A great article based off of Alain’s recent blog post about the future of MLS by WAV Group.
A great article based off of Alain’s recent blog post about the future of MLS by WAV Group.
Multiple luxury homes sold over the holidays through Intero Real Estate’s luxury division.
CUPERTINO, CALIFORNIA (January 25, 2013) –The holidays are traditionally a quiet time for buyers and sellers of luxury homes, but Intero Real Estate Services found different this season closing on several Prestigio listings recently. Intero’s luxury property marketing program, Intero Prestigio has been in effect since last March and has definitely seen much success in its first year. “Case in point, year over year through November, Intero registered an increase of 73% of listings sold over $1.5M, the entry level to tier 1 of the Prestigio program,” says Alain Pinel, Senior Vice President/General Manager Intero Prestigio international. “It’s been a strong year for the luxury market and we’re looking forward to 2013 being even better,” says Gino Blefari, President and CEO of Intero Real Estate Services. “The Prestigio program has helped us to make our mark in the high-end.”
Four of the most notable homes sold included 16350 Matilija Drive. Located in Los Gatos, the property is a modern architectural masterpiece. Sold for $6,500,000, the home includes a breathtaking view of San Jose to San Francisco through its floor to ceiling windows.
The second home, listed by Cathy Jackson of Intero’s Los Gatos office and Karen Black of Intero’s Willow Glen office, sold for $6,000,000. 221 Jackson Street located in Los Gatos is approximately 10,700 square feet of Mediterranean charm on a 1.7 acre lot. The property includes an electronically gated entrance, 3 car garage, wine cellar, exercise room, mahogany paneled library, and cabana.
The third property at 1171 Ruth Drive was also listed by Cathy Jackson of Intero’s Los Gatos office alongside Kris Myers of Intero’s Willow Glen office. The property which is located in San Jose’s extremely desirable Willow Glen neighborhood sold for $1,550,000. Custom built, the home is full of exquisite details including beautiful flooring, high ceilings, and extensive molding with quality finishes.
The fourth home of mention closed in the beginning of January to kick start 2013. 388 Marich Way located in Los Altos sold for $2,416,000 by Dominic Nicoli of the Intero Los Altos office. This custom Mediterranean style home was built in 2005 with every detail considered. A 5 bedroom, 4.5 bathroom home with approximately 4,345 square feet on an approximate 10,200 square foot lot, features an enchanting courtyard, beautiful marble staircase, gourmet kitchen, luxurious master retreat and three courtyard terraces.
When asked about her experience with the Prestigio program, Cathy Jackson states, “It’s quite amazing what [agents] can take advantage of through the Prestigio program. The broad marketing plan, which includes extensive international exposure, was definitely a factor in our ability to sell quickly. Having everything outlined from the beginning helped to keep our clients in the loop regarding what marketing was taking place when. Intero agents are lucky to have this unique program to take advantage of.”
To see more homes like these and learn more about Intero Prestigio visit www.interoprestigio.com.
CUPERTINO, CALIFORNIA (December 19, 2012) – Alain Pinel, the renowned real estate leader who now serves as Senior Vice-President and Managing Officer for Intero Real Estate Services, just got another professional hat to wear. He was named General Manager of Intero Prestigio international, the new Intero estates division specializing in the marketing of luxury properties on a global scale.
“Alain is a natural to run the division that he actually created and which is today the state of the art in the industry”, says Gino Blefari, the CEO of Intero. “Alain knows international real estate and the high end market better than anyone, anywhere. With him at the helm, we are confident that Prestigio will soon become the sign of choice in the upscale market”.
Real estate is a fascinating business. I mean it, really. Need some proof? Well, how many businesses are there that you can talk about every day and all day? With the spouse at dinner time, colleagues from the office around coffee, neighbors over barbecue, friends at a cocktail party, kids’ parents at the baseball field.…. Can we ever stop talking about it? Forget it. Even when we try, new and addictive TV “reality” real estate programs are reminding us that it is only competing with the weather as people’s favorite conversation topic.
As a Realtor, I have sold real estate, managed offices, ran companies, owned some and, along the way, heard thousands of hilarious or plain weird stories from thousands of perfectly sane professionals. Nearly every month, my wife presses me to write books on the subject. I always say I will, but I don’t and probably will not, although something is missing on the shelves of bookstores. There are lots of interesting titles dealing with the “how-to’s” of the business for agents, or the quickest ways to make a million with no cash down, or how to showcase a home to get top price, etc, but nothing on the fun stuff.
