Luxury Real Estate

At the head of Furer SA  , Philippe Furer – – fourth generation – and his wife Anne-Lise have been working in the family business for over 35 years, and are now its majority shareholders by a wide margin.

Philippe Furer, Could you give us a brief overview of your business?

After studying humanities and law, I was thinking about becoming a diplomat, but the circumstances of life decided otherwise. I started working for my father, Claude Furer, in 1973, and I’ve remained faithful to the requirements of quality, precision and discretion that were the founding values of Furer SA. Our staff of 27 are actively involved in property management, administration of co-ownership property, renovation, brokerage, expertise and consultancy, primarily on the Vaud Riviera and in the Lake Geneva area between Geneva and Lausanne. Reconciling the interests of owners and tenants is no picnic – it requires first class services and, above all, a genuine ability to listen. Our management teams deserve a medal every day!

The company’s head office is in Vevey, while our two dedicated brokerage operations are based in Montreux and Lausanne, under the expert leadership of our associate, Sandro Rigois.

Was the current economic crisis a surprise to you?

Not at all. I’d seen it coming for two years, thanks to political economics classes given by the late François Schaller and several books on 1929 that opened my eyes to the chain reactions that happen during severe economic crises – a vicious circle. However, I fear the current crisis might turn out to be worse than the 1929 one, due among other factors, to runaway demographics (in 1929 the global population was 1.8 billion; in 2009 it’s 7.5 billion), climate risks and technological ‘progress’ that even the most motivated in our globalised world – if you’ll forgive the tautology – are no longer able to control, not to mention the collapse of moral values.

Faced with ever-increasing violence both within and beyond our borders, we’ll have no option but to ‘believe and create’ (which was the theme of the national exhibition as long ago as 1964!); a fascinating, historic challenge for current and future generations.

In the context of your business, what steps have you already taken?

As early as March 2008, I did a U-turn by abandoning international brokerage – even though it seemed to offer promising development prospects – in order to free up the time needed to implement our strategic choices, namely: always striving to improve staff training, perfecting our management applications, strengthening the disputes department and, as a necessary corollary, reinforcing security measures. This inevitably means protecting people and property, making our IT resources as secure as possible and protecting our image. We’ve recently been promoting two new sections on our www.furer.ch website: “The legal expert’s view”, written by Eric Ramel, a member of our Board of Directors, and “The tax expert’s view”, written by Gérard Balimann, director of Fidinter SA, a renowned trust company.

And what are your plans for the immediate future?

Creating a ‘culture corner’ on our website, for which plans are already well advanced. This will include my favourites and discoveries in classical and contemporary music, history, philosophy, literature and fine art. Moreover, there will be a section dedicated to various humanitarian activities. I’m also pulling together various writings in view of publishing a small work, in the not-too-distant future I hope, on... No, wait – it’s still a secret!

Among other activities, you’re a judge at the Rent Tribunal. What motivates you to hold this role?

After 37 years’ service in civil and military security, an army officer has a duty to serve the community in another way: “Ask not what your country can do for you – ask what you can do for your country”. So it was natural for me to contribute to peace between landlords and tenants through the channel of conciliation, at the same time as maintaining my legal knowledge by exercising a type of law that is always more tricky: summum jus summa injuria.

What are your other interests apart from property?

I’ll answer that question indirectly; one of my best friends is a famous conductor who’s just published a book titled “De la musique avant toute chose “ (Music above all things) with resounding success. At the request of another great friend – a canon, organist and internationally renowned concert performer and composer – the Protestant that I am has just formed a committee for the restoration of the great organs of the Sacré-Cœur de Montreux Catholic church (www.orguesmontreux.ch). I spend my leisure time, of which I don’t have enough, at the piano (currently J.-S. Bach, Beethoven and Chopin). I’m passionate about history and philosophy and am often inspired in day-to-day life by the thoughts of that great Stoic Marcus Aurelius, about whom I sometimes give lectures. I’ve chosen one of his thoughts for your article 2. Apart from that, every day I stroke two superb cats while contemplating my beautiful wife. To stay fit, I cycle between 700 and 800 kilometres a month...

