All posts by Camilla McLaughlin

Realtors Become Agents of Change

FOR YEARS, NEW TECH COMPANIES HAVE BEEN THOUGHT OF AS THE ‘DISRUPTERS’ IN THE REAL ESTATE INDUSTRY. BUT SAVVY REALTORS ARE POSITIONING THEMSELVES AS THE AGENTS OF CHANGE.

The current market shift from buyers to sellers generates the most attention, but the number of sales and pace of price appreciation are only one swell in the wave of transformation rolling through the real estate industry. Technology is typically hailed as the disrupter, but changing demographics, new lifestyle aspirations and evolving buyer preferences are all at play in today’s real estate landscape.

“If you ask anyone that has been in the business more than 10 years, they say ‘here we go again.’  More paperwork, more platforms, more new companies, more new agents. Yet, ultimately real estate is the same. Our clients require handholding, advice, and moral support, deals get negotiated, and transactions finalize or fall apart. Yes, there are slight shifts in the marketplace, but generally, it still functions the same,” shares Lucio Bernal, a broker associate with Coldwell Banker Residential Brokerage in Palm Springs, who is also an expert trainer with the Institute for Luxury Home Marketing.

What is changing is almost every other aspect of real estate from tools to facilitate broker client relationships to virtual reality apps enabling buyers to envision making a prospective property their own. Increasingly agents are looking to their brokerages to keep pace with technology. “They are leaning on their brokerages, more than ever, to help arm them with tools, from digital marketing to smart, proactive customer relationship management systems (CRMs) that will keep them cutting edge, as well as those they can’t afford to leverage on their own,” says Stephanie Anton, president of Luxury Portfolio International. Additionally, affiliate groups like Luxury Portfolio and major brands have amped up marketing capabilities so agents can easily create a cohesive campaign.

There might be a technology revolution taking place in real estate, but market shifts are reinforcing the importance of the agent. “Technology has always been the present. It’s how you use it that benefits you the most,” shares Bernal. “The perfect example is: If you are dealing with a consumer, they are more likely to use you based on reputation and recognition than whether you know a certain app or technology platform. Technology should be used as a resource and compliment your ability to get face-to-face and maintain contact with a consumer.”

At this time last year, blockchain and the impact of virtual reality and artificial intelligence on real estate were being debated. Today, the chatter is about portals morphing from search engines to places to buy and sell homes, a new classification the industry characterizes as iBuyers. Opendoor, founded in 2013, started the trend, followed by others including Offerpad and Knock. Zillow and Redfin have also introduced iBuying in some markets. iBuyers purchase consumer’s homes outright using analytics that enable them to come up with a price based on the home’s perceived value, usually within days. Unlike homes sought by flippers, these are not troubled properties and offers reportedly are close to the value estimation. Other portals are beefing up offerings for consumers, adding mortgage and title services. Startups such as Purple Bricks offer a new twist on the flat-fee concept.

Investor dollars from venture capital and hedge funds are flowing into real estate, fueling many new ventures, which is another change potentially revamping the industry. “Everyone is investing in technology to disrupt or change real estate,” says Mark Choey, co-founder of Climb Real Estate, a San Francisco brokerage, which was acquired by Realogy’s subsidiary NRT in 2016. The real estate industry is rapidly shifting, and innovation is not just welcome, it’s desperately needed,” said founder Chris Lim, whose background is in marketing. Choey hails from the tech sector. Climb was the first brokerage to work with Matterport and continues to incubate emerging apps and work with new vendors.

ENABLING THE AGENT

Among traditional brokers, Keller Williams and RE/MAX are often noted for new tech initiatives, but almost every brand and national affiliate group is boosting technology offerings and platforms, often through relationships with providers and new tech venders including virtual staging, enhanced CRM and 3D tours and imaging. Technology ultimately benefits consumers, but traditional brands and affiliates say their focus is enabling their agents to do a better job.

“Everything has shifted in many different areas from the brokerage level, the buyer level, who the buyers are, what they are looking for,” says Sally Forster Jones, executive director, Luxury Estates, Compass. “I think there is a shift in the way that brokers are functioning. They are more innovative with more technology and more marketing as opposed to the older traditional real estate firms.

