Blog contributions are provided exclusively from Luxury Real Estate members throughout the world.
Courtesy of Frederick Peters, President of Warburg Realty
The purchase and/or sale of residential real estate unfolds at the juncture between business decision and lifestyle choice. It is thus subject to a series of beliefs, on both the buyer and the seller sides, which reflect the uncertainty of that rather hazy intersection. Neither strictly a nuts-and-bolts, by the numbers choice, nor one in which the splurge mentality which can apply to shoes, or cars, or jewels, easily applies, this very large, yet very personal purchase has given rise to its own mythology. Herewith a few of those myths, and my attempt to debunk them:
Myth 1 – I might as well hire my cousin’s sister-in-law’s aunt as my agent. They all do the same thing. Actually, no. Residential brokerage is a highly skilled profession which takes years of experience to develop real expertise. A broker who is intuitive, savvy about the intricacies of the market, a good negotiator, and a strong but reasonable advocate will save you money (and often the deal) and facilitate every aspect of the process
Myth 2 – It only takes one person to fall in love with my property. While this is self-evidently true, it is usually code for “I don’t want to lower my price.” It is thus in the same category as “Why don’t they just make an offer?” The answer is, these days if they think the price is too high, they will just move on. They will doubt that a reasonable offer can succeed. While W.C. Fields may have been right about a sucker being born every minute, you cannot count on any of them showing up on your doorstep.
Myth 3 – It cannot hurt to make a very low offer. In fact it can. It risks angering and alienating the seller. And once the seller is alienated making ANY sort of deal with him/her will be that much more challenging. Be an aggressive negotiator, but be reasonable. It is no longer 2009!
Myth 4 – I know the market will be going down, because (fill in the blank…) I will buy after it does. I have heard this line, mostly (with apologies) from finance professionals, for over 30 years. Here’s the interesting truth: when the market really DID go down, in 2009, almost no-one had the courage to buy. Those who did got amazing deals, but most did not. No matter what they tell themselves, and us, most people just don’t have the stomach to go against the prevailing tide.
Myth 5 – I know the Board has a financial formula. Just tell me what I need to show. Very few Boards have a formula. And every application, like every buyer, is unique. So there is only one way to go when preparing a co-op Board package: full disclosure. The buyer who tries to outwit the process is most often the buyer who gets into trouble. Tell the truth, the whole truth, and nothing but the truth. Show and document all assets; don’t puff them up or scale them back.
Myth 6 – if I sell my property for less than I paid for it, I am losing money. Not necessarily. The all important issue when selling relates not to the absolute price, but to your next step. If you are selling to buy a bigger place, a lower price can, oddly enough, work in your favor. If you bought for $1,500,000 but you are selling for $1,350,000,that means the market is down 10%. So the property for which you would have paid $2,000,000 is now going to sell for $1,800,000. You actually end up $50,000 ahead. It is always better to trade up in a down market; it saves you money. When you are selling and buying in the same market, all that matters is the difference in price between the two transactions. The absolute numbers (tax considerations aside) are irrelevant.
Our job as agents is to help our clients maintain balance between the personal and financial aspects of these highly fraught transactions. Deflating the urban real estate legends is part of what we do.
You can read more on www.warburgrealty.com/blog.
This weekend, Santa Barbara is proud to host our very own Earth Day Festival in Alameda Park! The annual event is near and dear to residents of Santa Barbara, and has been held for 42 years. In addition to the many attractive luxury homes in the area, our city has incredible natural beauty – from the waterfront, with some of the best beaches in the world, to the many environmental preserves, including the Coronado Butterfly Preserve which protects Monarch butterflies during their yearly migration south. With such great beauty comes the responsibility of preserving it, and our Earth Day Celebration highlights all the ways we do, promotes more sustainable and healthy lifestyles, and looks into the future at ways to protect our environment in new and exciting ways. This year’s theme is “Mobilize” and as such many of the exhibits at the festival will be focused on efforts to reduce our reliance on fossil fuels.
