Luxury Insider: Pricing Right: Strategy, Tactics, or Black Magic?


The market, over the last two years, has been so hot (after being so cold) that a good many home-sellers and Realtors got to thinking that price does not matter much nowadays when dozens of anxious buyers are waiting in line with a bid in their hands, hoping to get a house. Well, wake up. Price matters.

Typically, one of the most agonizing questions both sellers and their agents dread the most (aside from the commission issue…) is indeed “What price should we put on the listing to produce the fastest sale at the best price?” Today, this question is very relevant, perhaps more than ever. Depending on the local market, the uniqueness of the property and its price range, you may explore different approaches to maximize your chances.

The choices have always been and will always be the same:

  • Overprice: deliberately or by ignorance
  • Underprice: deliberately or by ignorance
  • Price at what we perceive to be “market value”

Remember that there is no magic recipe that works every time. Again, you need to take the pulse of the market at that very moment and understand that what works at the low-end rarely works at the high-end. Just supply & demand common sense. Let’s look at the three options and briefly analyze the pros & cons of each one.

  1. Overpricing: Hard to define what is an overpriced listing. As far as I am concerned, an overpriced listing is one that does not sell! In other words, , a property is not “overpriced” if a buyer buys it, even if we thought it was when we put the For Sale sign on the front lawn. The supply & demand dance can do strange things in a good market. Want an example? Look at what happened in the Silicon Valley over the last 30 months or so: very little inventory, huge pent up demand, cheap mortgage money, reassuring economic news , more stable job market, wave of rich IPO’s, etc. Results: in the mid range of the market, between $1M & $2M, selling prices have jumped, on average, well over 10% per year. Now, before you get too carried away, let’s use a little wisdom that only experience gives us. In the real estate business, the past is not necessarily a good guide to predict the future. It is not because prices have jumped yesterday that we can count on the same thing tomorrow. What we can say, looking backwards, is that if a house in that region has been on the market more than a month and did not sell yet, chances are it is indeed overpriced. Overpricing, in any market, is a dangerous idea. In my book, it is a terrible idea. If the market is slow, it makes no sense. If the market is hot but the house does not move quickly, it will soon grow old and collect dust as Realtors will always prefer showing new listings rather than those which have been aging on the shelves. Your choice.
  2. Underpricing: Talk about dangerous games!… You must have a strong heart to deal with that option. It can work to the sellers’ advantage. It can hurt just as well. In the hot market we have been enjoying for a while in the Silicon Valley and many other markets throughout the US, underpricing is getting to be as popular (and risky) a sport as bungee jumping. The idea is to tease anxious buyers with a price 5 to 10% lower than what we perceive to be the market price and manufacture a bidding war which may result in multiple offers and an ultimate sales price well over the asking (and presumably over what we the house would normally sell for…). Some agents make a good living advising their clients to take a chance. They may even win more listings using such gimmick with some degree of success. That, of course, is a bit deceptive since it is a strategy that can backfire. Keep in mind that underpricing does not guarantee a higher price. It could go the other way. Do I like this option? No. I just don’t like to play games. Your choice.
  3. Pricing at “market”: If you, as a home seller or as an agent, think you know at what price a buyer and a seller are likely to come to terms in any market, because you have a bunch of reliable comps (recent local sales of similar properties, active listings…) I suggest you use that option rather than play with a grenade. You may put a tiny cushion on top of the price to allow for possible negotiation. If the price is too high, you will soon know and you will cut some right away. If the price is too low, well, you will benefit from a buyers’ frenzy. If the price is right, you will obtain a quick & easy sale. A win-win. I like that. We all sleep better when we do business that way. Your choice.


Luxury Insider: One More Half To Go!


I don’t want to get too deep into psychology 101 (too hot today for heavy thinking) but I believe that the way each one of us behaves during the month of July says a lot about what kind of business minds we have, how alert & motivated we are, and what degree of success we can look forward to, from here to the end of the year.

