Luxury Real Estate

Courtesy of Judy Sweetland of Private Trade Winds

Private Trade Winds, in conjunction with The Travel Institute is proud to announce the release of the first Villa Certification Program. The course, called Villa Travel, was designed to equip travel agents with the knowledge and tools necessary to assist clients who prefer spacious accommodations, yet value the service and amenities typically found in 5-star resorts. No longer is villa travel reserved for Counts and Countesses on mass vineyards in Tuscany. Of course, the classic villas of France and Italy are still highly sought-after destinations, and rightly so, but what the public needs to know is that a villa can range from a 1-bedroom beachfront condo to a 13-bedroom palatial estate. What ultimately sets apart a villa vacation from a vacation rental involves an assessment of the destination, the residence, and all they have to offer. This is where the education process comes in, and it has all been crafted with the ultimate satisfaction of the traveler in mind.

In early May, the Today Show aired a segment on villa travel, and they went into detail on the rise in villa travel and the advantages therein. While we were delighted to see coverage on the subject, the segment began by defining villa as “any rental property or house.” It was this comment that prompted our immediate reaction, and we realized the urgent need to set parameters in this rapidly growing niche of the travel industry.

Our response, and what we feel is our duty as villa specialists, is to protect the consumer by educating the travel industry, and safeguarding the traveler against the pitfalls of misrepresentation in an otherwise unregulated segment of travel.

Today's discerning traveler can have it all - daily housekeeping, airport transportation, concierge service and more - without sacrificing comfort, security and luxury. The key factor is educating both travel agents as well as the consumer on the various options that are out there, and most importantly, how to appropriately match the villa with the vacationer.

The Villa Specialist course covers such subject matter as villa history, classic vs. modern villas, villa options, sales & marketing, accommodations, amenities & inclusions, and more. Upon completion of this comprehensive course, participants will be able to clearly differentiate a villa vacation from a vacation rental, and open doors to a whole new world of experiences for their client.

Real Estate Agents and Developers can benefit from taking this course as well, since they will want a better understanding of what the consumer is looking for in a villa rental, and they will have the opportunity learn how to choose their partnerships wisely when deciding who will represent their product in the industry.

An informational webinar will be conducted by The Travel Institute on Wednesday, September 14, 2011 at 12:00 PDT, where listeners can learn more about the course. To request an invitation, please email Judy Sweetland at jsweetland@privatetradewinds.com.

If you would like to learn more about villa travel, contact Andra Minnehan at 866.PTW.4LUX Ext. 809 or email her at aminnehan@privatetradewinds.com.

Courtesy of Kirsty Bryson of Luxury Homes by VAPF

With the idea of trying to give the Spanish economy a little helping hand to get back on its feet, after the world crisis brought the construction industry in Spain basically to a halt, the Spanish Government has this week decided to drop the VAT tax on new home sales by 50%, reducing the existing rate of 8% to a mere 4%, and prioritizing the sale of new homes over second hand properties.

The news has been received with open arms by the construction companies, which have seen their sales dwindle due to the surge in sales of second hand properties. Many foreign residents had to quickly sell up their holiday homes in Spain to find extra funds to cover the losses their businesses back home were incurring and many jobs were badly affected as a consequence of the crisis, so many of these second hand properties were sold below their original purchase prices, as people were desperate to put their hand on the cash. Obviously, new properties were being completely overlooked.

Prices have certainly levelled out now, with the difference in prices between new properties and second hand ones not as obvious, especially taking into account the extra cost often required to renovate older homes. This new measure puts the new developments back on track, even if it is only for a few months, as the VAT reduction will only be applicable through the end of this year. Compared to the 7% transfer tax you pay on a second hand property purchase, the 4% VAT is certainly much more attractive, especially when the property is brand new.

For companies like Luxury Homes by VAPF, whose mother company VAPF has over 48 years of experience in the real estate development sector and has been through a crisis or two before this most recent one, this tax incentive is certainly well deserved and should contribute towards re-launching the residential construction industry in Spain, which is one of the main pillars of the economy, along with the ever-present and booming tourism industry.

