Blog contributions are provided exclusively from Luxury Real Estate members throughout the world.
Courtesy of Michael Saunders & Company
News of our local economy has been decidedly upbeat of late, giving us another reason to be thankful as we look forward to the New Year. The unemployment rate in Southwest Florida declined by nearly a full percentage point in October—its lowest level in three months—even as retail sales enjoyed the biggest one-month gain in nearly four years. Meanwhile Chris Lafakis, an economist with Moody’s Analytics, predicts substantial growth in Florida’s economy due to a rebound in population growth and an increased willingness of people to travel to Florida for vacation. “The story of pent-up demand is true in no place more so than Florida,” he said.
Such pent-up demand, set against a backdrop of steeply reduced home prices and interest rates, helps explain why dollar volume at Michael Saunders & Company through October was up 28% and unit sales up 34% versus the same time last year. With plenty of buyers now willing to commit, your biggest concern as a seller ought to be how proficient your real estate company is at attracting them.
If your property is listed with Michael Saunders & Company nearly four decades of choosing international brokerage alliances that best serve our constituents—including Christie’s Great Estates, Leading Real Estate Companies of the World, Luxury Portfolio, Mayfair International Realty and the European Real Estate Network—is just one way we showcase your home to a world of buyers. These alliances have been significantly augmented in the digital age by linkups with over 2,000 carefully chosen web sites, each offering buyers an easy portal to michaelsaunders.com—which itself attracts buyers from all 50 states and 193 countries.
Last week we trained our spotlight on Christie’s Great Estates, whose 128 affiliated brokerages, 1,030 offices and 34,000 agents in 42 countries enables our properties priced above $1 million to be showcased before the world’s most affluent and discerning buyers. We also talked about our exclusive affiliation with Mayfair International Realty, which earned our properties the equivalent of $100,000 of editorial coverage in the U.K., whose citizens are most prone of all foreign buyers to purchase properties along the Gulf Coast.
Today we highlight three more of our affiliates, each of whom adds quality and quantity to the total number of buyers who find properties through Michael Saunders & Company:
Leading Real Estate Companies of the World is a premier international network comprised of over 600 of the most respected independent real estate firms in the world. Together these firms sell over one million homes annually totaling more than $250 billion—more than any national brand or franchise. Members of the network—which includes more than 5,000 offices with 150,000 agents in the U.S. and 30 countries abroad—are required to refer customers within the network. Thus we are the fortunate recipient of hundreds of qualified buyer referrals from our network partners across the U.S. and Canada; and, of course, from the rest of the world.
The Luxury Portfolio Fine Property Collection is the luxury face of Leading Real Estate Companies of the World, who counts among its global network the world’s most powerful independent luxury brokerages. Luxury Portfolio is comprised of 200 high-end luxury affiliate companies nationally and globally that dominate the worldwide luxury market. Its web site, translated into nine languages, attracts visitors from over 150 countries each month
The European Real Estate Network is comprised of 22 leading property firms, operating 53 offices in 10 countries; and is the only pan-European network of independent, top-quality brokerage companies. Michael Saunders & Company is proud to be one of only two U.S. brokerages who have been invited to join this prestigious network.
Naturally, we still endeavor to attract buyers the traditional way; through the highest level of paid media advertising in Southwest Florida. Still, with nine out of ten buyers now known to start their searches on the web, we train much of our strategic focus on providing buyers who reach us via michaelsaunders.com with the most meaningful and rewarding online real estate experience in the business. At the end of the day the best service we can provide our sellers is the assurance of reaching more qualified buyers through our global affiliations, media advertising and internet capabilities than any other company on Florida’s Gulf Coast.
As Cathleen P. Black endures scrutiny of her proposed appointment to become New York City’s next schools chancellor, she has one less house to escape from the pressures of her appointment this holiday weekend.
The assessor’s office in Bridgewater, Conn. confirmed Tuesday morning that Ms. Black’s antique colonial at 204 Curtis Road sold in recent days for $1.98 million — 15 percent below its $2.35 million asking price. Carolyn Klemm, the real estate broker selling Ms. Black’s house said that she was allowed only to confirm that the house had closed.