OK, I’ll make an exception today. Just one story. It’s crazy but it’s clean. This one has the particularity of being seemingly weirder than weird and, at the same time, extremely serious. Bigger than life in any case, whatever that means.
How can I start?… Once upon a time?… No, let me put it in the form of a question: If I mention the mega sum of $50,000,000 and further mention a house on the French Riviera in the same sentence, what does this simple riddle evoke to you? Let me guess what your answers might be:
You are warm, yet not that close! You got something right though: the correct answer looks like choice #1: “a magnificent villa..….”. Where you blew it is when you assumed that you could get this kind of trophy for “only” $50M. Who are you kidding? You think you can get something for nothing?
No, $50M was not the purchase price, it was just the…..Deposit! Yes, the deposit. Merely about 10% of the price tag of $475,000,000 (370M in euros)!….. It is a true story. Now, it’s not even the “best” part of the story. The best is that the “buyer”, a very-very wealthy Russian businessman whose fortune is ranked #24 according to Forbes, decided to cancel his purchase of “Villa Leopolda”. He asked for his deposit back. Fair enough. Sounds logical. The two other options were a bit fatalistic, not to mention unwelcome: agree to lose $50M, or agree to add the nifty sum of ….$425,000,000 to complete the purchase of a house he no longer wanted! What is a man to do?
The courts rendered their decision, after long tribulations. Ultimately they said “NO” to the refund of the deposit. He had to forfeit the whole thing. Ouch! The argument they presented is that the buyer, who is at the head of a famous investment fund, was acting as a knowledgeable professional and, in such capacity, he was not entitled to his money back.
“Villa Leopolda”, as you can imagine based on the price, is a crown jewel. It is considered the most expensive villa in the world. It may also be the most beautiful. The location is divine: in Villefranche-sur-Mer, smack in between Nice and Monaco, spreading on 20 acres of heaven and surrounded by the blue Mediterranean! Are you falling in love?
There is something of a happy ending to this story…. “Villa Leopolda” might still be available! Lucky you, you have a chance to be the new proud owner! Be “my” guest!
OK Realtors, let’s pause for a minute, put our thinking hats on and brainstorm over the peculiar ways we often market high end properties these days. The discussion concerns all of us, whoever you are, whatever firm you are with, and regardless what part of the country you currently work in.
The subject is a touchy one for many of the most successful agents who like to share the info on their upscale listings with only a select few in their office as well as other top guns from the local turf. In the most desirable zip codes, a big chunk of the multi-million dollar homes remain top secret, or off limits, for over 80% of the regional agents’ roster.
This phenomenon is not new. It has been going on for nearly as long as I can remember. It is especially in vogue when the market is hot. The sentiment, among the elite, is often that there is no need to alert the thousands of agents populating the region since the top 10% or so, those who list & sell the bulk of luxury homes, are plenty enough to get the job done. Frankly, I am just as guilty as anyone for having witnessed this practice for years without raising my fingers to try to stop it.
The fact is: it is not proper to think that way and it does not serve the sellers best interest to do it. I fully realize that, for the most part, the listing agents are not the ones telling their clients to keep their listings off MLS, it is the clients who demand it, for confidentiality reasons, security reasons, or to avoid turning their homes into museums open to the public 24/7, with all the disturbance and commotion that this could cause.
Let’s identify the most notable (and regrettable?) habits which are somewhat common in the marketing of exclusive properties:
Moral of the story: don’t play hard to get by keeping the listing to yourself or some kind of a private club. We promise sellers to use diligence in trying to procure a buyer and a good offer. Let’s do just that. Real estate is a game of numbers.
Most people spend much of their working lives thinking about what they would like to do when they grow up…. And then, before they know it, they become full grown and they do not work anymore….What comes next is called retirement. How do you define retirement? Depends. Usually it means slowing down the tempo, smelling the roses and taking care of the grandkids. But for some independently minded seniors, it can also mean living to the fullest now that they don’t have to commute to work and do the time all day and every day. Growth is a state of mind.
That pretty much describes the on-going adventure of a couple of 66 & 70 years old free spirits who decided to call the world their home. It is the story of Lynne & Tim Martin, a story recounted by Lynne herself in the columns of WSJ.com. It is captivating and somewhat thought provoking.
