Selling a Luxury Home Requires

A COMPELLING PRICE

The July 16 issue of The Dallas Morning News reports that a growing number of million-dollar-plus properties are going into foreclosure.

However, the good news is that statistics show demand for luxury homes is picking back up as the high-net-worth client has marked 2010 as the year to again start purchasing real estate. Financing is beginning to open up in the ‘jumbo’ market, and prices are starting to reflect true values.

The key to selling an upper end property is working with an experienced real estate advisor to establish a “compelling sales price.”

“A compelling price can best be defined as a price that motivates a buyer to purchase the house in fear that they will lose it to the next buyer who sees the home,” says Virginia Cook, CEO of Virginia Cook, Realtors.

“Establishing such a price requires a careful analysis of the sales trends and supply and demand in the local market. An experienced real estate advisor provides this assistance as well as the marketing strategy that will bring qualified buyers.”

DEMAND

The Wall street Journal recently reported:

After a near-disastrous 2009, the luxury market appears to be making a comeback, driven by growing buyer confidence, improved financing conditions and more-realistic seller pricing. Despite the housing downturn, attractively priced homes in some of the nation’s most coveted neighborhoods are selling, sometimes fast and sometimes with multiple offers. Nationwide, sales of homes selling for $2 million to $5 million in the first quarter totaled 2,461, up 32% from a year before, says CoreLogic.

A graph from The Wall Street Journal article provided by real estate consultant Steve Harney illustrates this current demand:



“While we have not reached the sales seen between 2004 and 2008, we are attaining the level of sales of the more normalized market prior to the housing bubble,” said Ms. Cook. “Another important fact is that the upper end buyer was not impacted by the tax credit, which has expired. There is no reason to believe that demand will wane as we move throughout the year.”

SUPPLY

As The Dallas Morning News cites, there is a large supply of luxury homes on the market. That supply may increase as more luxury properties find their way through the foreclosure process.

“The graph below illustrates that even at the higher ends, people are not keeping current on their mortgage obligations,” said Ms. Cook. “These homes will create an ongoing stream of discounted properties in upper end communities, which will continue to be a big factor in aggressively pricing a home to sell.”

If you are a luxury home seller or buyer...

“Do not be discouraged!” said Ms. Cook. “This market is showing signs of life. Get good counsel from a real estate advisor experienced in the luxury market, and 2010 can be your year for success.”