Agents of Fortune
A roundtable discussion with four of the top real estate agents in Ultimate Homes
by Mark Moffa
While compiling the Ultimate Homes list, we couldn't help but notice that certain agent names kept appearing again and again. We thought it would be insightful to ask some of those who are representing the creme de la creme in residential real estate today about the ultra high-end market. How does a home get to be priced in the top 1,000? How do you market a home that only a select few can afford to buy? And what does the future hold for the Ultimate Homes market? We selected a few of the top agents from our list and asked them these questions and more. Here's what they had to say:
Meet the Agents:
Daniela Kunen
Managing director, Prudential Douglas Elliman,
23 years in residential real estate. Specialty: Large family apartments, co-ops and condos in the Upper East Side of Manhattan. Kunen once was called the "Park Avenue Queen" by a major magazine. She says she has a knack for matching buyers with the appropriate co-ops. She is a classically trained pianist, and twice was the Minnesota state champion. |
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John McMonigle
Group principal with The McMonigle Group/Coldwell Banker Previews International
13 years in residential real estate. Specialty: Ultra-luxury properties in exclusive Orange County, Calif., enclaves, including oceanfront, bayfront and large landmark estate properties. McMonigle enjoys golfing, taking his yacht to Catalina for scuba diving, spending time with his wife and four children, and hosting fundraisers for the Orange County Rescue Mission. |
Joyce Rey
Executive director, Estates Division of Coldwell Banker Previews International in Beverly Hills
30-plus years in residential real estate. Specialty: Landmark estate properties on Los Angeles' Westside, from Hollywood Hills to Malibu. Rey is the only agent with more than one listing in the Top 12. She says her business is her passion. But when she's not working, she enjoys following USC football, the arts, yoga, opera, dance and film (she recommends "North Country" and "Innocent Voices"). |
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Carlos Justo
Principal of SOL Sotheby's International
30 years in residential real estate. Specialty: Single-family waterfront homes in Miami and Dade County, Fla. Justo said his company will close between $300 million and $400 million worth of sales for 2005. He loves the water and spent three and a half months of 2005 at his home in the Virgin Islands. "Next year," he says, "the goal is to be there seven months. I love what I do. I love my clients. But my personal interest is not to work." |
Ultimate Homes Question: What is the current top pricing for Ultimate Homes in your market?
Agent Answers: Joyce Rey: I have top listings at $60 million and $53 million. The highest closed sale is $85 million.
Carlos Justo: Several buyers are willing to spend over $50 million. The numbers are crazy. They don't make any sense to me.
Daniela Kunen: $45 million.
John McMonigle: In the high $20 millions.
Q: What are some of the techniques you've used to market Ultimate Homes?
A: Kunen: I probably spend more money on marketing than any other agent in New York. I use professional photographers, brochures, mailings and virtual tours. I always have a professional, an architect, come out to draft a floor plan. So many times on the Web, they are not legible.
Justo: My success comes from, number one, knowing the market extremely well, having relationships with these owners of high-end properties and also listening to the client and getting out of the way of a deal. I do not do an awful lot of advertising.
McMonigle: I've used customized DVDs, gala parties hosted at the properties and tying in luxury retailers and products (jewelry, cars, fashion), dedicated Web sites and PR campaigns. Also, I use extensive brochures with Architectural Digest-quality photos, professionally written text and models photographed at the property.
Q: How does one price a home of this caliber?
A: Kunen: You work by comparison. Every time it has another unique feature, you go over and above. A 20-room apartment, for example, would be priced on square footage, and then you would add to that because there may not be any other 20-room apartments on the market in New York City.
Rey: It's a composite of factors. It has to do with the design and style of the house, it has to do with the amount of land, the amenities and the location. The difficulty is that the comparisons are fewer. You have maybe one other house that sold in that price range and it may have been many years ago.
McMonigle: The McMonigle Group utilizes a Wall Street approach by having full-time staff responsible for determining values with custom research formats that include componetized market analysis that break out land and structural values, view premiums, quality comparisons and also estimate shelf life given different list prices.