What do you like most? ?

The sound of a child laughing.

What do you hate most?

Vulgarity.

Anne-Lise Furer, you are Managing Director of Furer SA and Director of its co-ownership department. What motivates you?

I used to be a primary teacher and yoga instructor. After I met Philippe, I began to take part in the administration of the sales department in Montreux. When a position became available in the co-ownership department, I jumped at it without knowing where it might lead... It’s a fascinating area that teaches you patience, self-control and diplomacy – what you gain is learning the art of living in harmony with others. As everyone knows, the administration of a co-ownership property is not limited to resolving a building’s technical problems – far from it...

You’ve considerably developed the co-ownership department. What’s your recipe?

You have to constantly be disciplined, towards both yourself and others. My rural origins have helped me a lot in this regard. I also have a great team of girls I can rely on.

What are your other interests apart from work?

I’m an avid figure skater, forest walker and yoga enthusiast. I also look after my cats, Merlin and Morgan, as well as... my husband. The precious time I share with him helps us keep our relationship in balance. Finally, when that little lot leaves me the time, I also play the piano: J S Bach, Schubert, Mendelssohn...

What do you like most?

A person’s state of consciousness, which is the key to human evolution.

What do you hate most?

Deceitfulness or treachery, whichever you like.

I fully subscribe to Plato’s thought: “beauty is the splendour of the true”.

Is it difficult working together as a couple? Who wants to answer?

A.-L. Furer: No. The secret of success lies in the intelligent sharing of tasks: each of us has our own department and office. Philippe Furer adds: at home, each of us has our own bathroom (laughs) and piano, but only one kitchen where we prepare meals together, such is the extent to which a meal cooked well with two pairs of hands is as pleasant as a well-managed or administrated property!

Epicurus wasn’t far wrong...

Interviewed by Elisabeth Bastide-Kastl

An up-to-date report on how the worldwide economic crisis is affecting

the property market in Spain's most important resort city.

By Christopher Clover, owner and Managing Director of Panorama, Marbella’s longest established Real Estate Agency

Before the critical events of September 2008 and the following months, the property market in Marbella was suffering severely, as throughout Spain and the rest of the world, especially in the lower end of the market, and especially with newly built properties.

As the year advanced, it became clear that Spain's own economy was nowhere nearly as strong as the politicians were announcing before the March elections. The "easy credit" which was a primary factor in fuelling the Spanish property "boom" of the mid-1990's to 2006 had virtually dried up. Property companies started to go bankrupt, affecting the entire economy. The Bubble burst, hard times began with a bang and the repercussions ran deep.

On the Coast, the market for "off plan" touristic properties peaked in 2004 and has been on a descending curve since then, reaching crisis proportions last year. Nationally, the demand for new homes hit its peak in mid-2007, according to national statistics. Today, (with reliable statistics still lacking from the Government) the Bank of Bilbao Vizcaya Argentaria estimates that at the end of 2008 there was a glut of between 800,000 and 1,400,000 new unsold homes in Spain (19/12/08, http://prensa.bbva.com), including the Coastal properties, with an estimated 24,000 living units on the Costa del Sol (Diario Sur Domingo, 04/01/09), which will take years to be absorbed.

However, one cannot really analyse the market from the press reports which generally concentrate on new properties and the national market. There are different sectors belonging to different markets in different areas where there is a variance of some of the basic fundamentals at play, and one should not make the mistake of lopping every sector of every market in Spain into the same basket and reaching the same overall simplistic conclusion. For example, until September of last year, it went virtually unreported that the higher end of the luxury market, comprising mostly resale properties, had held up reasonably well, as elsewhere in the world, and the most expensive properties belonging to the Super Rich were even marginally increasing in value.

The World Financial Meltdown, starting in mid-September, changed the scenario

The rapid slowdown commencing in September began to affect buyers of Luxury Residences not only in Marbella but globally, exacerbated by the credit crunch and the difficulty in obtaining mortgages. A very low volume of sales has characterized the market on all levels in general in the last quarter of the year.