Last year, Lynne & Tim sold their home in California and put whatever they felt was worth keeping in a 10×15 foot storage unit. Then they started packing their suitcase. Destination: the world. Of course, it takes money to travel. They accumulated a nice nest egg over the years: savings, investment returns, social security, pension money, equity from the house or, -I guess-, the net from the married couple tax exclusion…plenty enough to draw on when needed. Their financial advisor would send them a few thousand dollars every month and, in addition, they could tap into a slush fund to make advance deposits for housing rentals and travel needs, whether by plane, boat or train.
And so it started for our “retired” globe-trotters. So far, they have hopped from one apartment to another in as many as six countries, namely: Mexico, Argentina, Turkey, France, Italy & England. In a few weeks, they will be in Ireland and then Morocco, to warm up, I guess, after windy Ireland. Not a bad itinerary, with lots of fascinating discoveries along the way, not the least of them being self discovery.
Lynne & Tim are “home” on the road. They call themselves “senior gypsies.” Early on, during a trip to Mexico, they found out that they both wanted to see the world “in bigger bites than a three-week vacation allows.” Wherever they go, they live like the locals, shop like them, eat like them and learn the local ways and traditions.
Of course the US is never too far. One must be practical too. The internet is the bridge to family, friends and news from the “old country.” Online services and DVD players also help bring back to mind those favorite shows and movies. Other challenges like payments and health care are covered. They use an online bill-paying service that feeds their flying mileage rewards and they contracted an international health insurance for medical emergencies. Good thinking and good doing when you live in a suitcase overseas. There is no substitute for preparation.
Interestingly enough, our favorite gypsies discovered quickly that they were not alone living the nomadic lifestyle. They routinely meet retirees who, just like them, enjoy what may be called extended vacations abroad and some who permanently settled in a foreign country.
What’s next on the world tour for Lynne & Tim? Plenty. Next year, they will live in Portugal, Spain, France for another round, Germany, the Netherlands and Russia. Going further on the calendar, they are already booked for two months in a Paris apartment in the Summer of 2014….It looks like a full time job to take care of the planning and the reservations! Talk about retirement!
After that, who knows, perhaps they will come back. That’s my guess anyway. Everyone needs a “home base” and there is really only one. It might take some time and a passport full of stamps to figure this out, but we all need a place to call home. If and when that happens, I’ll be glad to refer Lynne & Tim to a good Realtor who will find them a nice home on this side of the Atlantic Ocean.
The high end is going strong. Thank you. Nice to see that it is, again, the locomotive pulling the market and driving prices in the right direction. When I make such a statement, I realize that some readers in much of the country must be questioning my sanity. After all, in most areas, it is not the high end but affordability and a shrinking portion of the distressed sales relative to the entire market which are the key factors of the business momentum we have been observing all year.
So let me define “high end.” The expression, in my vocabulary, does not mean the top 10 or 20% of the price pyramid in any market area. It means only the top luxury tier of ONLY those towns or districts all over the US which are commonly recognized and referred to as “high end markets”. I.O.W., the location defines the high end, not just the price point. To be sure, those upscale locations are not many on the map.
The luxury market has been very slow to come alive this year. Today, it is vibrant. Hopefully nobody in Washington is going to make waves and mess up with this long awaited momentum.
A friend of mine, Jurgen Weller, was reminding me that the low cost of mortgage money has a lot to do with the high end resurgence; at least as much as its beneficial impact in all price segments. True, although at the top end of the market, cash is king. Traditional financing is seldom used. Too bad in a way, since it is always smart to leverage other people’s money rather than dig into our own cash register.
Jurgen’s point is as follows: the cost of financing a million dollar over 30 years has dropped $571,000 since 2008, only four years ago! Enough, as he puts it, to send two kids to Harvard Business School for 4 years and keep some change to feed them when they come home. Of course, by then, the parents would be long gone since I have yet to see a human being who would live in a house long enough to fully amortize the loan!
In any case, sales in the multimillion dollar range are going up, up and up. In the most exclusive areas, the incremental improvement at the top far exceeds the price and unit sales improvement registered over the first 9 months in a lower price range. In fact, the higher you go on the price ladder, the higher the jump relative to the same period of last year.
Take a look at pricey San Mateo County in the hot Silicon Valley:
I like what I am seeing in the high end. When it’s good at that level, it’s good or getting better underneath. Please join me in keeping our fingers crossed and insure that the wind will be with us next year and beyond.