Courtesy of Frederick Peters of Warburg Realty Partnership

Although the beginning of fall is officially a month away, today it feels like fall. There are a few leaves changing color (early, but still…) and I am thinking about what a tumultuous summer it has been for Americans. Economists and politicians were united in predicting recovery in 2011, but instead we have gotten a debt ceiling crisis, a bond downgrade, persistent high unemployment, slow growth, and the threat of inflation. The E.U. is worse off than we are, with violent rioting in London and economic unrest throughout the continent. But New York has so far been a haven of stability.

I think there are a number of reasons for this. We are an English speaking international city which ISN’T having riots. Although the financial sector is shedding jobs again, the firms seem both stable and profitable. And while consumers nationwide seem to be stuck, the high end markets in New York, including real estate, continue to enjoy activity. We have seen deals done in August throughout the spectrum of prices, with a tilt towards the more expensive properties. But the two weeks before Labor Day are always a little slow and provide some time for reflection.

Inventory remains low for co-ops priced above $1.5 million in Manhattan, and for townhouses of all prices in Brooklyn. No one to whom I talk believes that is going to change much in September. The famed “shadow inventory” which was supposed to bedevil the condo market for years to come is being absorbed, with many foreigners purchasing units. We are finding traffic brisk at our new developments in Chelsea, in Harlem, and in the Financial District, although our buyers in both Chelsea and Harlem are locals – New Yorkers who appreciate the quality of today’s buildings and are excited to buy the newest thing. There is very little under construction so as these properties sell out nothing is replacing them.

Why is inventory still tight here when the opposite is true elsewhere in the U.S.? For one thing, the market I am discussing is highly geographically contained, and cannot spread. For another, there has been minimal foreclosure, which is one of the primary sources of oversupply in the rest of the country. And for a third, even as the job situation drives people from New York to other parts of the country, the exodus to the suburbs has slowed. Commuting is hard. The schools are no longer so great. And teenagers seem to be getting into at least as much trouble in Chappaqua or Greenwich as they could in New York. The cultural richness, ease, diversity, and excitement of New York continue to be a magnet. Private schools are oversubscribed, as are many public schools like PS 6 on the Upper East Side and PS 238 in Tribeca.

That said, most people feel cautious as we head into September. The wild gyrations of the stock market, added to everything else, have made many real estate buyers step back, at least for the couple of weeks until after the holiday. Those I speak to still want to buy, and they will act if they see the right thing, but they do not feel urgency. As I have said before, the hyped up pace which characterized the more expensive market in April and May has dissipated, leaving buyers focused on value, condition, and location. My guess is that these “Big Three” items will continue to dominate discussions as the fall progresses.

Courtesy of Judy Sweetland of Private Trade Winds

Travel Agents have weathered the perfect storm of catastrophic events over the last few years – an economy that hit rock bottom collided with a wave of “book-it-yourself” internet sites, and I’m happy to say they have not only managed to survive through the wreckage, but rather to thrive.

I just returned from a training seminar in Scottsdale, Arizona where I had the privilege of speaking in depth with Travel Agents from all over the U.S. and Canada, and I have to tip my hat to them. What a great bunch of people to be surrounded by. Travel Agents illuminate customer service, and it’s evident even in short conversations. They’re friendly, helpful, and willing to go the extra mile. I’m the person that walks out of a store in the mall and can’t remember which way I just came from. I asked one of the Travel Agent attendees if he knew where the Starbucks was located inside the resort, and he not only told me how to get there, but walked me in and had a cup of coffee with me. That’s a Travel Agent.

While it is true that sites like Travelocity and Orbitz have cut into the business share of Agents, a steadfast client base has been maintained. Why, you ask? Because people want people. Travel Agents are service-oriented by nature, and they have that gene that makes you feel cared for and protected. They not only want to book a great trip for you, but they want to ensure a great experience. They care about your security and somehow manage to stay current on the ever changing policies at the airports. Try to get that from a computer booking!

So, I’d just like to take this opportunity to say, “thank you” to all the Travel Agents that weathered the storm and came out the other side with a smile on their face. I’d like also like to thank our own Travel Agents for representing Private Trade Winds with the best in service, integrity and care. You make me proud to work for this Company. And I’d also like to thank “Ed” for a great cup of coffee.