How much have prices dropped from their peak prices?

The percentages stipulated in the following paragraphs are intended to be indicative in nature and are based upon the first hand experience of seasoned agents in the Marbella area who deal daily with buyers and sellers, including property developers.

• Properties most severely affected are the least expensive (under €700,000), comprising principally newly built properties but not excluding resales, in the less consolidated areas. They have gone down in price from their peak values in 2005-2006 (defined as real sales values, as compared with asking prices, of similar properties at their highest historical point) by generally 20% to 30%, but in some cases, even up to 40%.

Properties in this price range achieving the best prices in a shorter selling period are located in better areas, and are usually resales, have descended in value from 15% to usually not more than 25%.

• Properties priced from €700,000 to €2,000,000 have seen a 20%-25% decline from their peaks (again, less so in the best areas) while those priced at up to €3.000.000 have suffered a lesser drop of 15%-20%.

• In the higher price brackets: fewer properties are for sale and although owners may be receptive to reasonable offers, in general they have the financial wherewithal to "hold out" if necessary. There are and will be some very good buys as, in some cases, even very wealthy owners simply want to "move on".

· Very special “one of a kind” properties, with unique characteristics, qualities and location, have not been substantially affected by the crisis, provided their asking prices are sensible.

Again, the same is true for the most expensive properties as the less expensive ones: the better the location, the better the market, and the easier it is to sell.

The pricing of properties by their owners, in most price categories, is now far more realistic than in the past. This process has been complicated, as usual, by some agents who tell owners what they want to hear, rather than explaining the realities of the market. Most sellers, however, have already sharply reduced their original asking prices, but many potential buyers do not take this into consideration when they place an offer.

What is selling?

Barbara Wood, (www.thepropertyfinders.com) in a well-written market report of Andalucia, stated recently "in the quality resale market it is not so much about over-supply but more a factor of how badly and how quickly does the seller need to get out that is driving the market."

There have obviously been sales since last September, but generally at substantially reduced prices, with the notable exception of truly unique properties which cannot be easily reproduced, or which a buyer has not wanted to risk losing by delaying. Many potential buyers think that vendors will drop their already reduced prices an additional 25% to 50%, without careful analysis of either the current market, intrinsic value, historical value, reproduction cost, or comparable sales being made right now. The result is that such offers simply throw a bucket of cold water on most sellers, and do not engage their interest to negotiate.

Other sales have been made between reasonable buyers (looking for a very good deal), and reasonable sellers, (looking to make a sale and move on, often to another property). Further sales are being made by those willing to trade up or down. These types of sales will continue throughout this difficult period.

Warren Buffet, who ranked number one on the World's Billionaire list in 2008, said in an interview last November: "I don't worry about the things that I really am not going to understand anyway. I worry about what's important and knowable."

What is knowable about the property market in Marbella that will be important in the coming months?

1. The demand factor is still there. The number of potential purchasers enquiring about and visiting properties for sale in this area has not plummeted, as worldwide property market stagnation might suggest. Viewings have dropped around 25% over last year's levels, as reported by the top agents in Marbella, coinciding exactly with Panorama's statistics of its own activity. However, enquiries via the internet actually increased during the last quarter of 2008, with respect to DM Properties and Panorama. The difference is that very few offers are being made, and many of these are totally unrealistic, as mentioned above. What is selling is limited to either very sensibly priced properties or very special properties from the standpoint of location, quality of construction or architecture, where a willing seller is ready to sit with a willing buyer and a good agent and see if they can realistically come together in harmony.

Strong supporting evidence of the still-present demand factor can be found in the study published last December by the company Globaledge (www.globaledge.co.uk). Claimed as the "biggest ever" study into global demand for overseas property", the study examined 1.4 million English-language searches on Google using property and real estate keywords.

In essence, the study measured curiosity and Spain was clearly more interesting to Web surfers than any other destination, beating France into second place by more than a two-to-one margin.