Many special events will be featured this year (Click here for a complete schedule). Among many other fantastic exhibits, the Earth Day Festival will include a Green Car Show with a great selection of the newest and most efficient yet hybrid and electric vehicles to test drive, some of which get the equivalent of 100 miles per gallon! Some of these electric vehicles can even be charged through a solar carport, collecting sunlight by day and charging the car by night.
Santa Barbara has a thriving cycling community, with many choosing to bike to work or simply enjoy riding around town instead of driving. There are many bike paths in the area, ranging from scenic routes along the waterfront and through the center of downtown Santa Barbara, as well as a number of very challenging routes for the athletes among us. The “Bike World” exhibit will feature a number of vendors who will help educate the public about what a great alternative biking is, especially in a city that makes it so convenient to do so – as evidenced by the estimated 2,000 people who biked to the Earth Day Celebration last year! “Bike World” will even provide secured, free bike valet service for up to 1,000 bikes and feature a small stage powered completely by “pedal power” generated the audience!
The festival is providing a chance for the community to speak with local elected officials about their environmental concerns, ideas, and questions at the “Public Square”, a feature added this year. This is a great opportunity for individuals to have their voices be heard and to highlight the fact that every individual’s effort toward a sustainable future counts. As one of the first communities to celebrate and promote Earth Day, we always look forward to the opportunity to encourage community members to fuel local and national change.
At Sterling Properties, we’ve been making changes to the way we work in an effort to help make a difference. In addition to going paperless whenever possible and providing easy access to the numerous recycling bins in our office for our associates and clients, Broker and Co-owner Staci Caplan was among the first to earn the GREEN designation through the National Association of REALTORS in 2009 and chaired the first Green Task Force at the Santa Barbara Association of REALTORS in 2009, as well as serving on the Green Task Force at the California Association of REALTORS in 2008 and 2009. She continually educates herself and her fellow associates at Sterling Properties about sustainable practices in real estate, business, and green building.
We’re certainly looking forward to the festivities and hope that you’ll be able to join us if you’re in the area!
Courtesy of Rimontgó
The Montgó is a mountain that dominates the scenery in the Jávea Valley, a beautiful natural setting that culminates in the pretty coastal town of Jávea, its sandy beaches and a big bay flanked by towering cliffs on the easternmost point of the Spanish coastline.
Rising to a little over 750 metres in height, the Montgó is marked by a long even ridge that rises gently to a rounded peak near the old town of Jávea. Because of this distinctive shape it is sometimes likened to an elephant head, and exudes all the power and grace of that animal.
Though created as a fold mountain some 70 million years ago, the Montgó Mountain will this month be celebrating a more precise birthday, namely the 25th anniversary of the founding the Montgó Nature Reserve. Measuring 2150 hectares, the reserve protects an area that contains a vitally important floral habitat unique to this region, with over 650 species in all, many ranking as rare relics of aboriginal Mediterranean vegetation.
Special hiking trails take visitors along routes where beautiful flora and amazing views fight for your attention, along with a wide range of birds of prey. The founding of this protected area has not only worked to conserve an important biosphere but has also put Jávea on the map as a centre for natural and environmentally focused holidays. New businesses and services have sprung up around this, adding a valuable contribution to the local tourist offer. Let’s hope the Montgó, which has inspired the name of Inmobiliaria Rimontgó, will be visited by nature lovers for many more years to come.
Courtesy of Realty Trust Group
Portland’s Real Estate Market has been slowly showing improvement in the housing market. Now is the time to buy in one of the most beautiful cities in the country. Rated in the top five by Moody’s Economy.com and MSNBC.com for being one of the first major metropolitan cities to see recovery.*
*Information from MNSBC.com
A comparison of first quarter prices this year and last shows average sales price declined less than one half percent. The average sale price was $251,700 in the first quarter of this year and $252,800 in the comparable period last year. The median sale price decreased 1.4% ($212,000 this year and $215,000 in 2011).