Courtesy of Frederick Peters of Warburg Realty Partnership 

Is there any point in writing about last week’s stock gyrations? What sense can be made out of a market which goes up 400 points one day and down 400 points another? Things just did not change that much between Wednesday and Thursday! I am grateful that real estate, MY product, is not so profoundly reactive, if only because it can’t be traded by making a phone call. The fact that real estate cannot be sold quickly stabilizes the market and of necessity injects some thought and rationality into the process.

Speaking of thought and rationality and real estate, let’s take a look at the negotiation process as it unfolds in an environment like this one. Buyers and sellers must both exercise caution in their responses to the current situation. For buyers, the tendency is to immediately interpret any instability like that which followed on the heels of the S & P debt downgrade as a sign that sellers should immediately shave an additional 15% off their prices. We have no idea if that will happen (my guess is it won’t) but it certainly has not happened in the last week! That said, sellers also need to be cautious in refusing to accept offers which are within a stone’s throw of their realistic goals. Real buyers making real offers are not to be dismissed lightly.

So…realistic buyers know that it is not appropriate to make offers 20% below an asking price, but they also know they have more leverage than they did a few months ago when the market experienced its hot spring moment. April and May were a phenomenon which we will not see again for a while, with a 2007-like fervor gripping buyers. Even at the high end of the market, and in new developments, where deals continue to be made at excellent prices, there is considerably less urgency than there was two months ago. And I do not anticipate that that will change in September.

Realistic sellers, on the other hand, know that buyers are seeking location, light, and condition, and that they as sellers need to price accordingly. But they also know that for many buyers, frustrated with a search in which good properties seem few and far between, September is not likely to unleash a flood of new inventory. So it makes sense for buyers to follow the basic rule of shopping for anything: if you see what you want, buy it! Don’t wait because you haven’t seen enough, or because you hope something better will magically appear. Chances are that sort of magic will prove to be elusive!

Our job as brokers is to make sure that buyers and sellers don’t end up like Congress: deadlocked. We do that by trying to find compromises which protect the basic aims of our principals while making concessions to make the other side feel heard and respected. In the end successful negotiations are the same, whether the product is a new home or a bill to address the nation’s financial woes. People of good faith listen to each other and extend themselves. That behavior almost always results in a successful outcome.

Times such as these need new ideas, new approaches, new collaborations, and in short, everything the Fractional Summit USA 2011 promises to deliver and more.

Luxury Real Estate is a proud sponsor of the conference and is delighted to offer our clients a limited $100 USD discount per ticket purchased. Click here and enter LRE as the discount code to secure your discounted tickets.

Here's some of the highlights this year:

• Fractional 101
• Press and PR (New for 2011)
• Selling to the new elite (New for 2011)
• Looking inwards: Realize your greatness (New for 2011)
• 'Fuzion networking' (New for 2011)
• Fractional hotspots (New for 2011)
• Future luxury fractional consumer (New for 2011)
• Rethinking marketing (New for 2011)
• Fractional owners panel
• Cocktail cruise (New for 2011)
• Meet the experts
• Live fractional practical exercises (New for 2011)
• For the first time ever! Fractional finance in today's world - FREE conference tickets for lenders
• Fractional exchange, resales and rentals
• Ultimate Q and A

Last year's inaugural event was an unqualified success - click here for a video review. So don't miss out on your 2011 tickets - visit www.fractionalsummitusa.com to book now.

And to encourage more developers - the lifeblood of the industry - to enter the fractional space, we are offering an exclusive Developer Special discount, with tickets at $499, a saving of $250 on the regular price. Visit www.fractionalsummitusa.com to take advantage of this great offer.

Courtesy of Frederick Peters of Warburg Realty Partnership

I am sure we all know the Chinese exhortation “May you live in interesting times.” Well, whatever else our times may be, interesting they certainly are! For many in the ranks of buyers and sellers of real estate, however, interesting, at least insofar as it means unpredictable, is not so good. And it is hard to remember an event the results of which seem more unpredictable than the Standard and Poor’s downgrade of U.S. Treasury debt from AAA to AA+ which occurred last Friday.