For full article click here
Courtesy of Michael Saunders & Company
Southwest Florida is by no means unaccustomed to being singled-out in the national and international media for being (among so many other things) one of the world’s best places to live, work, play, retire and—above all—soak up as much culture as we do sunshine. But of all the accolades that have happily come our way in recent years, an article in last week’s USA Today offered the most powerful affirmation yet of why we need to use our considerable cultural and educational assets to re-engineer our local economy.
Ted Fishman, who—in his own words—has circled the globe to catch “a glimpse at a world population that is growing ever older,” concluded in an article entitled “Growing Old Gracefully” that few American communities outside of Sarasota offer a more invigorating venue in which to age well. In his estimation, Sarasota is doing everything exactly right to engage its aging demographic; in stark contrast to other communities which he says “often communicate to people in their 50’s and older that they are past their use-by dates.”
What set’s Sarasota apart, according to Fishman—who authored the new book “Shock of Gray,” a chronicle of the astounding economic and political ramifications of an aging world—is that the city is flush with a variety of not-for-profit organizations that don’t just cater magnificently to the lifestyles of active and engaged seniors, but also attract many of their most dedicated volunteers—and much of their financial life blood—from these very same patrons.
“There is so much going on in Sarasota to promote and profit from by keeping older people engaged, active and healthy that one local civic organization touts the region as a kind of Silicon Valley for aging,” Fishman remarks. “It sounds paradoxical, but Sarasota’s critical mass of firms serving the older market produce a steady stream of innovation—in business models, services and technology—all with the needs and desires of late-life consumers in mind. Firms that pioneer innovative senior housing in Sarasota, for example, replicate it elsewhere.”
No doubt the civic organization that Fishman alludes to is Sarasota County’s Economic Development Corporation, whose five-year Economic Development Plan includes a platform based on leveraging the County’s existing assets to attract businesses hoping to design, test and deliver cutting-edge new products and services to seniors everywhere. Obviously this goal is being realized on a significant scale when informed observers—such as Fishman—sit up, take notice and rave about what they’ve seen so far.
We say “so far” because we fully believe that much more can be done to effectively transform our region’s growing reputation as an important hub of creativity into one of its chief economic drivers. Could we not dramatically lessen our dependence on boom-and-bust industries by coordinating every facet of our extraordinary cultural and educational landscape into an effort to systematically attract way more than our fair share of the 80 million-plus baby boomers who will retire over the next few years? Moreover, would not retiring educators, musicians, artists, performers and devotees of the arts lead the migration into an area as famous for its existing breadth of cultural and intellectual treasures as for its spectacular climate, coastline and natural beauty? And would our cultural institutions not likewise benefit immeasurably from a major influx of new talent, ideas, financial support and leadership that such an in-migration of creative minds would continuously foster?
What if our local colleges and cultural institutions joined forces with the City and County Boards of Commissioners, the Sarasota Convention and Visitor’s Bureau, its Arts Alliance, the Chamber of Commerce and others to strategically position Sarasota to the worldwide arts and academic communities as a place where the highest levels of creativity and intellect are known to flourish in a breathtaking and supportive environment? Doesn’t it make infinitely more sense to leverage our two most enduring civic identities—as a welcoming haven for tourists and retirees and as Florida’s cultural capitol—to attract the very people and businesses that could finally break our dependence on building and development?
The cutting-edge products that baby boomers have traditionally favored require exactly the sort of research and design capabilities that institutions such as Ringling College of Art & Design and USF possess in profusion. What if by strategically uniting and promoting these assets, our community could become a social laboratory known throughout the world for developing the products and services that will help redefine aging? Will companies arrive on our doorstep eager to set up shop and find creative solutions for the challenges of growing old that will ultimately affect every one of us? We think they’d not only show up, but would be crazy not to.
Courtesy of Scott Cutter of 2CostaRica Real Estate
The past 12 months in the real estate world here in Costa Rica has been quite a interesting time for professionals, buyers and sellers in the marketplace.
Perhaps the most challenging task that we have faced as real estate professionals has been the job of re-educating sellers as to the market conditions, values and expectations that they can expect if they would like to sell their property within a reasonable amount of time.