*Data taken from Portland’s RMLS March 2012
There are four main types of financing purchasers are using. See the graph for a breakdown in financing types for homes and condos sold in March 2012.*
*Statistics taken from RMLS Home Sales Report, March 2012
Comparing March 2012 with March 2011 shows improvement in both pending and closed sales, which were also up compared to the previous month. There were 2,272 accepted offers, 12.8% more than the 2,014 reported in March 2011 and 7.7% more than the 2,109 in the previous month. The 1,694 closed sales represent a 4.9% increase over the same month last year, when 1,615 were recorded, and 34.2% more than the 1,262 sales in February.
New listings this March (2,886) were down compared to March last year (3,056), but rose 15.8% compared to February (2,492). The combination of fewer new listings and more closed sales contributed to the lowest unsold inventory since June 2007. It would take only five months to sell the 8,391 active listings at the March rate of sales.
*Inventory in months is calculated by dividing the active listings at the end of the month in question by the number of closed sales for that month.
Realty Trust Group is a locally-owned real estate company that has achieved the highest sales volume per agent in the Portland Metro Area and has provided more than a decade of service to its clients and community.
To read the full market report, click here.
Courtesy of Frederick Peters, President of Warburg Realty
As we move into the middle of April, many of us in the business are wondering, will there be the traditional spring market? Usually at about this time there is an uptick in inventory, prices begin to ascend (especially with help such as Vivian Toy’s upbeat article about real estate sales in the Sunday New York Times) and deals begin to flow fast and strong. So is it happening in 2012?
Let’s start by acknowledging that the market is already strong. We have seen plenty of deals so far this year, especially, as I noted in my first quarter market report two weeks ago, in the upper and lower echelons of the market rather than the middle. At Warburg we expect the market to remain on track, maybe even accelerate a little, but we don’t anticipate a big jump in prices and certainly not one in inventory. Here’s how I predict spring will come to real estate in New York:
· Over all, the market will remain strong. This is particularly true in the new condominium market, to which foreign money flocks; the small apartment market, which every day embraces more refugees from the overheated rental market; the major co-op market, which is never long on inventory but is currently long on demand; and everything in northern Brooklyn, which seems to be in an ongoing best and final offer situation for property after property.
· If it is going to sell fast and well, it will have to be priced right. We have noticed that almost all of our new listings have the same experience in the market: 25 showings the first week, 12 the second week, 4 the third week, and if you don’t have an offer by Week Four then you have to settle in for a while. So, this spring, pricing right at the get-go is vitally important. The units which are still on the market after six months have one thing in common: they were not priced right at first and did not sell during the early days of excitement and pent up demand. Our market is efficient that way.
· Buyers are going to be choosing from limited options. There are not going to be a lot of inventory alternatives for most buyers. Much of what is available has been around a long time, for the reasons described above. And not much new is coming on, even though it is April. So once they have seen what is out there, buyers will not have a lot more options in the weeks and months ahead.
· First impressions will matter more than ever. Sellers hate it when we bring up staging. But every property needs to be staged. Less clutter, a clean paint job, shiny floors, edited furniture – very few properties, even those in excellent condition, don’t need one of the above. And each year, buyers have less patience. They don’t revisit and generally they don’t reconsider. So sellers: don’t wait to stage. Make it part of your initial plan. Since the recession staging has taken on critical importance. Buyers just expect that properties they view will look nice.
Principals and brokers all fare well in a market like this one. Prices (except in the aforementioned Brooklyn) are not runaway, negotiations are expected (caveat: see Brooklyn, above, where all the negotiating is up!), and most deals are struck at a point of acceptable discomfort for both sides. We might wish for a little more inventory, but we cannot have everything. The weather is beautiful, Central Park and the planters on a thousand terraces and balconies are in bloom, and the dream is just waiting for us to live it.
You can read more on www.warburgrealty.com/blog.