The downgrade won us a stinging rebuke from China, which is understandably concerned since it actually holds so much of our debt. But beyond being a source of frustration to the Chinese, and a source of anxiety for the European Union, what does the downgrade actually bode for the future? Some economists already opine that it means little, as the other two rating agencies have not seen fit to alter their perception of U.S. debt. Some economists feel the S & P overstepped its bounds in discussing and factoring into its review the political logjam which took us to the 23rd hour (and 59th minute!) without a deal to raise the debt ceiling.

For buyers of real estate, there are likely to be some consequences, most particularly in the costs of financing. Lower bond ratings mean higher bond interest rates. Inflation, which seems to be gradually creeping back into our lives (highly visible in the price of both food and gas), also generally leads the Fed to raise interest rates. So, much as the government may want to keep interest rates at rock bottom levels to stimulate the economy, the likelihood is that sooner or later rates will begin to creep upward. Since monthly payments are at least as important as purchase price for most buyers, this means that the same $500,000 purchase price will probably cost more in a year than it does now.

Warren Buffett famously said, “I am nervous when people are buying, but I like buying when people are nervous.” Few of us possess the courage to act this way, but it is not a bad rule of thumb to question rather than blindly follow conventional wisdom. As life in the suburbs becomes both more costly in terms of taxes and less reliable in terms of schools, more and more people are opting to stay in the city if they can. While our real estate, like any commodity, will fluctuate in price, it IS a hard asset and it DOES have enormous intrinsic value. That is why we have a rental vacancy rate of under 1% and why property for sale is scarce in so many categories. And if interest rates rise, your money as a buyer will go less far, which will offset the potential benefit of price fluctuations which may or may not occur. In the last three years, our prices here fell less far and recovered more quickly than anywhere else in the nation. That tells us something about the intrinsic value of New York.

Sometimes it is worth being a contrarian.

Courtesy of Ron & Alexandra Seigel of Napa Consultants, International

Diana Bull of  Sterling Properties and Rebecca Riskin of Villagge Properties, both Luxury Real Estate members, are mentioned in this article  on the Napa Consultants, International blog Language of Luxury.

Courtesy of MLBKaye International Realty

Top real estate experts are reportedly unsurprised by recent news that housing prices appear to be dipping. In fact, Marilyn Harra Kaye, who is celebrating her 40th year in real estate and is President of MLBKaye International Realty, predicts “further price declines,” especially in New York City. The reason for this, she said, is because prices were inflated by excessive financing and global money looking for a safe haven. She added, "Manhattan traditionally lags behind other markets and in this recession, it lagged a year and a half behind the rest of the country, but it did indeed arrive – just later.”

She calls some of the changes “necessary adjustments” of over-inflated prices due to excessive financing, widespread unemployment and hard-to-find financing. “This is clearly indicated by the numerous auctions and price reductions, as well as a more realistic approach to the price bubble, which got too big,” she said. “These problems should resolve when prices stabilize; when auctions absorb empty apartments; as prudent financing returns; and when confidence builds with improving economic conditions fueled by entrepreneurial ventures.”

“As inventory is reduced, prices come down and jobs and financing are on the table, we will eventually have a stronger, healthier market,” Kaye said.

She continued, “We’ve seen this type of roller coaster many times before, so there’s no reason for alarm. In fact, while some prices have come down,“trophy” real estate has broken records. In addition, rents are rising, loan default rates are low, as well as remarkably low interest rates.These are all favorable conditions that undoubtedly lead to gain.”

As President of MLB Kaye International Realty, part of The Kaye Group, a real estate brokerage business in Manhattan for 50 years, Kaye has been riding the up and down wave of prices which is inherent in the world of real estate. While many real estate companies have merged, acquired or closed, The Kaye Group remains one of the “icons” in the Manhattan real estate market.

Kaye attributes the success and longevity of The Kaye Group to continuous ownership, strategic relationships with real estate associations and access to a global network of brokers, new technology and continued education for their brokers and associates.