For the last five years (or is it 6?), millions of people have been playing real estate experts, trying to make sense out of the unusually agonizing decline in both unit sales and prices we have experienced all over the country. Was the real estate crash the cause of the financial crisis, or was it the result…or a little bit of both? I am sure all of you have an idea and a host of explanations about this. So have I. Whether buyers, or sellers, or observers, or active players in real estate or finance, we had plenty of time to reflect on what happened and learn the lesson. What did we learn?
I am not going to go back in history and point fingers at banks, mortgage brokers, administration, Congress, real estate practitioners or even those buyers & sellers who benefited from easy money before losing it all. Let’s focus instead on the psychological aspect of the real estate dream. We kind of know now what can cause a crash, all the mistakes that can be made in the name of greed or ignorance, but do we know what causes a boom?
The key words are hope and optimism. Those two words define us as Americans. That’s who we are. No matter what, we need and want to believe in good news and those who peddle them. Over the years, this national trait served us well. It gives us faith & power. There is no mountain we cannot climb, no problem we cannot solve. Everything is going to be OK. Positive thinking is made in the U.S.A. Quite a difference from the place where I grew up in Europe. Over there, you learn quickly how to be cynical and skeptical as part of your natural defense system.
Again and again, we were proven right in this country as it relates to real estate. Granted, every 4 to 6 years in the recent past this industry took a little plunge but, each time, after a couple of years of suffering mostly due to the lack of financing or its prohibitive cost, we got back on our feet stronger than ever. Over time, real estate has been and is a tremendous investment. It’s a fact. However, we should never undervalue timing, knowledge, wisdom and professional guidance.
Look at the last 25 years. The National Bureau of Economic Research did just that in a study that points to buyers’ expectations and how they led to the housing boom and crash. A bunch of specialists analyzed survey findings over that time period in several key regional markets: Boston, Alameda, Orange and Milwaukee. The study, as reported by Destiny Bennett from Economy News, shows that home buyers were overly optimistic about long term price appreciation.
For example, asked about their 10 year expectations, buyers (survey respondents) projected to get more than a 10 percent return per year in comparison to mortgage rates. Not a bad return indeed. Frankly, a lot of buyers experienced such appreciation. I know quite a few who got a lot more in the late 70’s or the late 90’s. That expectation, of course, is what contributed to the boom.
In the years prior to 2004, says Bennett, the housing market was experiencing an upswing. The market was flooded with buyers, looking to take advantage of home ownership and potential appreciation. Market volatility was largely overlooked in buyers long term projections since history demonstrated that, overtime, the market performs well. The study shows that today, buyers have a much bleaker outlook regarding profitability.
As Bennett points out, a July survey from Pulsenomics shows that for the next 5 years, from 2012 to 2016, buyers only expect a 1.95% annual appreciation. They are more prudent on their forecasting, for the moment at least. I think this expectation is reasonable in much of the country, even if some areas enjoy a much more dynamic market and a better than 10% price hike so far this year.
No matter what it ends up being, I am confident that going forward, there will be no better place than a home to put not only your family but also your money.
Taxes are part of life, no matter where and no matter when, but there is a smaller or a bigger pill to swallow depending on where you are on the world map. If you reside in Europe for example, chances are the government will be more demanding of your contribution than here in the US, particularly these days when most countries in the E.U. are looking for money to offset growing deficits. It is indeed the picture today in London.
The U.K. government just recently kicked up the sales tax on residential properties in excess of $3.3M (roughly 2 million pounds) from 5% to 7%. Ouch! For us, Americans, it would be painful enough to pay sales tax on the sale of a house but, on top of that, having to deal with a steep 40% tax increase might be a deal killer or at least a serious deterrent. Not so much in London, yet.
So far so good, buyers are still buying upscale properties and sellers are still selling them. As a matter of fact, the number of sales for homes impacted by the UK stamp-duty increase has actually doubled in May, the month after the axe fell, compared to the same month of 2011, according to the Land Registry. But how long will the momentum keep going?
A new study from real estate firm Knight Frank LLP, reported by Bloomberg News, shows that prices for luxury homes in central London rose at their fastest rate in September, propelled by the demand for properties which escape the new higher sales tax. The number of luxury homes sold, that were not subject to the higher levy, rose 23% y/y in the 3rd quarter, according to the report. Knight Frank further explains that more than 50% of the buyers in the 2M pounds+ price range are overseas buyers. No surprise here. Russians & Indians, but also American, Italian & French nationals are leading the pack. Since March 2009, when values bottomed in the best of London as a result of the financial crisis, values have jumped 51%.