The Santa Barbara Bowl is nestled up against the foothills of the Santa Barbara Riviera, the natural landscape simultaneously making the venue a beautiful place to enjoy the many talented artists’ performances and enhancing the acoustics of the venue. Built in 1936, the Bowl was originally designed to host performers for Santa Barbara’s annual Old Spanish Days Fiesta celebration. Costumed riders, torches in hand, would descend down the hillside to a revolving wooden stage to celebrate Santa Barbara’s rich Spanish heritage in a magnificent spectacle. Unfortunately, this stage was destroyed in 1939 in a flood. It was replaced with a concrete stage which remained in place until 2001. At this time, The Santa Barbara Bowl underwent a complete remodel to become the beautiful amphitheatre we enjoy today, and many additional improvements are planned for the future. A new stage was installed, with dressing rooms tucked away underneath. This world-class venue attracts some of the biggest names in music, past and present, yet offers an intimate atmosphere for guests where every seat is a good one – perfect for a fun night enjoying the Santa Barbara lifestyle of fun and luxury.
Founders and patrons, who aid in the efforts to maintain and preserve this unique venue, enjoy many perks to thank them for their generosity. They have access to the reserved VIP section consisting of 48 prime seats directly behind the floor section as well as reserved parking spaces. These supporters of the arts also are granted exclusive access to the beautiful Wendy McCaw Terrace, above the seating areas, which offers wonderful views of the city and stretching coastline. Members also can attend pre-concert receptions and the member-only end of season celebration event.
This weekend brings the long awaited opening of the 2012 season. First up on the list is Florence + The Machine, making Santa Barbara one of only 15 stops on her US tour. This season will bring performers such as Beck, The Beach Boys on their Historic 50th anniversary tour, Norah Jones, and many other amazing performers (Click here to check the lineup throughout the season for additional concerts as they are booked). The Santa Barbara Bowl has also hosted influential artists including Peter Gabriel, Bob Dylan, Journey, Styx, Stevie Nicks, Radiohead, Santana, Crosby Stills & Nash, Bob Marley, and The Clash – just to name a few!
Santa Barbara’s residents are dedicated to giving back to the community, especially when it comes to supporting the arts, and those efforts are rewarded by having access to world-class venues to enjoy incredibly gifted artists.
Courtesy of The Muljat Group
Are you thinking about buying a home and not sure what to expect? Join us for our first ever “educated homebuyer workshop”.
Our panel of experts will discuss home improvements, home inspections, and the homebuying process, including mortgages and working with a Realtor. In addition we will have information about FHA “streamline rehab loans” which can provide financing for many common remodeling projects when you purchase your new home.
To read more information visit http://bit.ly/HGZ7Uj.
Courtesy of Frederick Peters, President of Warburg Realty
As we sat around the Seder table Friday night, I was struck as I often am by the profound importance the notion of home has for people. Far from being just a place to sleep, the notion of home is central to our fundamental sense of place in the world. We accumulate memories, which over time seem to actually imbue the bricks and mortar (or sheetrock) with personal significance. Because I understand the importance of this sense of place, I am frequently urging customers to see their home purchase other than in terms of investment. Given that historically (although not necessarily if you bought in 2007 and sold in 2009) real estate has been a great investment, and that none of us has a crystal ball about the market 10 years from now, I urge Warburg clients to think long term and not fine tune too much. If you are living in a place a minimum of five years, an additional 5% in the purchase price probably isn’t going to make that much difference if you have found the place you want to call home. And most of us, on some level, recognize it when we see it.
Concern about the same issues motivates me when I am interviewing agents who wish to join Warburg. Two things I never want to hear are “I love architecture” (who doesn’t?) and “I really like people” (as opposed to really DISLIKING people?). But among the things I am hoping to hear about are an understanding of the importance residential real estate plays in the psychic lives of the people we serve. They want analysis, of course, they want an appropriate price, of course, but even more they want a place which speaks to them when they walk through the door. And when we are doing our jobs right we hear that voice, even if it is disguised and we need to listen between the lines to make it out.