“Consumers care about responsiveness. They care about the fact that if they reach out to an agent, whether it be on their website or mobile app the agents gets back to them instantly, and technology can help with that,” says Marilyn Wilson, founding partner of real estate consultants WAV Group and also a founder of RETechnology.com.

“Technology has always been the present. It’s how you use it that benefits you the most. The perfect example is: If you are dealing with a consumer, they are more likely to use you based on reputation and recognition than whether you know a certain app or technology platform. Technology should be used as a resource and compliment your ability to get face-to-face and maintain contact with a consumer.”

Lucio Bernal

Broker Associate, Coldwell Banker Residential Brokerage

Tapped by Google to create a virtual staging app using augmented reality, Sotheby’s added Curate to agent toolboxes last year. Not only can a homeowner visualize a home before buying, but a partnership with a home furnishings company allows potential buyers to virtually furnish the home as well.

“A depth of understanding of what a property has is really important to consumers. The other thing that consumers are responding to online are floorplans,” says Wilson.

GETTING REAL WITH VIRTUAL

In the last year, GeoVC, a tech start-up offering 3D immersive tours and floorplans that can be created using next generation smartphones, integrated virtual staging, exterior 3D scans, and aerial 360-degree panoramas captured with a drone with interior 3D tours. “Outdoor imagery is captured using a regular drone, automatically processed into a 3D model, and integrated together with interior virtual tour. Such an exclusive experience will differentiate luxury properties with beautiful facades and roofs, and spacious lots,” shares Anton Yakubenko, co-founder and CEO of GeoCV.

“Luxury has really turned into personalization now,” comments Thompson. Tools like Curate, RoOomy and virtual staging apps enhance opportunities for personalization. Thompson explains: “Someone can walk into a home and say, ‘not my style,’ but it doesn’t matter because I have the tools that allow me to make it feel like what I want it to be.”

Even Compass, which touts itself as “The first modern real estate platform, paring the

industry’s top talent with technology,” says technology is there to benefit the agent. “Compass is building for the agent. Every program, tool, and service is (created) with the agent in mind. Many of the other real estate technology companies out there are working to improve the consumer experience and not focusing on the agent. We believe that by empowering the agent, consumer experience will be improved,” says Sarah Vallarino, head of West Region Communications at Compass.

“Talking to agents, the message we consistently heard was ‘give us technology,’” says Thompson. “They didn’t necessarily know what that technology was just that they needed it. They understood that the industry was changing, and consumer behavior was changing. They know because they’re the boots on the ground and so they can feel the shift in consumer behavior.”

As markets shift, agents are retooling, once again looking at how they do business and what skills and knowledge will be required. “It’s always either somewhat of a buyer’s market. It’s somewhat of a seller’s market. You just have to have your tools in your tool shed and the mindset to be nimble enough to adjust as you read the tealeaves, ” is Wilson’s suggestion.

“Luxury has really turned into personalization now,” comments Thompson. Tools like Curate, Ro0my and virtual staging apps enhance opportunities for personalization. Thompson explains: “Someone can walk into a home and say ‘not my style,’ but it doesn’t matter to me because I have the tools that allow me to make it feel like what I want it to be.”

AGENT PIVOTS

“Many long-time successful agents are being the clever, resourceful entrepreneurs that they are and changing with the market as the market shifts,” says Anton. “Agents today talk about how much of their time and value derives from being an educator for their clients. They partner with their clients to keep them armed with as much information, insights and insider activity as they can, so when it comes time, for example, for an agent to recommend a price reduction, the client is completely aware of the statistics, days on market, what is moving and what isn’t. Nobody wants to have an overpriced home that is sitting and not selling even in a hot market.”

“Today, clients will attempt to collect their information on their own, perhaps from incorrect sources, so agents report pivoting, now more than ever, to spend a lot of their time educating their clients,” she says.