Q: What are some of the features or amenities often sought by buyers of Ultimate Homes?
A: McMonigle: Buyers are seeking amazing locations that offer uncompromised views, quiet, security and privacy. Regarding amenities, it goes without saying that everything needs to be top-of-the-line. We are seeing a lot more emphasis on state-of-the-art theaters, wine cellars and components that many homes may not have, such as equestrian facilities and large subterranean garages.
Kunen: They expect much more attention from the doorman. They like to be in a building that everybody wants. They want a layout where the kids don't have to walk through the public room to get to the kitchen.
Justo: McMansions are out. There are a lot of individuals now wanting something a little more practical. Miami has a great demand for contemporary design. And people want two bathrooms in the master bedroom.
Q: What are some of the things buyers at this level do not want to see in an Ultimate Home?
A: Justo: Something 15 years old is now old and is looked at as something that needs work.
Kunen: People don't want to do their own renovations. They would rather overpay. They don't want cookie-cutter rooms or scrunched rooms. And they want a "name" architect.
McMonigle: Deferred maintenance, bad floor plans, dark rooms, mold issues, construction nearby, et cetera.
Q: Who are the buyers and sellers of these properties?
A: Rey: When you get up to the highest numbers, generally it's captains of industry-people who have long records with major companies.
McMonigle: Entrepreneurs, captains of industry and, surprisingly enough, young families.
Kunen: It's a myth that foreigners are buying co-ops. The overwhelming majority are Americans. Co-op boards want to see a record of assets in this country. But the area around Central Park, AOL and the Trump International building is very mixed. When foreigners come to New York, they feel good when they see massive amounts of people-they feel safe. Americans are the opposite.
Justo: Versace, Stallone, Cher, movie stars, heads of state, the royal family of Saudi Arabia. The wealth of the world is coming to Miami.
Q: How long does it take for an Ultimate Home to sell?
A: Rey: It can be many years. This compares to 30 days to at most one year for lesser-priced homes.
McMonigle: Six to 12 months.
Kunen: Some of them take eight to 10 months to sell. But they sell within 5 percent of the asking price.
Justo: On the average, a home over $4 million in Miami takes about two and half years to sell. Most sellers are willing to wait. I offer an out after a few months. There are brokers who end up really wanting to commit a client. But I believe a contract between a broker and seller shouldn't be one that binds one to the other.
Q: In some markets, the high end is becoming a little crowded and sellers are finding the need to lower asking prices. Is this the case in your markets with the ultra-high end?
A: Kunen: Prices definitely came down 10-15 percent since January (of 2005). Now, I'm seeing a lot of sales, people are buying. The prices are right and they are getting their bonuses. The best value is in the Upper East Side. SoHo and Chelsea are over-valued.
Justo: Our sellers are too spoiled. Miami is not lowering prices yet. For sellers, it's a control thing.
Q: What is your outlook for the Ultimate Homes market in 2006?
A: Rey: We have a limited amount of inventory and we have a high demand and there's a lot of wealth. Outside circumstances could certainly impact us, a significant rise in interest rates being one of them, and even unemployment. Unemployment has certainly been an indicator for recession. But very renowned economists have been predicting a real estate bubble for a while and we really haven't seen that in our market.
McMonigle: I am bullish on the trophy market.
Kunen: The market is going to go up in the short term. People spend their bonuses and they like to spend it on real estate. Long term, it will depend on the economy and world events. Wall Street is usually a year ahead of what happens. We are definitely fueled by Wall Street.
Justo: The luxury market is going to go through a transition. Prices have doubled in three years. We have more luxury product today in Miami than has been built in the past 30 years. Buyers who are buying for investments aren't going to be able to recoup their costs. I'm a little concerned. There will be an adjustment somehow. It's too quick of a rise in too short a period of time. Most individual homebuyers have been priced out of the housing market.
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