0
0
0

The Formula for Success in Luxury Real Estate

by Chicago Agent

Affluent Patterns

The luxury home market has been on a slow, sustainable path to recovery for the last two years, and from the perspective of Laurie Moore-Moore, the founder and CEO of The Institute For Luxury Home Marketing, it has fallen and risen on the wealth of the affluent.

“As the recession began, the number of wealthy (people) went down, and it went down pretty substantially,” Moore-Moore says. “The number dropped about 27 percent, and so there was a big decline in the number of wealthy; and of course, of the wealthy that remained, many of them saw a decline in their portfolios.”

Thus, home sales in the luxury market suffered, but beginning in 2010, Moore-Moore says that the number of “high net worth individuals,” as she calls them, and the strength and dexterity of their finances, began to rise, and the demographic is now back to pre-recession numbers, a development that spells nothing but good news for luxury agents.

“It is the number of wealthy and how wealthy they feel that drives the luxury housing market,” Moore-Moore says, “and today, what we are seeing is that the luxury consumer is definitely back.”

Moore-Moore’s comments are verified by the statistics gathered by her institute, which studies the myriad ZIP codes in all of the nation’s top metropolitan areas and, upon pinpointing each area’s top 10 codes, graphs several composite readings of the market’s performance. In Chicagoland, nearly every measure of the area’s luxury market is showing strong gains: prices, which bottomed in December of last year at $1.31 million, have mostly been rising ever since, and at press time, stand at $1.34 million; inventory, which peaked at roughly 1,270 units in August 2011, has fallen dramatically to approximately 990 units; and, perhaps most importantly, price reductions have stalled considerably, with Chicago’s luxury agents currently reducing listing prices by 29 percent, nearly 10 percent less than October 2011.

Pricing has factored heavily in the business of Jeannie Emmert. A Realtor with Coldwell Banker Residential Brokerage, Emmert is a 35-year resident of Lake Forest who has sold real estate in the area for 20 years, and as she tells it, pricing in her market has finally reached an attractive level for buyers. In addition to the five Lake Forest homes that sold in 2010 that were priced higher than $3 million, from Jan. 1, 2011 to date, the area saw 23 properties close.

“That’s huge,” Emmert says. “That shows a lot of activity, and that’s a real adjustment in price.”

The catalyst for that sales activity, Emmert says, was a $5.5 million sale of hers (the home pictured on our cover, actually, that’s now back on the market) in early 2011, which, at the time, was the highest closing in Lake Forest and Lake Bluff in two-and-a-half years. Though the buying and selling euphoria of the boom years – when homes could list near the $10 million point and sell the very next day – is a thing of the past, Emmert says the sale was a clear wake up call that luxury buyers were re-entering the market in force, and that though prices were still soft, they were at a visibly appealing level for affluent buyers.

Read More Related to This Post

Comments

  • Renate Meyer says:

    Very true…..Finding the unique aspect of the property is important and needs to be emphasized. Finding the unique aspect of the buyer is just as important.

  • Mark says:

    We’re following the luxury property market in the US with interest – it’s an interesting comparison to the luxury property market here in Australia. We find building brands around each of our properties – and highlighting their unique attributes – to be very important as well

Join the conversation

New Subscribe

  • This field is for validation purposes and should be left unchanged.