Regarding slowing sales or price appreciation, Anton says: “I highly recommend agents tell the truth, focus on educating their following/clients, and in the process, let their own voice be heard and be themselves. If the market is cooling, share the stats and manage expectations. It’s not the time to be overly positive and cheery as you will come off inauthentic and salesy. Focus on the facts, insights and provide professional guidance.”

“Agents have to stay on top of what is available to them and the consumer. It is imperative to be able to explain the data, to have polished negotiation skills, and to know when to assist the consumer in processing that information,” says Bernal.  

“Agents should take full advantage of all the resources that the brands they work with provide. The majority of agents won’t, and that has never changed. Those that want an edge in the industry recognize that there is value in resources and take advantage of some of them. For most agents, resources are overwhelming, and therefore don’t take the time to learn and use them,” says Bernal.

Thompson recalls, “We had to dig in and find out what exactly is it that they (agents) need that will make a difference for them in their day-to-day because they think, you know, there are lots of real estate brands that tout themselves as technology companies, but they really don’t have anything really different.”

“Everything has shifted in many different areas from the brokerage level, the buyer level, who the buyers are, what they are looking for. I think there is a shift in the way that brokers are functioning. They are more innovative with more technology and more marketing as opposed to the older traditional real estate firms.”

Sally Forster Jones

Executive Director, Luxury Estates, Compass

EYE ON THE FUTURE

Mark Choey from Climb says, “I think you’re going to see a lot of change in the next year or two,” most likely from many directions. Choey is head of Climb’s Innovation Lab. Having an innovation lab, particularly for a small company, is in itself an innovation. “You’re going to have some business models that are going to evolve, like Opendoor and Knock, that are really going to change the way people buy and sell homes, but it’s not gonna change everything, right. You’re going to have Redfin, Zillow and others come out with tools and things that are going to attempt to either reduce the commission or to simplify to transaction. On the other hand,” he says, “you’re going to see traditional real estate firms arming themselves with technology.”

And while some tout themselves as technology companies, Thompson doesn’t see traditional and technology as being mutually exclusive terms. “You don’t have to be one or the other. People think of Sotheby’s as a heritage brand because we’re been around for close to 300 years now. But a heritage brand can also be tech savvy. It doesn’t have to be one or the other.”

Looking ahead, Bernal says, “The real estate industry has to take both a broad look and a hyper-local look at where the marketplace is based on data and individual perspectives. We say that real estate is local, yet there are many determining factors that create a web of interconnected behaviors throughout the world of real estate.”

Consider Los Angeles, Manhattan and Miami, where the impact of fewer international buyers extends beyond sales and prices. Post-recession, international buyers became a market force determining  what was being developed, locations and price points. On the West Coast, view properties and contemporary architecture were particularly favored by Asian buyers, and new builds were often geared to these buyers. Now many L.A. buyers, particularly in higher price points, are local or hail from the U.S. and have different expectations of luxury with walkable locations and neighborhoods taking precedence over views. “That’s a shift and it will continue to be a shift because we have a lot of properties coming on the market geared toward that international buyer,” says Jones.

The desire for the ability to walk to shops and restaurants is happening across all price points, according to Jones, and these new preferences are not limited to L.A. Walkability has been associated with urban settings, but increasingly this characteristic is being applied to suburbs, towns and master-planned communities.

Traffic and gridlock also add to new preferences for locations. In the not too distant future, traffic itself may be seen as even more of a disruptor than it is now, changing where people live and property types.

Photo of Lucio Bernal by Cherie Johnson for Moncherie Fotography. Photo of Sally Forster Jones by Lauren Hurt. Photo of Kevin Thompson courtesy of Sotheby’s International Realty.

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Art-Centric Home is a Work of Art Itself

A home inspired by art and designed to showcase master works becomes a work of art in itself.

Upscale properties are often conceived to showcase art, but it’s rare to find an estate comparable to the villa featured on our cover. Known as The Chow Residence, the home was built by the legendary restaurateur Michael Cho and Eva Chow. It reflects their passion for art. Not only is it designed to display an exceptional collection, but it could also be considered a work of art itself. Like all masterpieces, this property is the result of seven years of careful curation and construction.

