Lavish. Affluent. High-end. Exclusive.
Those are just a few of the words that people who responded to Inman’s survey about luxury home buying and selling listed as preferable alternatives to “luxury,” a term that tends to raise hackles in certain circles.
Are you at Inman’s Luxury Connect event? If not — watch it via live stream.
Whatever you call it, the high-end market is an integral part of the real estate industry, though not without its own struggles.
According to our survey, 39.42 percent of respondents said that global economic events have hurt luxury real estate, which leaves us wondering: What events specifically do you think have contributed to this downturn? Are we still suffering from 2008, or are we just starting to feel the sting from the economic crisis in China?
Over the course of 10 days, 208 people responded to this survey. Below are some of the more illuminating responses that we received.
What qualifies as luxury?
With 29.81 percent of the total, the $2 million to $5 million mark is the most popular starting price point for luxury properties. The next range, $1 million to $2 million, is not far behind at 25.96 percent.
A small segment of respondents (3.85 percent) said that $20 million was the starting price point in their market. What’s the demographic for a client buying or selling a $20+ million home? Among our respondents who said this was their starting point, 62.50 percent said their clients were from the Middle East, and 75 percent said they came from new money.
What motivates luxury buyers?
Location, location, location. The response to “what motivates luxury buyers” was overwhelmingly “living in the right neighborhood,” with 69.71 percent of the vote.
A popular write-in response was acquiring vacation property, specifically lake- or oceanfront.
How would you describe the values of luxury homebuyers?
We have a tie! “Conservative” and “tough negotiators” were the first-place choices for terms to describe luxury homebuyers’ values. “Cautious” and “modest” were also popular responses, which begs the question: Are there any gamblers out there playing the luxury field? Apparently there are a fair amount, with “risk-takers” coming in with several votes, too.
What are luxury home sellers most worried about?
Not surprisingly, value and price rank highly among the things luxury homesellers worry about (27.40 percent and 24.04 percent, respectively).
On the other end of the spectrum, commission rate is of seemingly little to no concern, with only 1.44 percent of the vote.
Commission negotiation: What’s the story?
Does the stereotype that high-net-worth clients are tougher negotiators than the average client hold true? According to an overwhelming 62.98 percent, no.
It’s interesting to note that for those respondents who said their clients weren’t any more forceful in their negotiations than other sellers, 56.49 percent said their clients are 40 to 50 years old, conservative (58.78 percent) and paying cash (51.91 percent).
Do your clients ask about listing off-MLS?
When it comes to pocket listings, 27.40 percent said that their clients do ask for off-market listings, 29.81 percent said they don’t, and 42.79 percent said clients sometimes ask for this.
For those clients who do ask for pocket listings, the reason why was overwhelmingly “privacy” (73.08 percent).
Can any type of agent successfully sell a luxury home or represent a luxury buyer?
If you’re thinking that anyone can just jump into the luxury game, think again. The answer to this question was a resounding “no,” with 68.27 percent of all respondents. So what does it take to be a successful luxury agent?
Luxury and technology
When it comes to technology, high-net-worth clients have high expectations, and they look to their agents to utilize several different tools and methods.
Among the most popular were digital advertising (72.12 percent), email (71.63 percent) and video (63.46 percent). Not as important to clients: ads on portals (23.08 percent) and 3-D (18.27 percent).