Every sales business requires an understanding of the psychology of the buyer. And buyers are motivated by different things. However, selling a suit, or a car, or even a boat, is not the same as selling people a home. Each may be an expression of personal style, but buying a home involves creating the architecture of a life in a way the others do not. And we, as agents, are the midwives of this profoundly significant passage.
Where you live both reflects and shapes the life you create. Although everyone has a budget, the most important thing about buying an apartment isn’t the money, it’s the fit. It’s the way the right place can intertwine with your life. And although almost everyone has an agent, the most important thing about finding an agent is recognizing whether the person you have chosen will match you with the place which will open and enhance your life. I am embarrassed for our industry when I see agents on TV talking about the size of their commission, how much they will earn if they make this deal or that deal, how they want to push the buyer and the seller into the deal which will earn THEM the most. For me, and for the agents I respect, this business doesn’t revolve around the glib presentation or the slick speech. It’s discovering that mysterious vibration between the person and the property which keeps us working seven days a week year after year.
You can read more on www.warburgrealty.com/blog.
Santa Barbara is a very special place for many reasons – as we’ve shared over the past few weeks, our city is home to some of the most prestigious neighborhoods in the nation, some of the most beautiful luxury estates in the world, a producer of renowned wines, a center for the arts, and the perfect vacation spot thanks to our beaches, resorts, golf courses, and world-class events. While Santa Barbara certainly provides all the amenities to enjoy the modern luxury lifestyle, a large part of what makes our coastal city so exceptional is our community’s dedication to honoring and preserving our own history and culture.
Here is a selection of some of our favorite historical sites in Santa Barbara – the places we feel capture the essence of our vibrant history and still speak to us centuries after their creation.
The Santa Barbara Mission
Perhaps one of the most well-known “must-see” destinations in town, the Santa Barbara Mission was founded on December 4th, 1786, on the feast day of Saint Barbara. Although an earthquake in 1812 caused much damage to existing structures, it provided the opportunity for the construction of the Mission in the style that we know and love today (Click here to read more about Santa Barbara’s elegant architectural traditions). Even after another earthquake in 1925 which required the towers to be rebuilt, the interior of the church has been lovingly preserved and no significant changes have been made since the 1820’s. Perched on a hill overlooking downtown Santa Barbara, the Mission is more than just a local historical landmark – regular services are still held in the church and some portions of the original water treatment system have been incorporated into the city’s present day water supply system.
El Presidio Historic State Park
The El Presidio de Santa Bárbara State Historic Park is the site of the last of a chain of four Spanish military outposts built along the coast. Founded two years before the Mission, El Presidio served a variety of important functions in a frontier area just taking its first steps toward settlement and development. The buildings of El Presidio were built such that they enclosed a central courtyard, which allowed for an outer protective wall with two cannon bastions, and they were the military and governmental headquarters for a vast area stretching from south San Luis Obispo County to Los Angeles. The site even housed the town’s first chapel! It’s easy to see what a big influence this outpost had on the development of Santa Barbara – on today’s maps, it is in the heart of the downtown area, as if the city grew out from this central point. Visitors can visit the remaining and restored adobe structures, which are filled with artifacts and exhibits, as well as take a stroll through the historic gardens.
Casa de La Guerra
Also in the heart of downtown Santa Barbara is the Casa de la Guerra, which was constructed in the 1820’s by one of the city’s most affluent and influential citizens, José de la Guerra. As fifth Presidio Commandant, he was seen as a protector and supporter of the community. In a developing town where most residences were the simple one or two room adobes of settlers, the Casa de la Guerra stood in a class of its own, with thirteen rooms arranged around a spacious courtyard. In 1924 Casa de La Guerra hosted parties and teas in honor of the early families of Santa Barbara during the first modern Old Spanish Days Fiesta. From its construction forward, the Casa de la Guerra quickly blossomed into and continues to be a social, cultural, and political hotspot of Santa Barbara.