For inspiration, the owners looked to the Reina Sofía museum in Madrid, the curved ceilings at the Pradro, the Lanvin atelier in Paris and the elevators at the Hermés, eventually hiring Mexican architect Humberto Arigas to bring their vision to fruition. Here Spanish architecture, Art Deco, Venetian influences, contemporary art and Chinese antiquities happily mix with 400-year-old Moorish columns and 18th century Florentine ceilings in a diverse palette that seems ideally suited to the magnitude of the structure. The centerpiece is a dramatic two-story, 30-foot tall atrium from which rooms on two levels branch out.

The lower level is devoted to collections and amusements, including space for a collection of vintage cars, extensive wine storage and an underground theater.

Museum quality rooms are only one quality that makes this property exceptional. The location is the best street in the city. “Mapleton Drive is as good as it gets,” says Jeff Hyland, who along with his partner Rick Hilton, is marketing the estate. It is also one of the very few sites in Holmby Hills offering a view of downtown Los Angeles. A rooftop deck is oriented for these premium views, and the addition of a kitchen and a bar make it ideal for entertaining. “You can have 100 people up there,” Hyland adds. Hilton & Hyland is offering the property at $78 million.

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Posh and Pre-Loved

Secondhand has gone upscale.

The names tell the story. The Vault Luxury Resale. The RealReal. Poshmark. Once the domain of nonprofits and local mom-and-pop stores, consignment and resale has become a big business, with new ventures adding a high-end twist to a timeworn model.

Resale, in which retailers purchase items directly from consumers and sell them outright, frequently replaces the traditional consignment model. No matter the method — consignment or resale — items are often not new. Still almost everyone in the business would be hard pressed even to utter the word “used,” instead opting for pre-owned, pre-loved, gently worn and secondhand.

“The attitude about resale has changed significantly over the last five years. The new consumer mindset sees the value in purchasing high-quality, well-made items that can last a lifetime, and our model creates access to these items,” says Rati Levesque, chief merchant for The RealReal, which sells luxury goods online (and in two recently opened brick and mortar stores) on consignment. ThredUp, one of the first online companies to focus on second-hand apparel for women and children, estimates 70 percent of their shoppers, which they often call “thrifters,” have never purchased secondhand before.

Used items from premium labels such as Gucci, Hermes, Louis Vuitton and Chanel have always been in demand, often only obtained through a very small group of discrete local shops. In 1991, Sue McCarthy opened a consignment shop in St. Louis, eventually realizing that purchasing items outright was better suited to her upscale clientele. Today, she heads a multimillion-dollar enterprise, trading the original 400-square-foot storefront for a 7,000-square-foot boutique. Her roster of clients extends worldwide with approximately 15,000 individuals who send items to her. Additionally, along with her daughter who is the company curator and verifies authenticity, she frequently travels to view and purchase items from some of the largest closets in New York, Paris, London and other cities, something she calls “shopping the closet.” Clients include some of the world’s wealthiest women and celebrities, and more than a few stylists have her on speed dial. Also, customers travel to St. Louis to shop in her store. For some, like one group of female lawyers, it’s become an annual event.

 

 

The RealReal began at Julie Wainwright’s kitchen table and is now a major player in online luxury consignment. Following other online merchants, they recently opened stores in Los Angeles and New York and plan to add more brick and mortar locations in 2019.

Julie Wainwright

Photos courtesy of The RealReal.

When it comes to selling secondhand items online, eBay was a game changer and 1st Dibbs broke new ground for luxury sales online. In the industry, ThredUp, which started with a pilot for peer-to-peer online sharing of men’s shirts, established the resale niche online. Now the company claims to be the world’s largest online marketplace to buy and sell women’s and kids’ secondhand clothes.  

James Reinhart, co-founder and CEO of ThredUp says, “There is a powerful transformation of the modern closet happening and I’m proud that resale is a key driver of this transformation.” ThredUp estimates current resale market for apparel at $20 billion and projects the market to grow to $41 billion by 2022. Investors have taken notice. ThredUp, The RealReal, Poshmark and others have captured venture capital. Waiting in the wings as further resale disruptors, according to ThredUp, are depop, Rebagg, Tradesy and Grailed. Additionally, startups such as The Luxury Closet are tapping into a nascent resale market in Dubai.

