Luxury Real Estate

By Jean-Yves Piton

While luxury properties are part of the conspicuous consumption group, unlike several other goods, their proposed premium prices are not a function of the premium brands they are attached to. Instead, factors such as location, amenities, space, architecture and historical value justify their premium prices around the world.

So, what type of luxury homes would you acquire in major metropolitan cites worldwide for $1 million USD in 2008?

According to “What $1 Million Buys in Homes Worldwide” by Matt Woosley, Friday, January 11, 2008, provided by Forbes.com, in New York, you can expect a 647-square-foot Turtle Bay condo with 45-square-foot balcony, white oak floors, and 11-and-a-half-foot ceilings. In London, you can purchase a one-bedroom, one-bathroom flat in Primrose Gardens. In Hong Kong, you can acquire a three-bedroom, 825-square-foot apartment in a high-rise between the residential areas of Aberdeen and Pokfulam.

While $1 million USD grants an invitation to the millionaire's club, it clearly does not buy the most spacious and astonishing luxury property in most top metropolitan cities worldwide in 2008. Based on the figures discussed earlier, such properties might just work as a pied-a-terre during a business trip or a short vacation.



This also explains why more buyers are currently opting for luxury fractional ownership, the trend ahead. This being said, keep in mind that this rapidly increasing trend applies to everything luxury in 2008 (from designer handbags to the finest properties).

So, how do you market a luxury fractional property? Evidently, it is easy to assume the same way you would promote a luxurious property. Partly due to the traditional premium variables like location, amenities, space, architecture and historical value. Also, though a fractional ownership, you could insist on the long-term investment, just as for any other luxurious property.

Nevertheless, there is another element, which must not be omitted to successfully advertise a luxury fractional property. That is promoting the dream to potential buyers and investors. There must be a fine balance of both emotional and rational communications to connect potential buyers to the properties through careful advertising. Where the rational communication focuses on owning a luxurious property (one of a kind), promoting the dream (the emotional communication) helps foster a sense of emotional connection (a state of being and/or sense of being).


Editor’s Note:
Jean-Yves Piton is the Global Services Membership Manager for LuxuryRealEstate.com. He assists Bente Madtsen, the Director of Global Services, in expanding the LuxuryRealEstate.com brand into even more countries around the world. Fractional ownership is a great tool for vacationers and other people looking for flexibility and great investment opportunities. I actually wrote an editorial on Private Residence Clubs, also known as fractionals, in the spring 2008 issue of LuxuryRealEstate.com Magazine. Check it out! The photos of the front and back of the “$1 million” bill are the copyright of Simon Davison.

By Jean-Yves Piton

With a devalued U.S. dollar against many other foreign currencies (i.e. Euro, Pound Sterling, etc.), now is the best time to invest in luxury real estate in the United States.

Whether this initiative is part of your diversification strategy or not, your property investment(s) in the United States will pay off in both the short and long term. Namely, your purchasing power is greater today in the United States and your ability to create greater returns in the future is increased tremendously.

To further exemplify present investment trends, I recently came across the following article “U.S. Real Estate Tops Foreign Investors’ List, Interest in Asia Grows” posted in the July 7, 2008 issue of www.Bostonsf.com.

The commentary reveals that, based on the results of the recent 16th Annual AFIRE Foreign Investment Survey, the U.S. real-estate market is at the top of global investors’ list.

Furthermore, “with 56% of the votes, the U.S. again emerged as the most stable and secure country for real-estate investment. No other country has ever come close to this number-one position. The second-ranking country has historically been the U.K., but this year Germany, with 10.5% of the votes, took that honor; Australia and the U.K., with nearly 9% of the votes, tied for third place.”

Agreeably, “this year, New York City and Washington, D.C. were named foreign investors’ top global cities. New York City leaped ahead by a substantial margin to be named the top global city, followed by Washington, D.C. and London in a tie for second place. Last year, New York City was ranked second globally and Washington was ranked fourth. Paris fell from second to fourth rank.”

Directly involved with global real estate on a day-to-day basis, I find such figures and trend eye-opening.


Editor’s Note:
Jean-Yves Piton is the Global Services Membership Manager for LuxuryRealEstate.com. He assists Bente Madtsen, the Director of Global Services, in expanding the LuxuryRealEstate.com brand into even more countries around the world. There are some wonderful opportunities available for U.S. buyers and sellers. One person’s downturn is another person’s bargain, so be sure to look for the good out there. The photo of the U.S. flag is from www.flickr.com/photos/tomsaint/2525886032 and it is the copyright of tomsaint11.