Clearly there is a continuing and increasing demand of people who want to buy property in Marbella, waiting for the right time to move, and some of them will unquestionably act in the coming months. More than a few potential buyers, having located “the right property” for themselves and taken the decision to wait, will be disappointed when they decide to take action and find that their ideal property not only has been sold, but that there are no similar properties at similar prices on the market to replace it.

What else do we know for sure?

2. The off-plan purchaser has disappeared, for the foreseeable future, and will not be missed. Speculators of this nature only distort the market place. The end-user has taken his place, a good sign of a healthier market to come.

3. Quality locations hold value best: The three most important words in buying property “location, location, location!” remain true. Prime locations in the Marbella area and everywhere in the world are holding property values and selling far better than non-consolidated and secondary locations.

An excellent illustration of the above can be taken with the Urbanization Marina Puente Romano, in the middle of the Golden Mile, beachside, and situated next to the famous hotel of the same name. There are a total of 248 apartments in this magnificent estate. Only 13 of them are for sale, at the date of this report. And of these, only two owners have shown clear signs that they want to sell quickly, have dropped their asking price and are encouraging offers. La Zagaleta, located just outside the Marbella municipal boundaries, representing a quality estate environment virtually unique in Europe, has just 200 completed villas, amongst which only around 25 are for sale. Therefore, those potential buyers who place all sellers in the same category, and are expecting a deluge of properties for sale in the very best areas at rock bottom prices, are in for an unpleasant surprise.

4. Buyer insecurity is history: With the recent provisional approval of the new General Plan of Marbella, which is due to receive definitive approval later this year, buyers will not be responsible for developer's sins, or failings of prior Municipal governments. Less than 400 living units are considered illegal under the new plan (compared with 19,000 before), and this phase of bad press and buyer insecurity is now virtually in the past.

5. Safe Haven seekers: Trust in banks and their investment products has declined. The stock market has burned so many people, that many will be unlikely to return. The logical alternative or “safe haven” for many will be that of well-located "bricks and mortar", bought at rock bottom prices, as among the most effective medium for future long-term investment, especially when coupled with usage and the well-known life style factors which make Marbella unique in Europe.

6. After the crisis, inflation: Governments have embarked on immense deficit spending in an attempt to pump their economies out of recession. Along with other measures taken, this enormous amount of money just now starting to be spent will eventually assist in reviving economic activity. But inevitably, printing money, pump priming, will result in inflation, significant inflation, and the prime beneficiaries of inflation will be those who bought properties at prices which are now reaching lows never anticipated only a few months ago.

Sophisticated investor buyers who have seen the above rule work time and time again, are right now in the market, looking to pick up the highest quality real estate they can at the best price, and will continue to be present for at least another two years.

7. A concentration of Wealth: There is a tremendous amount of wealth concentrated in the Marbella area. Economically speaking, this area of Spain will be less affected compared to the rest of the country, due to the higher level of stability in the quality end of tourism, which is its number one industry, and in the so-called residential tourism resulting from the use of first and second homes by international part-time and full-time residents. Wealth attracts more wealth, and there are still lots of wealthy people in Europe who want to live all or part of the year in Marbella for well known reasons.

8. A multi-source market: Although the Marbella market includes a good percentage (easily over 30%) of Spaniards who represent the foundations of the market in the first instance, it is nevertheless substantially more international than it is national. It is a multi-source market. This diverse international market base is the biggest factor which distinguishes the Coast from the national market, and will provide strength for a quicker recovery.

9. British sellers are providing better deals: With the pound plummeting by over 25% of its value at the beginning of 2008, and over 40% since its peaks in the year 2000, many buyers are finding that the very best buys can often be found with British sellers, who count their assets in Pounds Sterling, and can afford to sell therefore for a lesser amount of Euros compared with Euro zone resident sellers.

What about the future?

The Coastal market will probably start to recover during the last half of 2009, depending on the evolution of the current world situation, but certainly before the national market. However, this recovery will be very slow, and very gradual. One should anticipate at least three years minimum before the market can return to normal activity. In the context indicated, the beginning of a market recovery is defined as “a significant perception by the market of an increase in the volume of sales”. Price levels of course depend on the level of both supply and demand, and as buyers come back into the market in significant numbers, prices will gradually increase.