Higher taxes are a sign of the times. The Deputy Prime Minister, Nick Clegg, tried to rationalize the trend by using words which we also hear often on this side of the Atlantic these days. Listen: “Most people in this country don’t understand why people who have very high-value property don’t pay their fair share…It’s easier to stop tax avoidance on brick and mortar than on money you can move around the world.” Gee, I hope none of our politicians are going to make this pledge their next war horse…
The U.K. tax hike, as you can imagine, is not terribly popular with developers. Writer Chris Spillane explains in Bloomberg News that one of them is now in the hunt for New York prime real estate as an alternative. His name is Nick Candy. He helped conceive “One Hyde Park”, the most expensive apartment complex in Europe. He claims that London may lose its appeal for luxury developers with the tax hikes and the prospect of more coming.
All leading world cities are now competing for buyers, sellers and investment money at the top end. We have been writing about this phenomenon for some time. It does not take much for the demand and the money to change zip code, state or country.
Candy finds great price similarities between London & New York, so a tax hike in one could very well be the reason to look at the other to create new developments. Case in point, Chris Spillane notes that a furnished home in One Hyde Park sold for 7,500 pounds a square foot last year, roughly the same as a penthouse across the street in the Bulgari Hotel.
The competition is heating up; A lesson for all large cities and governments to think about and learn from, here, there, and everywhere.
Lucky for you, I don’t do politics. Not in writing at least; this way you never can prove me wrong! I like to judge things though, with as much common sense I can muster. Which brings me to the decision the Fed made, a couple of weeks ago, regarding its commitment to buy mortgage-backed bonds at the rate of $40 billion a month, for as long as it will take to see a bounce in job creation and economic vitality. In other words the operation is….”open-ended”. Is it hot in here or is it just me?
The big idea, of course, is to lower the rate at which banks can sell their loans through government-controlled programs like Freddie & Fannie and cross your fingers that such perks will be passed on to consumers via more & better loans, for housing particularly. Investors, as a result, will be induced into buying more risky but potentially juicy assets, i.e. stocks, corporate bonds, etc. The stock market loves it. So far so good. But is it the right medication for a fragile convalescent body or is it playing Russian roulette?
The European Central Bank is following a similar path by committing colossal amounts in the attempt of reviving the moribund Spanish economy (among others) and spur a hypothetical recovery within the euro zone. So far, all we can see on that side of the Atlantic is that the national debts are getting bigger, the economies weaker and the populations angrier. We wish them good luck with their efforts, though because if the ECB were to run out of money, it would run out of options. No more safety net.
The picture, fortunately, is far from being as alarming here. We are almost out of the danger zone. Real estate, a good barometer of the economy, is back on its feet. Prices have stabilized and sales are picking up. Other sectors of the economy show welcome improvements. That’s why I am somewhat perplexed over the pertinence of the Fed’s move. As it is, the balance sheet has jumped from almost $1trillion before the financial crisis to about $3B. Why another run now? Can someone explain to me what will happen when the central bank will eventually turn off the faucet?
A lot of Realtors readers out-there might say: so what? It is good for real estate since the latest Fed’s move, together with Chairman Bernanke’s comments, guarantee that incredibly low mortgage rates are going to remain incredibly low till 2014. I am OK with that part, although I am not sure that giving money away at this point is likely to produce a real estate gold rush and start a new “wealth effect” resulting in lots of job creation. The puzzle, as Katie Eichten from Western Bank Corp astutely noted in her daily “Market Matters”, is that the economy’s major problem is not the availability, price or supply of credit, but rather the demand for it.
Let’s face it, the least fortunate among us, those who make little and have no job security or no job at all, those who could have a huge impact if they were to buy a home, are precisely those who cannot because of their precarious situation. People who are working and have enough savings to buy up or buy their first home could benefit but, frankly, considering the super low cost of money today and the low prices, they don’t need another perk to sign a purchase contract.
That leaves investors, big or small. They will like the fact that mortgage money, as it remains low, is likely to finally push prices up, which is the name of the game for investors. In the meantime, they can enjoy juicy rents from all the would-be buyers who cannot buy. Tens of thousands of financially stable homeowners, about to retire, should also jump on the opportunity while it lasts. They could buy another place and lease the one they don’t occupy. Now is the time to act.