In a market void of an MLS, comprehensive comparable stats on true sales values, volumes, etc., there is a constant battle to keep sellers realistic about values while battling the proverbial: "But 'so-and-so' has his property down the road listed at $2,000,000 and our house is much nicer".
As a father of two, I have now come to fully realize how blind we can all be in our self analysis and that of our own properties, and have learned to deal with this point with our sellers with great care, but that is the subject of an entirely different article and story...
Back to values... In addition to the lack of comprehensive hard data other than our years of experience to share with clients, another obstacle is the fact that most buyers in Costa Rica, especially in the coastal areas, paid cash for their properties and in a country with such low property tax and holding costs, many sellers are content to wait for better times in which to sell.
This is a critical point for Foreign investors to understand. The market adjustments which you see in the USA which tend to move the market up and down in unison as since the VAST majority of real estate there is purchased through leveraged financing, changes in interest, values, absorption, etc. can drive the market in either direction and virtually everything for sale follows that trend.
Here in Costa Rica, you will find a house listed at $1,500,000 right next to one that is every bit as nice, listed at $700,000 and it can be confusing to anyone without the experience to understand the fundamental differences in the market place. The reality is that despite the economic times we find ourselves in, there is a great deal of new movement and sales taking place in the market.
Careful about getting too excited sellers... as this movement is virtually ALL due to the fact that despite the low holding costs, more and more sellers are coming to terms that an imminent boom like the one we enjoyed for nearly a decade is not returning any time soon and adjusting prices to invite buyers to the table.
All economists talk about the huge pool of money on the sidelines right now, with investors just not sure where to go with their funds. Costa Rica remains a fantastic lifestyle and investment destination and buyers are here, looking and snatching up well priced opportunities in virtually every part of the country.
While 4 years ago, we spent all of our time educating Buyers about how even though it seemed expensive to purchase here in relation to the infrastructure, etc. that it was worth it as this was the future destination of much of the world. Now, my team, and my bet is most Realtors who are true professionals, spend most of their time working with Sellers to create realistic expectations of pricing and sales timelines.
For those that "we will sell if we get our price" those timelines can mean years.
We are also helping Sellers realize that taking a much lower price than what they hoped in this market, also has some advantages. The largest of which is that Sellers who move properties now get liquidity to become Buyers in what is arguably the most favorable buyers market around the globe in the past two decades.
Whatever losses or reduced profit margins are absorbed now can normally be regained by becoming a buyer and is something more and more sellers should and are considering.
For Costa Rica real estate buyers... There has never been a better time to be sourcing deals in Costa Rica.
For Costa Rica real estate sellers... Either arm yourself with patience or, we must collectively work towards recognizing that the discerning buyers who actually have money to spend, are not paying the premiums of the pre-crisis days in today's market. Those who can come to terms with this are selling, those who aren't.. are now and most likely will be waiting for quite some time.
Shawn Clayton of Clayton & Clayton Realtors was featured prominently in a June 2nd article in the New York Times Real Estate pages entitled A Rising Tide in Waterfront Values (by Antoinette Martin). In the article, Martin suggests that rising prices on waterfront homes in New Jersey’s Monmouth and Ocean Counties are indicators of an improving economy. Clayton & Clayton brokered the highest sale price this year on a waterfront property within the two counties back in January 2010.
When the first signs of the international financial crisis emerged in the second half of 2007 the Spanish property market had already been in a steady decline for a while. Not surprising, if you consider that almost a decade of feverish growth had led to a textbook case of an overheated market in which builders, buyers, sellers, investors and banks alike became accustomed to the kind of volumes that had never been seen before – and which would prove to be wholly unsustainable.
What followed the financial crisis and accompanying worldwide recession was, predictably, a sharp drop in property sales and prices in Spain as elsewhere. With a particularly overheated market and an oversupply of properties Spain, however, suffered more than most. The golden boy of the past ten years felt the chill winds of recession most acutely, and 2009 was an icy year indeed.
The return of value for money in a market where smart buyers can do very well.
The die was cast, and the year saw a further 27 per cent drop in real estate transactions in comparison with 2008, bringing the total decline in relation to 2007 – when 715,000 properties were sold – to 48 per cent. As we entered 2010, however, the decline seemed to have halted, bringing monthly sales levels to around 30,000, a figure generally regarded as the hollowing out of the market. From here on out, there should be a gradual increase over the next two years, driven above all by the return of value for money in a market where smart buyers can do very well.