Why is it possible for a beginning of market recovery so soon?

When the last setback commenced in 1990, the beginning of market recovery took easily 4 years. The market then built up year after year, to a speculative fever commencing around the year 2000 and double digit annual price increases. However, Marbella today is not the Marbella of the early nineties, for the following reasons:

* In 1990, Marbella was seasonal in nature and had a real population (i.e. “off-season residents” including the floating population of people living here but not officially registered), of around 120,000 people. But when recovery was well underway, between 1995 and 1996, there were at least 150,000 people really living in Marbella off season. It was this “core population”, or critical mass of residents in the winter months which allowed Marbella to convert to a 12-month season, where restaurants, nightlife and sporting facilities could have enough business to remain open all year round. Today, this real population off season is estimated to be in the region of 225,000 inhabitants.

* A critical factor in making the above happen was the investment of hundreds of millions of Euros in infrastructure, improvements and new facilities of all types, both by the municipal government of the early Mayor Gil years, as well as by private investment which Gil was influential in attracting to the city. These were the “show business” years of the early Gil government.

* Events and their repercussions move today at lightning speed compared with just twenty years ago, due to “globalization”, interdependence of economies and the speed of communication. As the prices in Marbella reach their lower limits, which is happening already in some categories and in “distress sales”, the word will spread instantly and those who have been waiting to buy will come into the marketplace, which will be the start of what will no doubt be a long period before returning to normal market activity.

* But the most important factor is that there is just not a great number of quality apartments and villas out there for sale in the best areas, i.e. there is a limited supply. Marbella is not, in terms of numbers of villas or apartments, the West End of London, or Paris, or New York. The last official statistics date from the year 2001 census of the Instituto Nacional de Estadística, just at the beginning of the explosion of growth and building fever in Marbella and throughout Spain, and estimate that there were 80,172 living units in Marbella in that year. Extrapolating by the number of building licences granted in the interim period until now, there are only about 105,000 villas, townhouses and apartments in all of Marbella today. Of these 105,000 dwellings, in very rough terms, about 25% would be rated in the luxury end of the market, let us say properties priced over €500,000, and in quality, homogeneous residential areas. And of these, how many might be for sale? Certainly not more than between 5% minimum and 15% maximum. If one takes an overall estimate of 15% on average for all of the quality end of the market in the previously mentioned price range, that would give us only around 4,000 units for sale. Compare that with the estimate of between 800,000 and 1,400,000 unsold living units in Spain quoted earlier, and it is easy to see why we are talking about a different market sector.

It is for the above reasons, therefore, that it is probable that the market will start to lift off later this year. But, in the meantime, before this recovery commences, a gradually increasing volume of sales will be made, generally to buyers who have decided they do not want to postpone their plans further. Generally speaking, the type of properties they will purchase will be well-priced, or viewed as excellent buys for their location, price, condition and lifestyle factor, or rare and unique properties which cannot easily be reproduced. A good agent will have these properties on his books and the knowledge and skill to help the buyer negotiate successfully with the seller.

There are of course conditions to securing a solid, long-term recovery. Apart from the obvious financial liquidity necessary for the beginning of a world economic upturn, these comprise: transparent, corruption-free and efficient local governments (this is certainly happening now in Marbella with the brilliant management ability and transparency of Marbella’s new Mayoress Ángeles Muñoz and her team); better public services and communication along with increasingly good infrastructure, which has already been ensured by the Regional Government and recent municipal grants by the National Government to the Town Halls; and greater care of our environment for which, finally, all levels of government are bearing the responsibility, as is apparent in the new territorial plan and urban plans for this part of the Coast.

Provided the above comes to bear, and there is solid evidence to this end, Marbella will not only come out of the current recession stronger than before, but will set the standard for other quality resort cities worldwide.

By Michael Edlund

“The view is out of this world.”