So far, after 6 months of fast & furious real estate activity across the country, most Realtors are on their knees. Some don’t feel the pain because they accumulated listings & sales. Others have been running and sweating just as much but have little to celebrate in the way of rewards. It’s OK, there is another year starting in the month of July.

Admittedly, it’s a bit of a challenge for many agents to feel energized and mobilized when the outside temperature flirts with the 90’s. A ride to the ocean or the lake is so tempting. Lying on a couch facing a big screen and watching the Summer special treats like Wimbledon, le Tour de France or the soccer World Cup are pretty tempting as well.

So many choices…So many distractions… How do you see the month of July? Is it just a quiet transition between June and September, or the true beginning of the battle for the second half of the year? Do you feel a bit somnolent & in need of a rest, or are you anxious to put the Summer months to good use now that it is easier to win since so many agents are out of the race, on vacation or in a margarita-state of mind?

Business goes on. No matter what; no matter when. It will not wait for any of us. Not this year. Real estate activity is not slowing down much. Forget about your typical July. It is not a typical year. 2014 started with a bang and has been relentless ever since. Keep your running shoes on. We have another half to go, and from what we can observe out-there, it’s going to be the first 6 months all over again.

Regardless where you live on the map, homes are selling well & fast, way better than most economists and real estate specialists expected. The lack of inventory, which has been particularly severe in the West, is easing a bit, which translated in a more moderate price growth. Welcome news. In California, however, the median home price has gone up 28 months in a row and just concluded its 24th straight month of double-digit annual appreciation.

Aside from a major surprise, we don’t see anything on the horizon that might disrupt a happy-ending scenario this year. The economic outlook is actually as good as we have seen it since the beginning of the so-called recovery, in 2010. All indicators are pointing in the right direction. The stock market is bullish. The Dow crossed the 17000 mark the first time ever and investors are betting that the run is far from over.

On the job front, the news are just as positive. Unemployment is down to 6.1%, which is better than where we thought we would be at the start of the year. Consumer confidence is up. We like it. Gee, pretty soon, if we are not careful, we might learn to become optimistic again! ?

OK, we must admit that it takes more than finding a job to feel so confident about the future that you feel the urge of buying a new home. It takes money to do that, and many of the newly created jobs are not all that juicy. No doubt that part-time work, limited contract work and low-paid work (retail & hospitality) represent the lion’s share of the growth. But we’ll take it anyway. It goes in the right direction. Keep the faith.

Year-to-date, every segment of the real estate price ladder has shown gains & momentum. Some significant differences are worth mentioning though. The most notable is at the high-end. I would caution today’s home sellers not to get too demanding. Prices, lately, at the top end of the market, have gone in all directions, including down.

Yes, top quality homes in top locations are appreciating greatly and moving fast off the shelves, but if the construction quality is not up to par with the location, or the location up to par with the quality, the luxury market is the most discriminating and unpredictable I have seen in years.

Intero Real Estate Services Inc, Announces New Leadership within the San Francisco Peninsula Region


Intero Real Estate Services, Inc., a Berkshire Hathaway affiliate and wholly owned subsidiary of HomeServices of America, Inc., announced a number of leadership changes that will further advance the company’s growth strategies. Effective immediately, Dave Hobson, former VP/Sales Manager of McGuire Real Estate’s Peninsula Office, assumes the role as VP and Managing Officer of the Intero San Mateo Office. Hobson replaces Larry Klapow, who will be transferring to the Intero Saratoga Office as Tom Tognoli moves into this new role as CEO.

In addition, Alain Pinel, who is General Manager of Intero Prestigio International and currently manages the Woodside and Menlo Park offices, will now oversee the growth of the Peninsula region in San Mateo, San Carlos, Woodside, Menlo Park and any new upcoming locations.