ThredUp estimates approximately 13 percent of their most active thrifters are millionaires. Several years ago, McCarthy tried an online store but decided a focus on social media would make the best use of their online staff. They have a massive following on Instagram and Facebook, running special sales and events weekly. “We cast a wide net over every product,” McCarthy says. “Once we put an item up it sells almost instantly.”

The industry claims resale benefits the environment and most major players support a charity. But McCarthy believes her process allows wealthy clients to amp up their support of nonprofits. “We’re able to monetize it better for charities,” McCarthy says. Instead of receiving a check or cash for their items, many of their wealthy clients opt to donate the money to charity. “If they give the $2,000 purse to charity, the charity is going to sell it for $200. If they give it to us, we’re going to pay them a thousand dollars. We make the check out to their favorite charity,” she explains. But many opt to take the resale funds and use them to purchase the latest and greatest, underscoring the secret to resale. “The lady who wants the latest Chanel or Gucci bag is going to be the same lady that wants the next latest one. And that gives her a good incentive to sell the previous bags,” McCarthy explains.  

Sue McCarthy

Sue McCarthy pioneered the luxury resale model with The Vault Luxury. Stylists and fashionistas have her on speed dial. And she is called on to shop the most indulgent closets in New York, London and Paris.

Photos courtesy of The Vault Luxury Resale.

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A Look at Today’s Home Offices

After a period of declining popularity, home offices are back. Sort of.

Ask designers and architects about home offices and chances are the responses will range from “no one wants them” to “we’re including them in every house.”  When it comes to home design headlines, it’s hard to compete with au pair suites and pet rooms, which tend to generate colorful images. Home offices might be humdrum, but they are gaining their share of the spotlight as more individuals spend some time working at home. And the more substantial the work, the more likely they are to look for a private office or work space.

Not too long ago, designers would have told you that home offices were passe as owners preferred to work in various spots around the house. Today, offices are back as a growing number of homeowners and potential buyers tick off a room to work at home, even a private office, on wish lists. The American Institute of Architects’ most recent home design trends survey shows offices as growing in importance, up to 39 percent from 33 percent a year ago. Interestingly, 58 percent of architects say interest in outdoor living, which tops the list of features growing in popularity, is increasing. Au pair/in law suites grew to 41 percent.

“A few years back we had a lot of homeowners requesting desk space in kitchens. We don’t get that as much anymore as people are looking for more private desk spaces that can be closed off from the rest of the house” says Sean Mullin AIA, director of design at Anthony Wilder Design Build in Cabin John, Maryland.“We’re adding office spaces in almost every house these days. I am working with a lot of empty nesters who are keeping additional bedrooms for future resale but converting one of them into a home office. They often want an isolated location for privacy with pocket doors or some other features to close off the room for privacy, while leaving the space otherwise open as a study or formal sitting room,” says Luke Olson, project manager at GTM Architects in Washington, D.C.  

The 20-Hour Work Day

Today many jobs can’t be crammed into a single 8-hour time slot. Traffic and congestion also mean more individuals work at home at some point during the week. “With new technology making it easier than ever before to be in touch with people at any time of the day or night, it’s hardly surprising that workers are demanding that their increased efficiency is offset by great choice of location,” was a conclusion of a recent report from the International Workplace Group, which drew on insights from 18,000 professionals in 96 countries. And for a growing number of affluent individuals, including those opting to make their second homes a full-time residence, their base for work might be the home.

Instead of a completely dedicated individual space, many home offices today might start as a flex space or found space in an alcove, or even under a stairway.

©IStockphoto.com/MonkeyBusinessImages

Tall windows and sunlight make an inviting office in an alcove off a great room.