You certainly don’t need a history book to tell you how beautiful Santa Barbara is, but learning about our city’s roots is a great way to appreciate and continue to honor the traditions of our special seaside paradise!
Courtesy of Frederick Peters, President of Warburg Realty
The New York real estate market has shaped up in an interesting configuration during the first quarter of 2012. While the condo market in Harlem, priced appropriately after a couple of years of settling, has seen substantial absorption, and while apartments and townhouses all over Brooklyn are seeing multiple offers and prices over asking, the co-op markets on the Upper East and Upper West Sides, the raw real estate material from which the boom began, has a strong top and a firming bottom but a weak middle. There is, so to speak, a hole in the donut.
At the upper end, the three months which have just ended continued the trend which was already strong during the latter half of last year. There has been a dearth of good properties for sale above $10 million, and most of those which were on the market last year have been sold. The much anticipated apartments at 907 Fifth belonging to the late Huguette Clarke came onto the market three weeks ago, and the jewel in that crown, the soaring property on the top floor with windows facing the Park which stretched the whole length of the building, lasted less than a week before being sold in excess of its $24 million asking price. The good property goes fast, and when it doesn’t, there is a problem either with the price or the property. These buyers did not need a good bonus year to afford a purchase. They already have the money.
At the other end of the market, activity has also picked up, though for very different reasons. For the studio, one bedroom, and small two bedroom market with prices under $1.5 million, the lowest rental vacancy rates in recent history have driven rental prices up to a level at which buying simply makes more economic sense. While financing can still be difficult to obtain for these buyers, many of whom are first timers, we see an ongoing reliance on the Bank of Mom and Dad. The recovery of the smaller apartment market, moving as it has hand in hand with the thawing in the national real estate market, in consumer confidence, and in job growth, has been one of the halcyon stories of early 2012.
The market which is experiencing more difficulty is the broad one between the high and low described above. Neither fueled by high rents, nor buoyed by the extremely and enduringly rich, many six, seven, eight, and nine room properties priced between $2.5 million and $7.5 million are spending six months to a year on the market. They face a number of challenges. First, this market has actually declined slightly in overall value since Memorial Day of last year. When the overall news is positive, it is difficult for sellers to make the necessary price adjustments to keep the property competitive. But the pool of buyers for these units isn’t so deep. My agents report to me that, when they bring on exclusives in this price range, there are 15 showings the first week, eight the second, three the third, and then the phone (and e-mail) more or less go dead. If these units are not sold to one of the buyers out there waiting, they may be on the market a long time.
What factor distinguishes the buyers for these properties from their less expensive and more expensive counterparts? Here, more than anywhere else, we see the effects of the changes in the finance industry. Up until the fall of Bear Stearns (four years ago last week, amazingly enough!) these apartments were the bonus buys. Fueled with the big handful of cash from their bonus, mid- and upper-mid-level Wall Street financiers would buy apartments into which to move their expanding families. Now, with the industry so contracted and the cash portion of the bonuses all but gone, that simply is not happening any more. So what buyers there are for these apartments want great buys, or great condition, or both.
The notion of stretching for an apartment is gone. And no-one does renovations piecemeal anymore. Thirty five years ago, when my wife and I bought our apartment, we painted it ourselves. A year later, we did the kitchen, a few years after that, air conditioning. We actually decorated a decade after the purchase, and then did the bathrooms a decade after that. But now no one does THAT, so every price is calculated with the cost of an immediate renovation, including carrying costs for two homes while the work is being done. This often leaves buyers and sellers far apart. Thus many of these apartments languish on the market, even as their much bigger and much smaller counterparts are being snapped up.
Heading into the next quarter, we at Warburg do anticipate that the gradually rising economic tide will help float all boats. Realistic pricing remains key in ALL markets, but perhaps nowhere more than in the $3 million to $7 million range. With a smaller constituency of buyers, many made anxious by fundamental changes in the way the finance industry operates, sellers in the donut hole will have to be very realistic about what the market can offer them in the current environment.
For up to the minute information, please visit the Warburg Blog.
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