Hobson joins Intero with over 20 years of real estate experience throughout the San Francisco Peninsula including 10 years managing the Coldwell Banker Menlo Park office. He has overseen the details of nearly 5,000 listing and sales transactions in the most expensive and sought after zip codes in America. “Dave’s deep knowledge of the Peninsula luxury market along with his focus on mentoring and training will continue to strengthen Intero’s brand name in San Mateo and the upper Peninsula,” states Tom Tognoli, CEO and President of Intero Real Estate Services.

Klapow, who has managed the Intero San Mateo office for the last 3 years, has over 20 years of experience in Bay Area real estate. Prior to his time at Intero, Klapow held various leadership roles at Coldwell Banker. “The Intero Saratoga Office has been my home for the last 10 years. It’s hard to leave but with Larry at the helm, I have complete faith this office will flourish from his veteran business acumen, his vibrant personality, and his proven leadership,” says Tognoli.

He adds, “With Larry taking over in Saratoga, the addition of Dave to our team and with Alain overseeing the development of San Mateo County, we are now positioned to further expand into the main Peninsula markets and continue to grow our luxury home market share through Prestigio International.”

Luxury Insider: Believe It Or Not


One word of warning before you read this blog: if you are a Realtor and you have a weak heart, best you avoid the unnecessary emotional trauma the blog may cause…?

Here is the shocker: Real Trends and The Wall Street Journal just released the results of their annual survey on “The Top 1000 Real Estate Professionals in 2013”. The numbers are amazing. “Amazing” is a euphemism in this case. Hard to believe, when you look at the stats, that we are still suffering from a weak economy. Some people are doing well, whether buyers or sellers, and their respective real estate agents are doing very well indeed. Judge for yourselves.

The top gun in the industry, for last year, is an agent by the name of Ben Caballero. Yes, the same guy who led the pack the year before. He is good, and he has a job on my team anytime he wants to. Here is why: Ben, a proud Texan from the town of Addison, sold an all-time record of $737,163,298! OK to read it again if you think your eyes are failing you or playing games.

Even more impressive (surreal?) is the fact that the $737M we are talking about consisted of….2095 sales! Yes, 2095 sales in just 1 year. That’s about 6 per day, including weekends. It would take something like 400 years for an average agent to duplicate the effort. Difficult.

Ben was ranked in the “Individual” category for the sake of this survey, but unless he tells me otherwise, I am going to assume that he has an army of team players helping him. Short of that, 365 full days & nights may not be enough to produce that kind of business.

Aside from this stratospheric achievement, the report for year 2013 mirrors, for the most part, what we observed the year before. You have two ways to look at & evaluate success in real estate: number of units/sales and dollar volume. Both are good. Dollar volume is better. Units don’t pay the bills; dollars do. Given the choice, agents would rather sell a $20M property than 100 homes at $200k a piece.

So let’s talk $ volume. Last year, 81 agents exceeded the magic threshold of $100M in volume. They were “only” 67 at accomplishing such feat in 2012. That’s one way to measure the extent of a healthy price appreciation all-over the country last year.

Sure enough, the pros who made the top dollar volume list are not anywhere close to the trophy list based on units, except for our friend Ben Caballero that is. I tried to find another top 10 dollar volume-agent in the units-category but, after reading the first 250 names with not a single match, my vision was getting blurry. I quit.

As was the case in 2012, two States stole the lion’s share of the high-end market, the usual suspects: California and New York. Together, they accounted for 65% of the top 100 winners. California finished ahead by many lengths, with 44 super-heroes, including 31 just in Southern California. The North was lagging behind at 13. Not a bad score considering the listings drought in the Bay Area.

New York had also a good showing, with 21 of their real estate pros among the top 100. Following, we find Florida with 13 top guns (more than twice as many as the year before), Illinois (5) and Massachusetts (4).

So much for last year. We are now beyond the midway point in 2014 and the market is holding up pretty good. We had a few hiccups along the way, but this year is shaping up to be another vintage year in the residential arena. With the challenging listing market that we have to deal with, sales are down in many parts of the country, but prices more than make up for the loss of units.

