Luxury Insider: Heavyweights in the City of Lights

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Every year, around the month of April, I like to check on what’s new & exciting on the real estate front in Paris. It’s a barometer of sort in the world of luxury real estate. The City of Lights has always been a top destination for affluent buyers from all over the world and, as such, a microcosm of the global real estate scene at the high-end. I often use whatever data I can collect as a standard by which to judge the buying & selling activity in key metro centers and as a reference to anticipate on the trends in the luxury market.

First, it is worth mentioning that the real estate market in Paris (and all of France for that matter) is a little bit of a zoo. There is little cooperation between the 3,500 or so brokers, which means at least 2 things:

  • Prices for similar properties can vary greatly depending on the market knowledge of the various listing agents.
  • For the most part, agents can only show you what their firm or network actually listed. Meaning that if you knock on the wrong door, you may only see 1 or 2 properties and they may not even be relevant to your needs & means.

Of course neither of these two incomprehensible (for US buyers) drawbacks stop anyone from looking and eventually buying a piece of the French capital. It does suggest, however, that you better do your homework before selecting the broker on whose expertise you will rely. It is not as simple as what HGTV House Hunters International would have you believe.

At the high-end, as it is usually the case in any regional market and in any country, there is only a handful of real players. Among them, the unavoidable “Daniel Feau-Conseil immobilier”, our French partner within the Luxury Portfolio International. They “control” as much as 70% of the listings in Paris over $3M.

According to Charles-Marie Jottras, the President of Feau and a friend, last year was characterized by a very poor start and a great finish, although prices, on average, were down 10% for the year. Sales have increased substantially in the last semester thanks to lower prices at the top end. In 2013, Feau’s transactions, ranged from $1M to $20M, with a couple around $55M.

Overall, a pretty good year, considering how gloomy the real climate was a year ago. We were then talking about the “guillotine tax”, the 75% tax rate that would burden the rich in addition to a so-called “wealth tax”. Enough to scare citizens out of the country!…And that is exactly what happened. About 50% of the Paris properties listed last year in excess of $10M, were put on the market because of the “fiscal exile” of the sellers to a friendlier foreign land where their money would rest and prosper more comfortably.

Now that prices at the high-end are more attractive (by Parisian standards), the market is stabilizing. Foreign buyers, who understand that they are not significantly impacted by the tax hike, are now coming back in force to capitalize on lower prices. Even the French are in the mood to buy again, after having been priced out of the luxury market in recent years.

As we are observing in all US luxury markets, the best quality properties, i.e. those around Paris “Golden Triangle” (avenue Montaigne, avenue Georges V) as well as St Germain-des-Pres, are moving swiftly. Not the case for the “B players” lacking modern amenities or the quality wealthy international buyers demand.

Among today’s buyers for the crème-de-la-crème of Paris real estate, we pretty much find the same people who are also buying in London, New York, Los Angeles, San Francisco, Miami, etc. Buyers from the Middle East are prevalent in the French capital, but the Russians have been busy too (before the Crimea episode I guess), and so have the Chinese.

By the way, Americans are many getting in the race to buy in Paris these days! How can we miss on a “bargain”?


Intero Insider: Home Values Back to Pre-recession Levels in 60 U.S. Metros

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Home values have bounced back to pre-recession levels in 60 of the 300 major metropolitan areas covered in a quarterly market report from Zillow. That’s great news for homeowners, but is already putting a damper on affordability in a handful of those metros – namely, San Francisco, Los Angeles, San Jose and San Diego – where the share of residents’ incomes devoted to housing is already exceeding historic norms.

Overall, home values in the U.S. climbed 5.7% in the first quarter of 2014 compared with the same period last year, averaging $169,800 at the national level. U.S. home values are expected to climb another 3.3% through the first quarter of 2015.

Home values remain 13.5% below their 2007 peak, although the housing recession is now well over for the majority of cities across the U.S.

What does this mean for buyers in sellers in your corner of the world?

If you’re a buyer in San Francisco, Los Angeles, San Jose or San Diego, you are likely going to run into affordability problems as prices and interest rates continue to rise. These are also low-supply markets, which tends to result in extremely competitive bidding situations.

The two best pieces of advice for you right now are to act fast and be patient. In order to act fast when properties become available, make sure you’re pre-approved for a loan, have your down payment ready and all your paperwork ducks in a row. Work with a Realtor who knows the local market and can also move quickly.

Being patient just means that you may be in for a longer ride than you initially expected. Be realistic and don’t compromise your financial situation just to get in the market.

Also in Zillow’s report, we learn that among over 6,700 cities and towns that experienced home value declines of 10% or more during the recession, values in 527 have either fully recovered or are expected to recover by this time next year.