The overall impact on real estate has been a drop in prices ranging from a few per cent in some cases to over 50 per cent in more extreme examples. Those so-called distressed sales have received a lot of attention, though they represent just one of a rather diverse range of factors that combine to cloud the overall issue of property values in Spain.
As an overall average, prices have dropped by around 25 per cent from their highpoint in 2006/2007, yet look at individual markets – and sometimes even adjacent properties – and their asking prices may vary considerably. The reason is that while one person may not have the absolute need to sell and will therefore hold on to a higher asking price, another may have to sell very urgently and potentially at a loss.
On the whole, properties in less attractive locations, featuring poor construction and perhaps badly maintained urbanisations, suffer the greatest drop in demand, while quality homes in prime locations have maintained their market. It means that there is still a significant market if the product is right – and if the price is sensible. The demand for such real estate, by the way, is growing steadily, as investors and end-users regain their confidence in the Spanish property market and realise that now is the time to buy at future gains.
January 2010 saw average overall property prices in Spain rise for the first time in 24 months, albeit at a very modest 0.6 per cent. Within this trend, the Valencia region was among the better performers in the country, registering an increase of 2.2 per cent on the month before. It heralds the beginnings of a gradual recovery in a region whose property market is blessed with optimal diversity that includes important primary, secondary and commercial sectors.
“While it is clear that we have reached the low-end of the cycle and that life has returned to the market, it is also evident that this will be a slow and gradual recovery,” says Inmobiliaria Rimontgò CEO José Ribes Bas. “In the general market there are large stocks of unsold property to be absorbed first, and this will take some time. In the higher end of the market in which we specialise demand has been far more consistent, although it remains a buyer’s market and this means that buyers seek out quality real estate that is competitively priced.”
“We have entered a period in which buyers with liquid means and access to financing are in a very strong position to benefit from attractive prices – acquiring more home for their money and a very good mid to long term investment. For people like that the coming two years will be the best time to buy
By Ole Jespersen of IRG International Realty Group
The Market Situation
Ole Jespersen, sole owner of IRG International Realty Group, says: “At every function - private or business - I am being asked about the market situation. This is not new or as a result of the present economic situation, but also happens in the good times. People like to hear about the property market as it is a topic that actually interests the majority of people. The simple fact is, the property market is the most influential factor for the private, national and the international economies. Just remember what started the ongoing situation: American sub prime lending.
IRG is in a unique situation to comment on the ongoing property financial trends and effects as we are not just a local Portuguese firm, but through our international affiliations and networks we receive constant information and updates from around the world. Within Portugal we are represented in key areas such as the Algarve, the Blue Coast, the Silver Coast and Estoril/Cascais & Sintra as well as Lisbon city. We are involved in normal brokerage (single properties mainly for private buyers) and the institutional and development market with resorts, hotels, residencies and golf courses.
We have for some years published an annual report on the Luxury Residential Tourism Market. The report has become a “reference work” within its area and is statistically based on historical factual figures. The report for this year will be published in May. The following comments are therefore based on observations and personal experiences.
Yes, the market is tough and has seen downward trends in specific sectors. Hardest hit is the low to middle market with especially off-plan, speculative apartment acquisitions. High debt financed purchases have become very scarce with banks no longer being willing lenders and this has had a severe overall effect for developers.
But still, prime locations, prime quality or landmark properties are still in demand. Yes, DEMAND. We are transacting a number of high profile properties in all key areas such as Quinta do Lago, Estoril, Cascais including Quinta da Marinha and Quinta Patino as well as some central Lisbon properties. Some deals are land, some deals are renovation properties and some are brand new, high quality villas and luxury apartments. We represent a number of high value, high quality, prime location residence projects where we are taking substantial reservations - even in this market.
Additionally we also have a number of clients waiting, waiting for THE deal or a distressed sale, but in the high end of the market there is still resilience to "vulture" price cuts. The market has stayed pretty stable which means transaction numbers have been reduced as buyers in general expect "deals". Most transactions also involve lengthy negotiations involving legal, tax and financial issues.