With this as a background, I bet that, with the exception of a few bright & ambitious newcomers, the top guns of 2014 will be the same agents who claimed the top honors last year. That’s how it goes in the real estate business. The best are getting better. Places are limited at the top.

Intero Insider: North Dakota, Nevada and Texas Top List of Markets for Job Growth


If there’s one constant in real estate it’s that where there’s job growth there will also be growth in home sales. Of course, that’s not a guarantee, but an overall trend.

It’s also common sense. Where people feel secure either in their current jobs or have confidence in the job market as a whole, they’ll feel much better about making big purchases like homes.

That’s why we thought it was important to highlight a piece of economic news from the National Association of Realtors this week that points out the top markets for job growth in the U.S. right now.

Nearly 80% of the 372 metropolitan areas now have more jobs than a year ago, according to government statistics tracked by NAR. At the top were the Dallas-Ft. Worth region, Austin, Orlando and San Jose, each showing a 3.5% or better employment growth rate. We can conclude that residential and commercial real estate markets in these areas will continue to expand.

At the state level, North Dakota, Nevada, Texas, Florida and Utah comprise the top five. North Dakota has benefited from oil and gas industries, while all five are known for being business friendly and low tax states.

NAR pulled out a more detailed list of the top 10 states posting the largest job growth in the past year. They are:

North Dakota: 4.5%
Nevada: 3.7%
Texas: 3.4%
Florida: 2.9%
Utah: 2.9%
Colorado: 2.8%
Oregon: 2.7%
Delaware: 2.6%
West Virginia: 2.5%
California: 2.2%

In the tenth spot, California continues to baffle some economists. The state is widely perceived as high-tax and difficult for businesses, yet Northern California in particular is booming with new jobs. We can attribute that to the startup culture of Silicon Valley and San Francisco, which have not only seen growth in jobs but incredible growth in home values and rents thanks to new job holders.

It will be interesting to watch the housing markets in these top job growth areas as we move into the second half of the year. Many are likely to see increases from last year, but by how much? Stay tuned.

Luxury Insider: Life In The City


“Urbanism” is the science, or the art, of planning and organizing life in a city. It is an on-going study of how a town looks and functions; how it evolves to meet its visionary objectives while simplifying and satisfying the needs of the inhabitants.

Those of us who travel the world can tell in a matter of days whether a city makes sense, from an urban living perspective. If you feel good walking the streets, looking around, discovering the charm, style or architectural beauty of buildings as well as their logical/harmonious fit within the local environment, the city planners did a good job.

If, however, your reaction, as you move from one street or district to the next, is one of confusion or dislike, the kind of “what’s wrong with this picture” feeling, you just know that those who drew the plans for the city had little or no understanding for balance, and little or no common sense.

I would hate working in city government. A town is never finished. It is a work in progress. There is always something to do or undo to enhance its appeal and make life better for those who call it home. Changes are always necessary, and choices always controversial. Easier to get boos than applauds when you do that job with clear vision and a true sense of responsibility.

As usually it is the case, whether you “play” with a town, or any kind of work project, it is easier to start from scratch than modify what already exists. Easier to invent than re-invent, to build than renovate. When you create a new town, I guess you cannot go wrong because people who don’t like it will chose not to live there. When you change things around, half the people will be happy, and the other half will be upset.

At this age of global competition between cities of both the new world and the so-called old one, the job of urban planning is getting more challenging as towns keep on changing to adapt to needs. Take resort towns resting by the sea for example. They need to increase hotels and luxury condos-buildings’ capacity while being stylish to attract more & more tourists and their money, so essential to keep the town budget in the black.

Last month, I got to thinking quite a bit about this, as I was walking along Waikiki, in Honolulu. Gorgeous place, yet screaming for a daring beautification touch-up. Many buildings on the very busy Kalakaua Avenue, facing the beach and the ocean, are more than just a bit shabby as they have already lived a full life. You see the same picture in most similar settings, all over the world. There is a time to go through a complete make-over or be replaced.

