Every week, we ask a real estate professional for their Short List, a collection of tips and recommendations on an essential topic in real estate. This week, we talked with Stephanie Pfeffer Anton, the executive vice president for Luxury Portfolio International, about the top five trends in luxury real estate.
In the majority of the markets in the U.S., the high-end of the real estate market (generally defined as $1 million-plus) has made a significant comeback. With that have come several consistent trends:
5. Savvy – Buyers today are empowered, educated and informed. They understand market dynamics, know the inventory and are incredibly adept at leveraging all their tools, from technology to a relationship with a smart real estate agent, to ensure they are best positioned to make smart decisions.
4. Cash is King – Post-recession, the affluent have learned to keep their money liquid so they have easy access to use it as leverage. The savvy know that their best chance to ensure they secure what they want will come if they offer cash. Cash purchases for luxury properties are upwards of 70 percent of all luxury purchases in some markets.
3. Privacy and Security – In an era of “Keeping up with the Kardashians” and “The Real Housewives,” frequent security breaches, and financial insecurity due to people like Bernie Madoff, today’s affluent are aware that society isn’t necessarily celebrating them for their wealth, or protecting their wealth or safety. As a result, they have become increasingly protective of their own privacy and security. Significant homes, of course, feature state-of-the-art security systems, but other trends are emerging, such as an increasing number of properties built with safe rooms – that is, a place a homeowner can slip into to ensure their personal safety if an intruder ever entered their home.
2. Technology is a Given – Wired for technology is no longer an amenity; it’s an expectation. Whether it’s a home designed to accommodate a server room, or complex integration of advanced “Smart” features such as blinds that can be programmed to automatically close when the living room gets too sunny (to ensure fine furnishings are not faded by sun exposure), or voice-activated systems that enable you to turn the lights on when your hands are full, technology has become truly a basic element in what buyers expect in significant properties today.
1. Global Features Matter – The world is getting smaller and smaller, and as such, properties of significance are now being designed to ensure they attract a global audience. From a development in the Pacific Northwest that offers condos to primarily Asian buyers with features such as built-in roundtables with Lazy Susan’s in the center (a nod to the way many Asian families eat meals), to two kitchens in standard models. The first is the “entertaining” kitchen, designed to remain clean and for being with guests, while in the back they offer a “wok” or catering kitchen, designed for cooking with particularly aromatic ingredients.
Of course, with a hot market comes competition, and serious buyers need to understand to expect multiple people will be interested in a market-ready, well-priced property; today, serious bidding wars are very common. That said, today’s buyers are educated, informed and willing to pay, but it has to be worth it, whether that is as an investment, or because there is something unique about a property. Today’s buyers – even the ever-growing international buyer – is looking for a return on their investment. That ROI can be long term, or it can be a lifestyle return – for example, a second home that they will hold on to for their children, but they aren’t willing to overpay. It has to be a sound investment in the end.
Stephanie Pfeffer Anton is the executive vice president for Luxury Portfolio International. She has been with Leading Real Estate Companies of the World since Luxury Portfolio was introduced in 2005, and today oversees the day-to-day operations of a global, multi-faceted program representing brokers in almost 50 countries. Previously, she served as the vice president of marketing for a large Chicagoland brokerage and as the director of communications for a real estate franchise. Before real estate, she worked in advertising and public relations in Chicago and Boston. She frequently speaks to audiences around the world about the luxury industry, real estate marketing, and research and insights into the luxury consumer.