I overheard this comment at an open house during our recent Luxury Real Estate Spring Retreat in San Diego. We visited an amazing property on top of a hill with vast spectacular views over a beautiful landscape. Spectacular, but still of this world. No matter how crazy, ridiculous and out of touch with reality it seems today, there might actually be a day when we buy and sell property elsewhere in the solar system.

There were a few articles published recently that made me think of this. First of all, I read about Virgin Galactic currently building Spaceport America with the support of the state of New Mexico. It’s a huge-scale initiative by the Virgin Group’s eclectic founder Sir Richard Branson, aiming to bring commercial space travel to the general American public no later than 2012. It is now decided that Virgin will build Spaceport Sweden as the gateway for European space travelers.

It’s not a matter of if but when wealthy individuals can add space travel to their wish list of spectacular experience and adventure travel. And it seems to be happening sooner than many might imagine.

With space travel, I would say that there will inevitably be a whole new service ecosystem created around this new branch of the travel industry. I would guess that one of them will be accommodation. That brings attention to The Lunar Republic Society, which sells acre-sized lots on the moon through its shop Lunar Registry.

Buying land on the moon sounds like a joke to us. Nobody owns the moon. Well, the natives of America told the European settlers back in the day that it was a joke to them to claim that man can own land at all. Manhattan was sold for $24 because nobody could imagine that land had any tangible value.

Yes, I see the difficulty for this organization to claim the right to sell moon property. But being the “Earth’s leading lunar real estate agency,” the tens of thousands of individuals that have purchased lunar lots though them are backing them in their claim. Regardless of which organization that officially wins the right to sell moon property, they will be in a very good position to do so.

Just for laughs, I did buy an acre lot in The Sea of Tranquility a while back. I never thought, of course, that there would be even a remote possibility for me to see it in my lifetime. But hey, who knows? I’m wishing Sir Richard Branson all the best of luck with his ideas – ideas that are truly out of this world. Talk about opening up a new market...


Editor’s Note:
Michael Edlund is the Director of Technology with LuxuryRealEstate.com. He is in charge of all of LuxuryRealEstate.com’s Web projects, including Web site creation, software updates and implementation, and much more. Lunar luxury? That's loony. Pardon my pun. It’s funny because I recently watched “The Right Stuff,” the great 1983 movie about the original Mercury 7 astronauts who paved the way for the Apollo missions and other space exploration. It’s funny to look at their primitive ideas of space travel, but maybe in 50 years we’ll look back with similar feelings about our current steps reaching for the moon and other worlds. I think I’d prefer to buy some property on Europa or Io.

By Jaime Sanders

I recently received a great email from Joanne – a wonderful real-estate agent in Folsom, Calif. Typically, I’m not huge fan of forwarded emails, but this one struck a nerve. It is about letting go and moving forward, which is really hard at times! Especially with the negative press in our industry, people seem to quickly forget about moving forward and start to drown in the mire of the news and problems in life. Please take a moment to read and think about HOW MUCH you can accomplish in 2008! Best wishes for the year ahead…

2007 is done...
...make 2008 unforgettable...

The 28 days of February stretch before you like blank pages of a Personal Diary. What will be written on those pages by this time next month? Next year? Will it be a tale of health, wealth, romance and wondrous prosperity...or will it be more of the same?

Fact is, the "movers and shakers" have long ago moved beyond 2007 and are looking ahead. Those are the same people who always seem to be "on top of their game" all the time. How do they do it? How can you run with this crowd? How can you leap one step ahead?

The simple answer is these people know the wisdom of "looking beyond today" and laying the groundwork for the months and years ahead. It's called taking action - Making a game plan, implementing, and CONTROLLING their future.

The time is NOW for YOU.


Editor’s Note:
Jaime Sanders is an Account Manager with LuxuryRealEstate.com. She assists many brokers in their endeavor to maximize exposure of their properties through creative marketing techniques. I definitely share Jaime’s sentiment of striving to improve ourselves in the present and future. Don’t worry about other people’s negative predictions too much – they’re just guesses, really. Simply focus on doing as much good as you can and improving yourself and your luxury real estate business day by day. That’s what I think.