"Above all, it is our ability to adapt to the changing market and connect with millions of brokers globally through the National Association of Real Estate (NAR), which offers our clients the global arena; as well as through our Luxury Real Estate membership that connects us to a higher priced market; and through the Real Estate Board of New York (REBNY) that keeps us on the pulse of Manhattan real estate. All of this combined has carried our success through some of the bumpiest markets over the last five decades, ” she said. Says Marilyn Kaye, “Lewis B. Kaye (LB Kaye International Commercial Realty) and I love real estate and our city, and we are always trying to create something that is better and different.”

Marilyn Kaye is President of MLB Kaye International Realty, located at 1067 Park Avenue in New York City. With more than 40 years of experienceand overseeing $14 billion in residential transactions, Marilyn Harra Kaye is considered one of New York's most innovative and influential realestate professionals in Manhattan. She can be reached at 347-657-9042, email mhkaye@mlbki.com, or www.mlbki.com.

Courtesy of Frederick Peters, President of Warburg Realty

It has taken me thirty years in the real estate business to figure out what real estate marketing is actually for. And over the years the notion of marketing has continued to evolve, so just when I thought I had caught it, it squirmed away. But here is what I think today, with a little historical perspective thrown in.

When I started in real estate in the early 80s, it was ALL about the New York Times classified section. There were no giant firms then, and we all vied to see who had the largest number of columns of classifieds in the Sunday Times. Depending on how well you did, you got one, two, three or more ads per week. And since there were only open listings in those days, no exclusives, you had to go hunt down the properties you were going to advertise. And then see that other people had hunted them down too: you could always tell when someone else had an ad for the same apartment as you. Sometimes, with a newer listing, three or four people had it in. We knew that because every Monday the entire office sat with the Classified section to figure out what properties we DIDN’T have, so we could go get them. But it didn’t really matter because, despite what the seller thought, the point of that ad was NOT to sell that apartment. The point was to get people to call you.

During the 90s we became an exclusive marketplace. Gradually, open listings went the way of the dinosaur and with them the idea of columns in the Times began to seem less important. The Time Magazine gained in favor. Glossies containing only social gossip and real estate ads came and went, each claiming to be indispensable before disappearing forever. And I became increasingly disenchanted with print advertising. It was all, to quote the wonderful Evelin Corsey who ran Albert Ashforth for so many years, a “sea of sameness.” How could I, who ran a smaller company, hope to distinguish Warburg or stand out in venue after venue in which all my competitors appeared as well? I realized that I needed to start thinking like a marketer, not an advertiser. Advertising properties was a means to a series of ends. For the seller, it meant their property received exposure. For the agent, it meant access to buyers. But for me, it meant building the brand!

Then, as with so many things, the Internet transformed the world. We had to spend a fortune building a website, but then all of our properties appeared on it, 24/7, for minimal ongoing cost. Posting on nytimes.com was less then half the price of a classified ad. So 6 years ago I made a commitment to myself to get out of the classifieds altogether. I had always hated them, and they seemed increasingly like a big waste of money. I wanted to spend that money on search engine optimization to drive as many people as possible to our website. (Some things, of course haven’t changed. Agents are more inclined than ever to write ads which are too long and give too much detail. They forget that selling the property on line is not the point: the goal of advertising is to MAKE BUYERS CONTACT YOU!) And we focused in earnest on branding activities. Instead of classifieds, we took a monthly full page in the Times. It boosted our web traffic 25% on the day it appeared and made a big statement about Warburg. We found print venues (Playbill, New York Magazine) which were uncluttered with other real estate ads. And when our competitors discovered them, we moved on. And more of our marketing dollars and time went to, and go to, PR. I and many of my agents are quoted often in the media. Warburg has its gig on “Selling New York”, which is watched by more people than I could ever even imagine. And, as you know all too well if you are reading this right now, I blog every week. In 2011, 100,000 people per month have entered our website through the blog.

One of my competitors was recently quoted saying that no one will buy a $10 million apartment because they saw it on TV. I agree. And this blog doesn’t sell property either. That is not the point. The point is marketing, not advertising. As we engage in more unique activities, the brand gets more widely known. It becomes more top of mind. As it becomes more top of mind, more people associate to it when they are considering their own, or a friend’s, real estate needs. And then they e-mail us. And THAT is the point!