At IRG we are not just sitting it out. We are proactive, we are diligent and flexible and we adapt. And finally we try to create solutions for our clients - be it buyer or seller. For our institutional and development clients we are advising on new activities in the markets internationally and we are constantly working on new approaches to product, marketing and PR. We want to sell real estate as real estate is the catalyst for turning the markets.
Based on the above we will announce shortly a number of new business initiatives running alongside our main property mediation business. These initiatives will be an additional service for all our clients and will reflect our overall aim to be of service and to find solutions for our valued clients.
At IRG we are not pessimists - at the moment we are cautious optimists and we see great potential in the future. We always have to remember we are based in Portugal - the most ideal location for European short and long term holidaying, for the second home or for a change in life. Portugal has everything going for it. So let's make it happen together”.
About IRG International Realty Group
IRG International Realty Group is one of the leading international brokerage companies in Portugal and specializes in sales of Portuguese high-end and luxury residential real estate. IRG is the exclusive affiliate in Portugal of Christie’s Great Estates, a worldwide real estate network and subsidiary of the world’s oldest auction house, Christie’s. IRG’s Head Office is located in the prestigious Avenida da Liberdade in the heart of Lisbon and there are also boutique offices in Quinta do Lago in the Algarve, Estoril and in Kensington, London, United Kingdom.
Bob Wuan of Vacation Finance is a fellow real estate writer on the internet and a dear friend. We use the services of his company, Vacation Finance, for our clients needing a loan for purchasing their second and third homes. Bob Wuan just published an article today that I wanted all of you to read. Mind set is still one of the most powerful aspects of our economy. I welcome your feed back on Bob's thoughts.
"America does seem depressed. Our immediate gratification society is bogged down in a recession that started over 12 months ago, and its starting to irritate us. But it is not (yet) a Great Depression. First, the banking crisis: 31 banks have failed in the last year, only 3 failed in the previous 10 months - an increase of 10 fold. That's how the media spins it. But when you consider history - 4,500 banks failed in 1990s - 71% of the S&Ls fell in that recession. How is 31 worse than 4,500?
"Next, unemployment is at a high for several decades, 7.6%+/-, in fact, this generation has not ever seen unemployment this high. Is it another Great Depression? No. By 1936 unemployment in America had reached 25.6% - it was likely higher since record keeping was less strict back then without social security numbers. In 1979 unemployment was 13.8%, which means the recession of the 1980s was two times worse than today's. In the 1930s there was no unemployment insurance, when you were out of work, you were out of food. Today many layed off workers get months worth of compensation paid up front, or insurance benefits that replace 30-95% of their wages. Imagine our troubles if the 3.5 million unemployed were truly penniless today like in the 1930s.
"Economies are built on a foundation of faith and trust. When our faith wains, so does our willingness to trust, trade and prosper. Over the last 18 months, we have begun to doubt, we have lost faith in our banking system's stability - which is the life blood of all commerce. We questioned the bedrock base of our net worth and security in our homes. We have watched the unthinkable plummeting of our our home value - live and in real time with new technology like Zillow.com. Like checking a stock price from our iPhones, we can see if our home value declined over night. It has made each of us wonder "why am I going to work today?" Everything I work for is worth so much less than I had hoped. I earn money to watch if drop in value in my 401k. In the past, we would wait until month end or quarter end for a statement of progress, and depression would only set in after performance disappointed for a few quarters. Today, Americans ride a wave of instant news, instant disappointment and false senses of recovery when the markets (or local home sales) rise daily.
"I blame our new ‘mark-to-market' mind set. Watched constantly, a pot never boils. Criticism of our capital model has often included our inability to look out into the future (like Warren Buffett) and have confidence that we are doing the right things to deliver long term results and wealth. Instead we grade all actions off immediate results. CEOs get bonuses off selling cars today, even if those sales create long term losses due to crazy lease financed terms. Neighborhoods feel wealthier when the property developer sells the model home at an inflated rate to his cousin, and then appraisal reports show a jump in values.