That’s great news for homeowners who may have been upside down on their mortgages or would-be sellers who were waiting to make a move until a rise in values made it possible. This paints a good scenario for these markets for the next few years.

The bottom line is this: overall, our markets have recovered or are recovering well from the post-recession fallout. Some markets are back to crazy-town in terms of prices increases, which reinforces the first rule of real estate never changes: location, location, location.

Sellers overall will have an easier time in the coming years, while buyers in a handful of markets will struggle to keep up.

Stay tuned!


Luxury Insider: A Magazine for Intero’s Premier Properties

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This month marks the release of the 11th issue of The Intero Prestigio Magazine.  Composed of some of the finest luxury estates Intero has to offer, this Prestigio Virtual Magazine gives you a glimpse into the world of high-end properties.  Since it is an online piece, feel free to enjoy it at your leisure, whenever you can take the time to relax and open your eyes to an album of beautiful homes. This also allows you to instantly share it with friends and family through social media, websites, or email.  Browse through the gorgeous photos and find the property information and unique qualities of each one of the exceptional properties featured.

Prestigio is a division of Intero Real Estate Services specializing in the marketing of high end homes and estates in all relevant markets, whether local, regional, state-wide, national and international. We offer the widest scope of marketing coverage to multiply the opportunities to reach out to the most qualified buyers.

It is wonderful to see how this global high-end marketing program has become the reference in the industry for this type of publication and the standard by which others are judged. The release of our eleventh issue attests of the mark that Intero has established in this prestigious market.  Take a look at the beautiful homes that are the finest in the San Francisco Bay Area and beyond… you just might find your next home!

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View the virtual magazine for yourself here.


Intero Insider: Housing Roundup: A Second Chance, High Earners and Precious Affordability

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With the busiest home-buying season of the year upon us, we thought we’d do a roundup of interesting housing news from the week.

This time of year, it can be easy to stick our heads in the sand and move forward without stopping to get a bird’s eye view of the state of things. Here are some items that point to specific points of the housing spectrum that are worth keeping an eye on.

FHA program gives former homeowners chance to buy sooner

Homeowners who lost their homes to a short sale or foreclosure typically are required to wait three years before being able to purchase a home again with a Federal Housing Administration loan. That number is more like seven years for a conventional loan, though it can vary with special documentation and circumstances.

But FHA’s Back to Work Program allows buyers to purchase a primary home much sooner – potentially as soon as 12 months after a short sale, foreclosure or deed in lieu of foreclosure.

To qualify, buyers will need to document the financial problem that caused their short sale or foreclosure, and show that that they’ve taken steps to re-establish income and credit.

The program is slated to run through September 30, 2016. Details are at the FHA website.

Cities where homeowners have the highest incomes

The metro area of San Jose/Sunnyvale/Santa Clara, Calif., is home to some of the nation’s highest-earning homeowners, with median incomes at $115,297, according to a recent analysis from the National Association of Home Builders.

To compare, the median household income of owner-occupied housing nationwide is $65,514.

The full list of top 10 metros where homeowners have the highest incomes includes:

  1. San Jose-Sunnyvale-Santa Clara, Calif.: $115,297
  2. Bethesda-Rockville-Frederick, Md.: $114,444
  3. Washington-Arlington-Alexandria, D.C./Va./Md./W.Va.: $111,816
  4. San Francisco-San Mateo-Redwood City, Calif.: $110,663
  5. Cambridge-Newton-Framingham, Mass.: $105,786
  6. Bridgeport-Stanford-Norwalk, Conn.: $104,790
  7. Nassau-Suffolk, N.Y.: $102,632
  8. Oakland-Fremont-Hayward, Calif.: $101,124
  9. Newark-Union, N.J./Pa.: $100,067
  10. Boulder, Colo.: $97,690

The builders group also notes that many of the metros with the highest homeowner incomes are also in metros that have some of the highest median home values. Makes sense.

Affordability drops from last year

As home prices continue to rise in many markets and wages stay mostly stagnant, housing affordability has waned a bit compared to last year.

Housing affordability rose from January to February, according to NAR’s latest Housing Affordability Index, but it remains lower year-over-year. Affordability is calculated considering median home prices, family incomes and average mortgage interest rates.

The median single-family home price is $189,200, up 9% from a year ago. Mortgage rates are up a full percentage point from last year, and incomes have climbed only 1.9% in the past year.

Conclusion

See why it’s important to check a lot of news to get a sense of the market? We’re reminded that even as the world becomes more global, housing remains very much tied to local economies and family-level situations. As one segment booms, another reaches for recovery. Overall, things are holding steady in 2014.


Prestigio Magazine Makes The News!

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Check out RisMedia’s article on our newest Intero Prestigio digital magazine.  You’re sure to be wowed with what’s inside.