By Brian Langhorst

Lately, the keyword in advertising is international! Everyone wants international exposure as foreign currencies are very strong compared to the U.S. dollar. This strength presents great options for investors to come to the United States and purchase real estate. I agree that this is a great target audience, given the current situation.

I also wanted to throw out some facts from Forbes.com, which recently compiled a list of the top billionaires in the world. These facts drew my attention to the importance of continuing to market domestically as well as globally. Of the 1,125 billionaires in the world, 444 or 39.4 percent are citizens of the United States. This is by far the highest number of individuals in one country anywhere in the world. In your marketing campaigns be sure to reach out to both audiences.

There are several print magazines that do a very good job reaching both international and domestic buyers. LuxuryRealEstate.com Magazine, Unique Homes and Country Life all work very well. We are happy to help you design ads and market to these key groups. Please contact me with questions or to advertise: blanghorst@LuxuryRealEstate.com.

What are you doing to reach both domestic and international markets?


Editor’s Note:
Brian Langhorst is LuxuryRealEstate.com’s Membership Manager. He meets members’ unique needs through the dynamic services LuxuryRealEstate.com provides. In addition to these excellent publications, we also run group ads in The Wall Street Journal, and we have one coming up on June 27, 2008 that you can sign up for. Contact our Print Director, Courtney Jackson, for details.

By Robert Lockard

I originally planned on writing this blog entry earlier this week on the proposed settlement between the National Association of REALTORS® and the Department of Justice that would allow multiple listing service members to make private MLS information available to non-members. However, immediately after the story broke, plenty of real-estate bloggers came up with all sorts of reactions, positive, negative and neutral. Now I’m having trouble coming up with something to add to their expert opinions. I hope you’ll bear with me.

I’ll start by quoting Malcom Forbes (1919-1990), the father of Steve Forbes, current publisher of Forbes Magazine, “It's so much easier to suggest solutions when you don't know too much about the problem.” My knowledge of the MLS is certainly not as impressive as those who have already voiced their opinions, but I’ll just try to bring my thoughts to the table in an interesting way and you can feel free to correct me if I mistake some details.

It seems to me that this really shouldn’t be that big of a deal. I agree with what Geoff Lewis, Senior Counsel for RE/MAX International, said in Glenn Roberts Jr.’s Inman News article entitled “Blogosphere reacts to proposed NAR/DOJ settlement.” He basically said that a lot of the information that will be opened up to public use by this decision has already been made public through free online sites.

The majority of home buyers start their search for a new home online and so, if you think about it, they’re already finding the homes they’re looking for without needing to log on to websites controlled by MLS members. There’s a lot of free information already available online. For example, buyers don’t have to pay anything to search for luxury properties on LuxuryRealEstate.com, even though they can find more than 55,000 such properties in 100 countries on that site.

It’s advantageous for brokers to share information freely with buyers and sellers because then they can allow the right people to find the properties they’re seeking more quickly. At least that’s what I think.

As Mr. Forbes eloquently pointed out earlier, it’s easy to say what I think, but I might not have the whole picture. The MLS, which I understand is not a completely homogenized collection of listings but a variety of different ones in different formats, is not necessarily a public good. It was created by a private organization to give a competitive advantage to specific professionals, and there might be less of an incentive to provide this service if there are few limits to who can access it.

The Internet age is changing the way we think about many things, including marketing and real estate. But perhaps it’s still true that the more things change, the more they stay the same. Anyway, that’s my contribution to this wonderful exchange of ideas known as the blogosphere.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. I welcome your input on this story. The Multiple Listing Service logo above is from: www.nsrealestate.ca/listings4.htm.

By Scott Rudolph

I’ve been a fan of Forbes since I helped usher in our first “Best of the Web” and “Forbes Favorite” awards back in the year 2000. Since then, we’ve continued to earn “Best of the Web” status and I continue to tune in. Recently, I noticed an analysis of America’s Recession-Proof Cities by Joshua Zumbrun.