"When these games are realized months, quarters or years later, we all feel cheated by the market and the participants and 2008-2009 ‘depressions' set in. This economic down turn is all mental. It is all about how we ‘feel' about the economy, the rules, the participants, the future prospects. The facts tell a much different story, slow down yes, but 3.5 million jobs could be recreated quickly in America. Our trust, faith and optimism may take much longer to bounce back, unless we look to the horizon instead of our feet."
What are YOUR thoughts on Bob's article about the mental aspect of our current economic crisis? Until next time, your real estate detective is looking at the horizon of the possibilities awaiting all of us. Until next time...
Well, as leave an eventful 2008 that was filled with breakdowns, bailouts and the bear chasing the bull out of town, keep in mind - this too shall pass. To be honest, as an area we did prove more resilient than many others. Our local banks have not disappeared into the night. In fact, several of them have reported not even one foreclosure. Why? Nothing amazingly clever, just making sure that the borrower has a job, an income that is accurate and an appraisal that is not based on speculative future value.
Despite what many large newspapers would have you believe, this area cannot be compared to national averages and statistics. While, of course, we are impacted by the national economy and the global meltdowns, we are very much a local market. In fact a much sought after area , due in large part to our proximity to Manhattan, ease of commute, good schools and the pure beauty of Monmouth County. I have compiled market reports for local towns, which are available here. These are updated to the end of November and will be updated within a day or so. so keep checking back. View your town here.
All this does not mean that it has not been a tough year for some. Those people who lost their jobs, or a large part of their stock portfolio find it hard to take comfort in the fact that that our real estate market average has fared better than many other areas. Economic downturns also create stress in the home, contributing to more divorce. In my 23 years in real estate, I have worked with many such clients and know that stress can compromise decision making. I can GUARANTEE that your property will sell, if you listen and take my advice. Too often, a client on a knee jerk reactions stops listening to good advice and grabs at straws that invariably cost them time and money. I am only as good as my client will allow. I have seen clients completely ignore sound advice and judgment then make mistakes that I know will result in a mess. It is as painful to watch as it is for the client to experience. If the added pressure takes on a toll on the marriage and it becomes a divorce issue, a client's hearing can often get impaired - blocked by the loud sound of additional emotional stress. In my experience, a lot of money is wasted that could be netted out of the equity in the property by expecting the divorce attorney's to do the realtor's job. I have been referred by many divorce attorneys, and even judges in court ordered cases, to help with this situation, as it can quickly become out of hand. An experienced, calm and professional realtor is needed. Sometimes one spouse may not want to sell the home, despite it not being financially possible to keep it. A swift sale with both parties to move on with their lives is cheaper and and far less stressful than fighting over an asset that has become a symbol of the conflict, rather than an comingled asset.The buying public will smell the distress quickly and that will impact the value in a negative way. For divorce attorney and divorce mediation professionals, or for a market analysis please email me at email@example.com for a completely confidential appointment.
On the Brighter side.................
I personally think that we will see an increase in home sales in 2009, driven by lowered real estate prices, low interest rates and pent up demand from the last few years. So, if you are thinking of selling take heart, listen to good real estate advice and take the plunge.
If buying - the opportunity has never been better for all of the above reasons. Close your eyes take a breath and jump.... Come on in the water is fine.
Recently two of the directors Jock Langley and Robert Vickers-Willis returned from Hong Kong meeting expatriates and building new relationships with migration companies.
Having worked in more discerning markets we feel it is important to look outside the square and attract different buyers to the residential market place.
This has born fruit with our agency being a Finalist in the recent Age REIV Awards for
• Residential Marketing Campaign Budget $2,000 - $10,000
• Residential Marketing Campaign Budget in excess of $10,000
We are also please to advise that we were awarded First Prize in The Classified Display
The Board of the Reserve Bank of Australia decided to reduce the cash rate target by 100 basis points to 4.25 per cent at its monetary policy meeting on 2nd December 2008.
The Australian economy has been more resilient than other advanced economies.
With confidence affected by the financial turbulence and a very negative media, it is likely to see demand for housing purchases remain subdued in the near future.
With inflation expected to fall, we will probably see further interest rate cuts in the near future. Given the current economic climate, strong employment will ensure property prices will not drop significantly as they have in the UK, USA and EU.
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