Top Luxury Estates from Intero Presented in a Mobile Friendly Digital Magazine


Top Luxury Estates from Intero Presented in a Mobile Friendly Digital Magazine

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A new way to experience Intero Prestigio International homes

  Intero Real Estate Services, Inc. is releasing another issue of their Intero Prestigio digital magazine. The digital magazine is a combination of the innovative, tech savvy power of the Silicon Valley real estate company and their division specializing in high-end real estate, Intero Prestigio International. This issue gives you a taste of Pebble Beach living, shows off multiple Atherton estates, entices you with city living in San Francisco and so much more.

The magazine offers enhanced and global promotion for Intero’s most exclusive homes and estates. Designed with ease of circulation in mind, it can instantly be shared through social media websites and email.  As if reading a handheld magazine, online viewers can browse through gorgeous pictures and enjoy articles written by the luxury real estate icon, Alain Pinel.  The digital magazine aims not only to raise awareness of properties offered in the Prestigio collection, but also to exhibit their finest qualities.  This piece only touches the surface of what is offered through the Prestigio marketing program.

Renowned real estate entrepreneur Alain Pinel, Senior Vice President and General Manager of Intero Prestigio International, is the primary mastermind who pioneered and launched Intero Prestigio as part of his goal of expanding Intero’s luxury brand.  From local print advertising to international display, properties in the Intero Prestigio collection have an elevated level of exposure to help them sell quickly and efficiently.

“Technology has linked all corners of the world together on an unprecedented level and it is clear that we are only going to grow more connected,” states Alain Pinel. “We no longer have high-end buyers confining their search for luxury homes to their neighborhood––or even to their own country. Nor are people searching in the conventional ways of decades past. Globalization has been the buzzword for some time now, yet nowhere is it as real and apparent as in the high-end real estate market. We, at Intero, put the puzzle pieces together. That’s why, among a host of innovative tools and services, we created this online magazine to reach the worldwide audience using the digital means that connect us together.”

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View the digital magazine for yourself here.


Luxury Insider: If You Missed The Train, Take The Next One

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The best time to buy a home was in 2012. Too late! That’s OK.

The best time to sell was in 2013. Too late! That’s OK.

There is always another day! Today for instance. Mortgage money is still in record-low territory and, even though sales are slowing a bit, prices are still edging upward. Not a bad situation for either buyers or sellers. Stabilization is a welcome omen. It beats suffering from a drought or from a flood. It’s a win-win.

The first Quarter of the year is gone. The early observations we can make after those short three months differ greatly depending on where you place the magnifying glass on the national map. The main reason for the spotty and erratic business activity in the US, so far, has been…the weather. It seems like every year we blame Winter for messing up business activity. This year though, it has been “unusually unusual”, as much of the country has been frozen in place.

The North-East, in particular, is only now about to start the year – as far as real estate is concerned! With the notable exception of snow-plowing, most businesses took a big hit. Totally different picture on the West Coast, especially in California. There, the snow is behaving in a more respectful way; it falls only where it is supposed to: on the ski slopes! The sun has been generous and the real estate activity has been relatively steady, from the start of January to the end of March.

The saving grace, though, has been a sizeable price appreciation. It kept the sales volume from dipping. The Silicon Valley is a pretty good example of the phenomenon. The analysis of the first Quarter of the year gives a conflicting image. The market is dancing the tango: one step backward (number of sales), and one step forward (price jump), one nearly offsetting the impact of the other….

Look at the stats for Santa Clara County: the closed sales (Single Family Homes + Condos) from 01/01 to 03/31 are down a significant 16.4% from Q1 2013. BUT the average sales price jumped 12.9%! Result? The total volume of sales, from one year to the next, is pretty close.

Same photo in San Mateo County, home to the priciest homes in the country. The unit sales dropped 15.7%, BUT the average sales price took off 19.6%, going from $968,468 to $1,158,460. When you run the totals, you end up with a slightly bigger volume of sales this year, in spite of a drastic loss of sales.

I am not going to surprise anyone by saying that the listings drought we have been suffering from for well over a year, and which is today more acute than ever, is largely responsible for the surrealistic market picture described above. The Silicon Valley inventory of active listings is pitiful. Don’t ask me why, I would get angry. In any case, the bidding wars, with multiple offers over the asking price, are still the name of the game for the strong-hearted buyers.

The only segment of the market where the supply matches –and perhaps exceeds- the demand is the high-end. More listings & more sales. Buyers actually have a choice. Values are up but modestly. The supply & demand mechanism is challenging sellers’ price expectations. The best properties, in prime locations, in top condition and construction, are moving fast. Others are not.