©IStockphoto.com/KatarzynaBialasiewicz

Among those who are not self-employed, the number of people who regularly work from home has grown by 140 percent since 2005, nearly 10-times faster than the rest of the workforce, according to The American Community Survey and GlobalWorkpalceAnlytics.com. The number of home-based self-employed grew by 7.3 percent from 2015 to 2016, with the number of home-based incorporated businesses increasing by 43 percent since 2005.  The population that telecommutes at least one day a week grew by 11.7 percent from 2015 to 2016, the largest year-over-year growth since 2008.

Even though mega-companies such as Yahoo and Hewlett-Packard have moved away from telecommuting for some employees, approximately 40 percent more U.S. employers offered flexible workplace options than they did five years ago. Still many companies reserve the option for higher-echelon management. Only 7 percent make it available for most of their employees. The globalization of business is an additional catalyst. A number of the Fortune 1000 around the globe are revamping their space requirements, because many of their employees are already mobile. According to Global Workplace Analytics, they are not at their desk 50 percent to 60 percent of the time.

Home Office Demand

Spans All Price Points

While an office or study might be expected in high-end homes, even production builders are carving space for work at home into their plans across most, but not all price brackets. John Burns Consulting’s recent consumer insights survey shows that 16 percent of new-home shoppers work from home full time, and the number goes up to 53 percent for those who work from home one day a week. Shoppers with higher incomes and at higher purchase prices are more likely to work from home at least one day a week.

“This shift to working from home has shifted demand for floor plans and in-home office needs,” observes Jenni Lantz, manager of Design Lens for John Burns Real Estate Consulting.

“While some workers are comfortable just working from their laptop on their kitchen island or couch, many want something more significant. There is demand for formal offices (or at least informal) at all price points, says Lantz, noting only those with a very low purchase price are willing to negotiate on this space.

 

A high percentage of John Burns’ employees work from home, and everyone has the flexibility to work at home if the need arises, Lanz says, pointing to her own experience to illustrate how requirements for office space can change. “When I first started working from home, I had a desk located to the side of my family room. It was miserable. I had no privacy when the family was home, and it was hard to leave work behind for the day. When I bought my house back in 2014, I got a formal office, which made things so much easier. I have a separate formal office just off my foyer with French doors. This allows me to close the doors if needed, but I like the glass since it allows me to be still connected to the world outside if my daughter is home.”

Flex Spaces, Libraries and Niches

Instead of a completely dedicated individual space, many home offices today might start as a flex room or found space in an alcove, or even under a stairway. Home offices also might take the form of a space that can be configured as a workspace but also be repurposed to another function. Michigan architect Wayne Visbeen says he includes flex spaces in many of his designs, which can then be used as an office.

“People need to think about how they are going to use the space over the day and over the course of a lifetime. You want to make sure that space has the ability to morph over time,” shares Ann Thompson, senior vice president of architecture and design at Related Midwest.  

In other instances, architects say they might include a private study that could be a set up as a formal office or a relaxed, but private, refuge. “In many instances we might make the dining room into a library, so it functions as a multiple purpose space,” explains Jim Rill, principal of an eponymous Washington, D.C. architectural firm. Dining rooms converted to a library might showcase a custom table that gives a place to spread out and play games while still available to host that once- or twice-a-year celebration.

“They are home management spaces, which are little niches that can be very charming, very functional, outfitted ergonomically with counters around and space for a printer.”

Photo by Morgan Howarth, Courtesy Anthony Wilder.

A small desk and a daybed ready a secondary bedroom for work or guests.

© Dustin Peck Photography Inc., Courtesy Mary Cook

The size and location of offices in the house may vary by potential use. “It does depend on the stage of life that you are in and it depends on the level of position that you have and the kind of job. But for sure, almost everybody is working from home in some capacity,” says Mary Cook, a principal of Mary Cook Associates, a Chicago-based design firm, noting the appeal spans generations and life stages from busy young moms to empty nesters. “So, I still say that you need a dedicated place, but that place is smaller, and it can now be flexible and adaptable.”

Many are more functional than in the past and often occupy less square footage. “They are smaller, usually 10-by-10, or 12-by-12, or they are home management spaces, which are little niches that can be very charming, very functional, outfitted ergonomically with counters around and space for a printer. We do a lot of those in back halls or off the kitchen,” explains Visbeen.