Don’t fret if your community is not listed in this particular article, there are many more:
Rebecca Ruiz files a special report after extensive research regarding America’s Best Cities For The Outdoors and while we choose to provide our high net worth private clients some privacy, Lauren Sherman satisfies the curiosity of those insatiable for scoop regarding their favorite stars in Second Homes Of The Stars. The list goes on and on of course. At the end of the day, I find there are talking points and real estate opportunities everywhere. Remember, I’ve said it before and I’ll say it again: all real estate is global.


Editor’s Note:
Scott Rudolph is the Director of Business Development for LuxuryRealEstate.com. He works with a variety of luxury-focused companies to expand the LuxuryRealEstate.com influence. These Forbes lists are great for us to review and enjoy. Check them out!

By Joey Pauley

I was reading an article in Forbes the other day about Celebrity Billionaires, including the likes of Steve Jobs and Donald trump. Unfortunately, after scanning the article I noticed my name did not appear anywhere. It may have been the lack of Billions or Celebrity status. Who knows?

I began to ponder what kind of Billionaire mansion I would have. Would it be a luxurious house in Los Angeles? Or a gorgeous Ranch in Telluride? The question is moot because, as all Billionaires know, you have to have more then one place to call home. One thing I am sure of (after reading Kimberly’s blog, entitled “All decked out”) is that both houses are going to have huge decks.


Editor’s Note:
As a Technical Account Manager with LuxuryRealEstate.com, Joey Pauley helps members with their Web and technology needs. He does a phenomenal job in all of his projects, as you can see by visiting the many websites he has helped design. I am reminded of a song called “If I Were a Rich Man” in one of my favorite plays, “Fiddler on the Roof.” One part of it goes,

“I’d build a big, tall house with rooms by the dozen right in the middle of the town,
A fine tin roof with real wooden floors below.
There would be one long staircase just going up and one even longer coming down,
And one more going nowhere, just for show!”

Dare to dream, Joey. Dare to dream.

By Scott Rudolph

Marketing the world’s finest real estate is an inherently global endeavor. Now that I think about it, this reminds me of the 1971 film, “Willy Wonka and the Chocolate Factory.” In the film, Wonka’s golden-ticket invitation was marketed globally in order to secure an excellent candidate to represent his precious chocolate factory. We undertake a similar initiative daily on behalf of our Luxury Real Estate affiliates and their private clients.

Representing one of the largest networks of luxury real estate professionals ever assembled via our seven-year “Forbes Favorite” website viewed by more than any other in our niche, and our globally distributed magazine, our scope has truly always been global. We represent the highest-caliber experts in the luxury real estate industry. They consistently achieve strong results, whether the market is “weak” or “strong.”

In the end, aggressive global marketing works. It’s expensive and it’s not for amateurs, so I encourage you to apply what you know and prepare yourself until you are an expert. Willy Wonka made one family extremely happy, and our hand-picked Who’s Who in Luxury Real Estate professionals can make you very happy, too. Please feel free to contact me directly at Scott@luxuryrealestate.com to learn more about specific tools we use to assist you. I’m 99 and 44/100 percent sure you’ll be pleased with the results.


Editor’s Note:
Scott Rudolph is the Director of Business Development with LuxuryRealEstate.com, which means that he works with companies in a variety of luxury industries to expand the LuxuryRealEstate.com influence. He’s excellent at answering questions, too.

By Robert Lockard

Check out this excellent article from Forbes.com, entitled “Priciest home sales of 2007.” After conducting extensive research, Forbes.com discovered that the top five most expensive U.S. home sales this past year were in Manhattan. In fact, two real-estate sales records were broken in New York City: the priciest apartment with the $60 million purchase of almost an entire floor of the renowned Plaza Hotel, and the highest price per square foot ($6,287) at another property in Central Park West. It’s safe to say that the luxury real estate market is alive and well in New York and other places.

It seems difficult to explain luxury real estate’s strength at the moment. However, in his Forbes.com article, author Matt Woolsey makes an astute point about high-end real estate markets: “Prices in the top sector are not affected by general market trends because, quite simply, they exist outside the general market.” In fact, luxury homes are so different from regular homes that they can only be compared to priceless pieces of art. They are seldom sold and are mainly considered second homes, assuring only sporadic use. Feel free to let me know your thoughts on this. Are luxury homes so distinct from other homes as to mark them as outside the regular real estate market? Perhaps this should have been an entirely different blog entry, but I hope you don’t mind.


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of Luxury Real Estate’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more.