As we noted time & again, the cream of the cream of luxury real estate in the Silicon Valley is very much sought after by foreign nationals, mostly Asian buyers. Their impact is so significant that it can be said that they are the reason why the average sales price, pulled by the top end, has jumped so high and so quickly.

It is another way to say that, more than ever, in a market where listings are down and sales are scarce, real estate brokerages which are looking to keep on growing (or stay afloat) must focus on increasing their share of the high-end market. Those which successfully do it will grow. For those which don’t or can’t, 2014 is going to be a long year.


Intero Insider: Vacation Home Sales Pick Up Steam

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In the market for a vacation home? As many of the nation’s housing markets have recovered and are even booming, we’re now seeing more significant growth in this secondary niche market.

shutterstock_54154945 smallVacation home sales jumped 29.7% to an estimated 717,000 in 2013, up from 553,000 in 2012, according to a new survey from the National Association of Realtors. NAR bases its estimates on responses from households and excludes institutional investment activity.

The numbers show vacation homes as a niche housing market that’s been growing and still has room to boom even more. NAR economists note that vacation home sales are indeed strong, but still about a third below peak levels seen in 2006.

Sales of vacation homes accounted for 13% of all transactions last year, their highest market share since 2006.

People buy vacation homes for a number of reasons, which tend to include lifestyle (i.e., actually vacationing in the home), potential retirement avenue and income opportunity. NAR’s survey highlighted lifestyle as the primary motivation.

While the vacation niche is booming, the investment niche is shrinking. As vacation home sales increased, pure investment sales fell in 2013. NAR’s analysis showed investment sales were down 8.5% to an estimated 1.1 million last year from 1.21 million in 2012. And owner-occupied purchases climbed 13.1% to 3.7 million from 3.27 million in 2012.

Meanwhile, the portion of overall sales that were investments fell to 20% in 2013 from 24% in 2012.

Market conditions certainly point to a continued rise in vacation home purchases in 2014 with a continued slowdown of investment purchases. Depending on local dynamics, this may be a stellar year for finally buying that home near the lake you’ve always wanted.


Alain Pinel Gives insight into buyers in Monterey

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Last month, Alain Pinel gave a presentation on where buyers are coming from at Pasadera Country Club in Monterey. Check out what he had to say in the below article:

Monterey County real estate market preps for Chinese buyers


Intero Real Estate Services Named Broker for Winchester Community

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New Intero Winchester office to manage launch of homesites and home sales at Winchester Country Club.

Intero’s Sacramento region Area Developer of Intero Franchise Services Inc., a company affiliated with Intero Real Estate Services, Inc. (“Intero”), ranked 13th largest real estate brokerage in the US on the 2012 REAL Trends 500 list, is pleased to be named the listing and managing brokerage for the launch and subsequent sales of homesites and home sales of Winchester Country Club.

Re-launched in 2013 as one of Northern California’s foremost golf resort communities located mid-way between Sacramento and Lake Tahoe, Winchester Country Club is comprised of 409 home sites, 162 of which are resident-occupied and 247 of which have been purchased but not yet built upon. Six spec homes will be built in the coming year by two area architectural firms: Ward-Young Architecture and Planning and Chris Heinritz Architecture.

“We are thrilled to add the home sites and homes of Winchester Country Club to our sales portfolio,” says David Bicknell, Area Developer for Intero in Sacramento, El Dorado and Placer Counties. “Sacramento was just named one of the top ten markets where home equity has improved the greatest since 2010 and buyers are taking advantage of this.”

David Bennett, Managing Director of Winchester Country Club adds, “The area has a natural beauty, spectacular golf and skiing only 45 minutes away.  It offers a lifestyle endemic to Northern California at a much more attractive price point than Silicon Valley, the greater San Francisco Bay Area or Tahoe. That coupled with the award-winning architects working on the project, our club will provide something for every Northern California buyer.”

Winchester Country Club first opened in 2000 with a golf course designed by famed golf course architect Robert Trent Jones, Jr. The club was then purchased by Colorado-based, Real Capital Solutions (RCS) in spring of 2013.  RSC has infused nearly a million dollars in capital improvements including a refurbished clubhouse, refinements of the golf course, landscaping and social programs for the 80 new members and 285 total memberships. The refinement of all 18 greens is scheduled to be completed in the beginning of June 2014.  Home site prices will begins at $200,000 while homes will range from $1 million to $1.5 million (TBD).

Intero Real Estate Services will have an onsite sales office at Winchester Country Club and will begin sales April 1, 2014.

For information on available homes and land, please contact Sales@WinchesterCountryClub.com.

For more information on Winchester Country Club please visit www.WinchesterCountryClub.com.

For more information on Intero Real Estate Services please visit www.InteroRealEstate.com.