Beverly Hills, Aspen had highest volume of luxury real estate sales in 2012: report

Aspen Real Estate sales news according to this article from Luxury Daily. 
Barring New York, the Beverly Hills, CA, market had the highest volume of real estate sales that started at $10 million in 2012, according to the 2013 Coldwell Banker Previews International Luxury Market Report. Other cities that ranked high in terms …  Click here to read the full article.

Best to you,
George

Barron’s Lists America’s Best Retreats for a Second Home

I read this blog post recently and wanted to share it with you.  There is also a  list of the Top 20 Best Retreat locations listed.

Is your region on the list?

Barron’s Names Jackson Hole, Wyoming #1 To Own A Second Home
This week’s issue of Barron’s magazine features The Best Locations in America for a Second Home, where Grand Teton National Park Jackson Hole is ranked …
www.jacksonwyomingrealestate.com/…/Barrons-Names-Jackso…

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

Thought this was interesting information and wanted to share it with you!
George

Posted on Luxury Insights
Posted: 11 Jan 2013 10:11 AM PST

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 Dubai’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.

Crystal Ball View of 2013…Looks Much Like 2012

According to a recent article on Luxury Insights blog:

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.

Just how big is the second home market?

Another article that you may find interesting from Luxury Insights:

Just how big is the second home market?
Posted: 29 Aug 2012 05:04 AM PDT

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.

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.

Living the High Life

From the WSJ LunchBreak: Living the high life
Posted by Waco Moore on Luxury Insights
Date posted: 17 Aug 2012 11:28 AM PDT

A peek at the trend of super-tall buildings for super-rich residents …read more

The Inside Scoop on the Luxury Home Market in Silicon Valley

Re-posting after finding this on Luxury Insights.
Hope you find this of interest,
George

Date Posted: 10 Aug 2012 07:33 AM PDT

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.

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.

Where in the world will you find the wealthy?

Read this on Luxury Insights – thought it was interesting enough to share with you!

FAST FACTS about the world’s wealthy: Where in the world will you find the wealthy?
Posted: 03 Aug 2012 07:55 AM PDT

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.

 

 

 

 

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

The Wealthy are Back and Ready to Buy Real Estate

I read this article today at Luxury Insights:

FAST FACTS about the world’s wealthy: The wealthy are back and ready to buy real estate.
Posted: 01 Aug 2012 07:49 AM PDT

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

Warren Buffet says “Buy”

I read this article in Luxury Insights and thought I’d like to share it with you.

Warren Buffett says “Buy”
Posted: 30 Jun 2012 01:06 AM PDT
Good information for your investors

Just ask the Oracle of Omaha, billionaire Warren Buffett about residential real estate as an investment. He recently told CNBC that distressed single-family homes were one of today’s best investment opportunities, saying, “…It’s a leveraged way of owning a very cheap asset now and I think that’s probably as an attractive an investment as you can make.”

If you work with residential investors, whether they are buying distressed homes or looking for other good value residential properties with potential as rentals, here’s a recent analysis which may be useful. In a study sponsored by HomeVestors of America, Inc.® (known as the We Buy Ugly Houses® company), Local Market Monitor analyzed over 300 cities before identifying the top 10 for residential rental investments, as of second quarter of this year. For additional cities and more explanatory information on the analysis, see the Local Market Monitor press release.

Not working with investors? The projected growth in median price is good information, too.