THE LATEST TRENDS IN LUXURY REAL ESTATE A Study Among Upper-Tier Real Estate Professionals October 2005 METHODOLOGY ABOUT THIS SURVEY: • Between September 15th and October 10th 2005, Unique Homes conducted a survey among members of The Luxury Real Estate Council, a nationally representative body of upper-tier residential real estate professionals. • Respondents included brokers, associate brokers agents, owners, and owner/brokers. • Respondents were asked to provide feedback related to outlook and trends at the top levels of the luxury residential real estate market. • This study was executed over the internet utilizing technology by SurveyMonkey.com. LUXURY BUYERS How urgent are they? What are they looking for? How are they paying? What are their professions? How important is the international buyer? LUXURY BUYERS: HOW URGENT ARE THEY? • Only 2% of the upper-tier real estate professionals surveyed characterize the attitude of their luxury buyers as “Urgent, needs to buy quickly.” • Approximately half (48%) said luxury buyers “Want to find the perfect house, no matter how long it takes.” • 43% say luxury buyers are “Somewhat urgent to buy, but willing to spend SOME time looking for the perfect house.” LUXURY BUYERS: WHAT ARE THEY LOOKING FOR? • Half of buyers of million-dollar-plus-homes are looking for a primary residence. • 40% of buyers at this level are looking for a second home/vacation home. • 10% are looking for an investment property. LUXURY BUYERS HOW ARE THEY PAYING? • The majority (54%) of million-dollar-plus buyers are paying all cash for their homes. • 19% of million-dollar-plus buyers are opting for 30-year fixed mortgages. Only 4% are utilizing a 20-year fixed mortgage. LUXURY BUYERS WHAT DO THEY DO FOR A LIVING? • The most prevalent occupation luxury real estate professionals are seeing among million-dollar-plus buyers is „Entrepreneur‟ – cited by 76%. • The second and third most prevalent occupations are „Investment and Finance‟, cited by 57%, and „Medicine/Healthcare‟, cited by 41%. • „Real Estate‟ also made the list at 24% and „Entertainment‟ at 20%. LUXURY BUYERS FOREIGN INFLUENCE • Two-thirds of respondents indicated noticeable activity from foreign luxury buyers in their respective markets. • U.K. buyers represent the largest percentage (50%) of foreigners purchasing luxury real estate in the U.S. • Canada was cited as the number two foreign purchaser (23%) of U.S. luxury real estate. • Rounding out the top three is India at 15%. LUXURY SELLERS How urgent are they? Why are they selling? LUXURY SELLERS HOW URGENT ARE THEY? • Three-quarters of luxury sellers „will negotiate some on price, but not much.‟ • 11% will not refuse any reasonable offer. • 14% „know the price they want, and are willing to wait if necessary.‟ LUXURY SELLERS WHY ARE THEY SELLING? • 48% are downsizing by choice. • 16% are selling to move-up to a bigger or more expensive home. • 14% are relocating for personal reasons; 5% are relocating for work reasons. • 16% of respondents chose „other‟ – the answers given ranged from “Returning to their home country” to “They feel prices are about to go down and they want to catch the crest of the wave, so they will list and wait for their price.” STYLES, FEATURES & AMMENITIES OF MULTI-MILLION-DOLLAR HOMES STYLES, FEATURES & AMMENITIES POPULAR ARCHITECTURAL STYLES FOR LUXURY HOMES • „Spanish/Mediterranean‟ ranked as the most desired style of luxury home today. • „Contemporary‟ ranked as the second most frequently requested house style. • The styles rounding out the top five were „Georgian‟, „Colonial‟ and „Southern Plantation‟, respectively. STYLES, FEATURES & AMMENITIES PREFERENCES GEOGRAPHICALLY • Florida, California & Texas: Spanish/Mediterranean • Virginia: Colonial • Georgia: Southern Plantation • New Jersey: Contemporary • Maine: Contemporary, Georgian, Arts & Crafts (tie) STYLES, FEATURES & AMMENITIES TRAITS THAT MOVE $ MILLION PROPERTIES • Nearly seven in ten respondents chose both „Location, Location, Location,‟ and „Breathtaking views‟ as the most desirable elements of a luxury property. • „Privacy,‟ „Proximity to water,‟ and „Size/Square footage,‟ came in third, fourth and fifth. • The traits LEAST LIKELY to move a million-dollar- plus property are „Proximity to town center,‟ „Noted architect‟ or „famous owner‟. „Willingness to sell with furnishings‟ came in last. MOST EXPENSIVE SALES: 2005 LOOKING AHEAD: 2006 MOST EXPENSIVE SALES AND LOOKING AHEAD MOST EXPENSIVE SALES OF 2005 • 34% reported their highest-priced sale in the range of $1 million to $1.99 million. • 38% had a top sale in the $2 million to $4.99 million range. • 18% made the $5 million to $9.99 million range. • 10% struck real estate gold with a sale in excess of $10 million. MOST EXPENSIVE SALES AND LOOKING AHEAD A POSITIVE OUTLOOK FOR 2006 • The majority of top real estate professionals (57%) anticipate an increase in their annual commissions next year. • 27% think their annual income will stay the same. • Only 16% predict a downturn.
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