This reality is especially painful when, for the sake of growth, profit and design, new bigger & taller high-end buildings are set to replace some which are too small & short for today’s tastes and needs. That does not happen without public battles.

Over the years, in Honolulu and so many other world resort towns, a bunch of condos buildings were constructed right behind the first line of shorter ones, just to offer a very exclusive & expensive open ocean view to the owners. Well, where is the view now, or what will it be tomorrow when even taller towers pop up along the sea-front?

If you lose 50% of the view, perhaps you lose 25% (or whatever percentage) of the value. One thing is for sure, you lose 100% of the reasons why you bought there in the first place. Tough. Sometimes a public outcry stops some beautiful & daring projects (as it was the case on the San Francisco ocean-front this year), but most of the time you cannot stop the growth. In a way, you should not, as you would do it at the risk of becoming obsolete.

Again, urban planning has to be logical & harmonious. It has to respect and, to a large extent conform to the environment, whether natural or man-made. Along the coastlines of the French or Italian Riviera, it would not make sense to get rid of historic low-rise buildings and erect new towers to store a few more thousands tourists. Different challenges in newer cities, In the US & Asia principally. There, keeping things as they are might not be an intelligent option for a bright future.

Old & authentic does not always mean beautiful. “Progress”, here and there & everywhere, takes many shapes and comes in many sizes.

Intero Insider: Pending Sales See Largest Gain in 4 Years


The number of pending home sales was up substantially in May from April, but remained below average for the same month a year ago. What this means is the housing market is gaining steam as the year goes on, but we’re still in a slower market compared with last year.

The numbers came out in the National Association of Realtors’ Pending Home Sales Index this week. The index, which tracks contract signings and provides a forecast of sales to come, increased 6.1% to 103.9 in May from 97.9 in April. It was 5.2% below May 2013.

Of note was that pending sales saw the largest monthly gain in May since April 2010.

More good news was that pending sales were not isolated in certain regions. The pending sales index in the Northeast climbed 8.8% to 86.3 in May, and increased 6.3% in the Midwest to 105.4. Meanwhile, the index was up 4.4% in the South to 117, and up 7.6% in the West to 95.4.

Where will this lead us at the end of the year and going into 2015?

NAR’s economist believes the market will continue to gain steam, though not enough to offset the sluggish beginning of the year. So while we may see a year with overall fewer home sales, we will see a market that’s likely gaining steam at a faster pace by early 2015.

We of course, also know that the most relevant market activity is the most local. This means that some of our local markets – like those in the San Francisco Bay Area and Silicon Valley – will likely end the year on some record highs. But at the same time, other local markets through the Midwest and South, will be in good shape but potentially below last year’s levels.

It’s all in where you sit.

Luxury Insider: Luxury Portfolio International


A few days ago, while enjoying my 6am cup of coffee, I was browsing through images & stats from our global marketing partner, The Luxury Portfolio International network. As usual, it was a good, impressive & inspiring reading. As usual, that made my day.

I had the opportunity, on several previous occasions, to brag here about the critically important relationship we have with LPI. It is our bridge to the world. It is one of the most effective magic weapons we use, as a matter of ordinary business practice, to showcase, promote and eventually sell the most amazing luxury properties we have listed in the San Francisco Bay Area and throughout the country.

Out of our large marketing toolbox, it is indeed the one tool that allows us to reach out to the greatest number of qualified prospective high-end buyers, irrespective of where they happen to reside, whether in the local market, the region, another state, or another country.

No other real estate marketing network in the world is doing more or anything better to connect the supply of exclusive homes to the likely domestic or international demand. Logical you might say since, after all, our network is composed of the most powerful high-end brokerages (197 of them to be exact) on all continents.

