Recognized luxury leaders in Beverly
Hills, Santa Barbara, San Francisco,
Vancouver, Newport Beach,
Vail, Houston, Dallas, Atlanta, the
New York City suburbs, Washington,
Sarasota, Miami and Boston
are consistent in their year-end
analysis of the 2013 luxury market,
citing sales increases of 10 to
30 percent, depending on location,
due in part to price appreciation.
As the year closed, the $1 to $2
million tier of the market was very
active, and most anticipate it will
continue to be so due to a shortage
of inventory, often with multiple-
offer situations driving prices
upward. The higher tier of the market—
more than $5 to $7 million in
most areas—generally is still experiencing
longer days on market.
In most luxury markets, a healthy
number of sales are all-cash transactions,
as high as half or more in
some markets. Wealthy consumers
have ready access to cash and are
willing to use that as leverage to
negotiate well-priced real estate
purchases, while foreigners from
countries with less economic and
political stability also see U.S. real
estate as a safe harbor to invest
cash.
International buyers continue
to be active, particularly in San
Francisco, Los Angeles, Vancouver
and Miami, where 60 percent of
all luxury real estate is being sold
to non-U.S. residents, mainly Latin
Americans and Europeans. The mix
of foreign buyers includes those
from Saudi Arabia (Orange County
and Texas oil-and-gas markets),
South America (Florida and Texas)
and the EU, while Asian buyers—
particularly the Chinese—continue
to be a signifcant force, especially
in San Francisco, Vancouver and Southern California. Luxury Portfolio
International brokers report a
trend in Chinese buyers gravitating
toward properties in the $1 million
range, prefering new construction,
though those investing for children
attending U.S. colleges generally
are looking for lower priced properties.
Agents who go the extra mile
for these buyers are earning signifcant
residual sales through repeat
business and referrals to friends
and family.
Interestingly, Chinese buyers may
do research on the Web, but they
do not necessarily make contact
online, preferring to keep confdential
their desire to invest in foreign
markets. This concern for privacy is
borne out in Manhattan, where the
condo market is being driven more
aggressively by international buyers
than the co-op market, in part
due to the rigorous interview process
and requirements for fnancial
transparency.
In recent recessionary years,
many affuent buyers became more
focused on design/interiors, privacy,
security and family lifestyle
features rather than ostentatious
displays of wealth. According to
Luxury Portfolio brokers, these values
remain prevalent. While many
still search for bargains, most are
willing to pay for certain features
that are “worth it” to them.
“The mood of our Luxury Portfolio
brokers is upbeat as we move into
2014,” comments Luxury Portfolio
International President Paul Boomsma.
“They believe that well-priced
luxury homes will continue to be in
high demand, resulting in increases
of 10 to 20 percent in volume in
most of their markets, with unit sales
rising 5 to 10 percent. Compared to
a few years ago, that represents a
signifcant improvement.” RE