 

Putting the Home in Home Office

Other owners, say designers, want to make offices welcoming and warm. “Homeowners want the spaces to feel cozy. Incorporating a small gas fireplace or TV in the room will bring out the home in the home offices. Built-ins for books and plenty of windows for views will make it a space in which the homeowner will feel very comfortable working at home,” says Mullin, who explains some owners want a very simple space with just a desk while others might want a full set up with sofas, coffee tables and ottomans.

“Built-ins for books and plenty of windows for views will make it a space in which the homeowner will feel very comfortable working at home.”

Photos courtesy of GTM Architects.

Developers of new towers, whether for condo residences or luxury rentals, also take the desire for home offices into consideration for individual residences and for amenity spaces. Rather than traditional business centers, work areas may be found throughout amenity levels in some new buildings. And depending on the target demographic, they might take the form of community tables, booths, lofts, reading nooks, individual work stations and huddle rooms.

High-end condominium residences might include a library or study near the main gathering spaces as well as one in a secondary bedroom positioned away from distractions. And luxe work spaces such as these in new super towers might even offer panoramic vistas that surpass those in office buildings, giving new meaning to the phrase, view from the corner office.  

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Global Evolution: What’s Changed In Luxury Real Estate Since The 2008 Recession

In the 10 years since the recession, residential real estate, especially in the realm of higher-priced properties, has morphed into a worldwide enterprise.

“There is no question; people have more of a global mindset. They are looking for real estate in places they love,” says Stephanie Anton, president, Luxury Portfolio International, which several years ago adopted the tagline, “We’re global. We’re local.” The phrase aptly characterizes the status of luxury today.

“The saying goes that all real estate is local, but that does not mean that all buyers are,” said NAR President Elizabeth Mendenhall, CEO of RE/MAX Boone Realty in Columbia, Missouri.

Congeliano, Italy

Photo courtesy of Atlante Properties Luxury Portfolio International®

For the industry, the ramifications of globalization extend beyond merely who buys what, where. “Historically, real estate market dynamics were considered a local phenomenon. In the luxury sector, this is no longer the case, as the value drivers for prime property in one corner of the globe increasingly originate from a completely different region of the world,” explained Christie’s International Real Estate in its 2018 report Luxury Defined, noting this trend is most evident in secondary markets — second home and resort lifestyle destinations. In 2017, sales of resort and vacation homes grew by 19 percent compared to 7 percent in 2016.

Buying property outside of one’s home country is nothing new, but, until the 1980s, sales across borders were generally limited to resort enclaves or a pied à terre in Paris, London or New York, along with the occasional trophy property.

Today, rather than a specific location, high-end buyers are likely to search for a particular property type. “Buyers these days are looking in multiple markets. They’re not as geographically contained. So, if they’re looking for a ski chalet, they could be looking at a number of different countries and throughout the Rocky Mountains in the United States,” shares Laura Brady, president and founder of Concierge Auctions, who says her company initially saw indications of this trend with ranch properties, which are very unique. “Clients don’t care specifically which market they’re in; instead, they want the right property.” Founded 10 years ago, Concierge Auctions has a team in Europe and activity in 18 countries.

Perhaps it’s geography, but Americans typically first look within their own borders. On the other hand, Bob Hurwitz, founder and CEO of the Hurwitz James Company, says, “Wealthy foreign buyers are far more likely to be open minded about locations outside their country as their first choice, in my experience. It’s not difficult to understand if you travel a great deal. In many of the countries I visit on business, you will not find many Americans, but you will meet a wide variety of citizens of other countries.”

More than property and search preferences drive the shift toward a global perspective. “There are several factors contributing to the increased globalization of luxury real estate,” shares Anthony Hitt, president and CEO, Engel & Völkers Americas, who cites the rise of digital, social and mobile technologies. “Real estate is not immune to the changing patterns of consumption enabled by technology; clients have more visibility, and therefore interest, into international homes and listings.”