One of the questions we always expect to hear from a seller looking to list a luxury property sounds something like this: “What have you and your firm done in the way of listings and sales in my million or multi-million dollar price range”? Obviously, a seller of that caliber is not likely to be seduced and eventually trust any agent off-the-street with a trophy listing.

The answer to the question, you will admit, is pretty convincing. Here it is: “At this point, and at any given time, I/we have well over 12,000 Prestigio-type listings, including 1,600 over $5M and 515 over $10M… Our total present inventory is $42Billion, which translates into an average price of $2.8M”. Are you sold yet?

The traffic on the site is as exceptional as the properties which are featured:

  • Attracted over 3,000,000 high-net-worth visitors in 2013
  • Averaged 250,000+ every month
  • Traffic from 200+ territories/countries every month.
  • Price-conversion to 60+ currencies & translations in 9 languages.

The proof is in the pudding… We have the best record in the industry. We dominate the US luxury properties market, which counts several good challengers such as Coldwell Banker,,, etc. Numbers don’t lie. Nice to be on top.

Not only do we have the highest batting average, but the properties which we showcase in our global marketing program are truly luxury homes. and therefore relevant to the needs of the people who own them. Not all companies can say that, as most of them include homes priced under $1M in their so-called luxury inventory. Apples & oranges.

How do you define High-End? In my book, as I mentioned before in this column, high-end does not mean the best house on the block or even the best block in town. No, luxury homes are now judged by national & international standards. Prices here and anywhere in the US match those of similar homes in Europe and Asia, because the buyers are the same. The demand, whether domestic or foreign, sets the market price.

This claim-to-fame is a big deal. Make no mistake about it. Why? Because a seller does not list a home just for the sake of listing it, but the sake of getting it sold. And it takes buyers to buy. The more the better to sell well & fast.
In truth, the seller’s ability to sell is predicated on our ability to connect with as many buyers as possible. It’s a game of numbers. Simple as that. Sellers beware.

Intero Insider: Rise of the Accidental Landlords


A growing number of homeowners who are looking to move are choosing to hang onto their homes and rent them out instead. Call it the rise of the accidental landlords.

In many cases, they either purchased or refinanced in the last few years and snagged an incredibly low interest rate. Redfin reports that 19% of current homeowners either purchased or refinanced homes between 2011 and 2013, when rates were historically low around 3.4%

And when the going market rate for rent can cover your monthly mortgage and tax payments with profit to boot – well, what an amazing way to put extra money down to pay off your mortgage!

Or, as noted in this CNN Money story, some homeowners who are still underwater on their mortgages are finding that renting at least helps soften the financial blow while enabling them to move to a bigger house.

Being a landlord indeed seems like it’s working out for many homeowners.

There are considerations in being a landlord, though. Tenants can be demanding. You have to be comfortable shelling out money for regular maintenance and repairs. You’re on the hook, even when your property is vacant and not providing income.

Being a landlord also will impact your income taxes, which is why it’s a good idea to check in with an accountant or tax preparer before jumping in.

Another thing to think about: If you’re moving out of the area it can be a challenge to manage a second property, creating the need to hire someone to help.

It’s definitely not for everyone.

The Big Picture

With more owners deciding to hang onto their properties instead of selling, you have to wonder about the impact on the overall housing market.

For-sale inventory is affected for sure. For every owner who decides to become a landlord, there’s one less home on the market for eager buyers.

On the other hand, this is good for renters, who in some areas are a growing demographic.

We don’t anticipate huge changes in housing inventory due to the rising landlord trend. If anything, it’s a wonderful thing for those owners who can profit or help close their equity gap in the next couple of years. And who knows – they’ll either love being landlords or they’ll be more than eager to sell after a couple years playing Mr. Furley.

Luxury Insider: A Magazine for Intero’s Premier Properties


This month marks the release of the 12th 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 twelfth issue, our biggest issue yet, 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!


View the virtual magazine for yourself here.