thanks to the Internet, foreign buyers can easily search out luxury properties, and they're doing so, said George Harvey, a Realtor in the pricey resort destination of Telluride, Colo.
"Who's got the money is the big question," Harvey said. "Seventy-five percent of the world's wealth is held outside the U.S. Foreigners look to the U.S. for the stability of our economy."
That might sound odd to Americans who've seen their house and stock prices take a drubbing recently. But our turmoil pales in comparison to what's happened in countries where political instability has lead to runaway inflation and the collapse of the local currency. Argentina in 2001-02 comes to mind.
Harvey told an interesting story about a Russian buyer who made a killing in the fertilizer business. Last winter that Russian paid $11 million -- cash -- for a house in Aspen, Colo. The next week he found another Aspen house he liked better, so he bought it, too. For $37 million. In cash.
Then there's the London hedge-fund manager who paid $175 million last year for a Colorado ranch. Because of the British pound's strength against the dollar, the Londoner essentially paid half price, Harvey pointed out.
"There are a lot of people in the world who have created wealth, and they're looking to the U.S. because of stability and panache," Harvey said.
The top six countries of origin of international buyers are, in order: Canada, United Kingdom, Mexico, China, India and Germany, according to a recent National Association of Realtors study. Three quarters of them buy a single-family home. Or homes.
As of Sunday, the Seattle metro area was well-stocked with luxury homes for sale. There were 1,657 of them with a median price of $1,109,276, an Institute of Luxury Home Marketing report revealed.
The average days on market are 113 in Seattle, well below Miami, where the median-priced luxury home is almost twice as expensive and takes nearly twice as long -- an average 220 days -- to sell. The New York City area has the highest median luxury home price at $3,646,634, but buyers get a lot for their money. The median square feet of those luxury digs is 4,557, compared with 3,228 in Seattle.
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