Experts also point to an increasingly global economy, changing work/life balance and how commonplace travel, for both work and pleasure, has become. Craig Hogan, vice president of luxury, Coldwell Banker Real Estate, plans to exchange his primary residence in Chicago for two small condos, one on Michigan Avenue and another in Puerto Vallarta. “Fifteen years ago, my partner and I never would have considered that. Today, we are mobile. Our careers take us all over the world.”

Falmouth, Massachussetts

Photo courtesy of Robert Paul Properties/Luxury Portfolio International®

“With the world that we live in now, it’s less important that you live where your business is or where you do business. So, you’ve got a lot of people just making lifestyle choices. They’re just picking the city that they enjoy the most, and they’re moving there,” shares Mike Leipart, managing partner of The Agency Development Group in Beverly Hills.

Post-Recession Roots

The foundation for today’s international dynamic lies in the early post-recession years. In 2007 and 2008, prices on average fell by approximately 17 percent across the globe. By 2009, 73 percent of the prime property locations surveyed by Knight Frank had experienced declines, and savvy buyers scoured high-end markets worldwide for bargains. At the same time, a growing uptick in wealth and wealth creation brought more buyers to the international market.

Wealth creation continues at the post recession pace, with the number of millionaires worldwide tallying at 22.3 million, according to Wealth X. Those with a net worth between $1 million and $5 million hold 40 percent of the global millionaire wealth, while the remainder is held by the ultra wealthy, those with a net worth in excess of $30 million (Knight Frank pegs the benchmark for ultra wealth at $50 million). From 2012 to 2017, Knight Frank says the number of ultra-high-net-worth (UHNW)  individuals increased by 18 percent, followed by another 10 percent gain in 2017.

Coldwell Banker Global Luxury estimates 32 million millionaires reside in the U.S. The U.S. remained the dominant nation for wealth in 2017, both among millionaires and the ultra-wealthy, according to Wealth X, although growth of this population and net worth in the U.S. was the lowest among the seven top-ranked countries. Japan was second with an 11-percent rise in the UHNW population, followed by China, Germany, the U.K. and Hong Kong.

Mexico

Photo courtesy of REMexico Real Estate/Luxury Portfolio International®

Globally, wealth in 2017 increased in all regions, with both Latin America and Europe showing a resurgence over 2016. “The confidence of foreign buyers is back,” says David Scheffler, president, Engel & Völkers France. “The Parisian luxury market has always attracted wealthy Middle Eastern buyers and continues to do so. Qatari, Kuwaiti, Saudi and Omani clients are looking for outstanding apartments and townhouses, the so called hôtel particulier. The trend to buy luxury properties in Paris is not just reserved for the ultra-wealthy, but applies instead to a wider range of affluent buyers. Some might look for a small 50- or 60-square-meter pied-à-terre, while others look for ‘representative’ apartments in the Haussmann style, up to 12 million euro.”

Over the course of the last 8 to 10 years, cross-boarder buying surged, ramped back, and picked up again. In 2016, global sales of luxury properties retrenched, partially in response to Brexit, government restrictions on wealth and the transfer of money. Markets bounced back in 2017, with sales of $1 million-plus properties up substantially.

Christie’s reports an 11-percent increase in sales, the best annual increase since 2014. Luxury properties sold in 190 days, indicating more realistic pricing in some markets and lack of inventory in others. Exceptions included New York and Miami, which saw an influx of new inventory and a shift in buyer interest. In Toronto and Vancouver, newly introduced cooling measures from the government slowed sales.

“I don’t think there is any indication that they [international buyers] are NOT looking in Manhattan. The indication is that they are either interested in the properties at lower numbers or they prefer to wait the market out and hope to buy when things are at a bottom (I have seen this many times before. It never works!). Nobody is moving to Detroit because they can’t find what they want in New York City,” shares Frederick Warburg Peters, CEO of Warburg Realty. “Russians and Europeans are far scarcer than they were in 2010 or 2011.”

Still, both for high-net-worth and ultra-high-net-worth individuals, New York follows Hong Kong as the best city for prime properties.  

Nassau, Bahamas

Photo courtesy of Bahamas Realty/Luxury Portfolio International®

Toronto, Canada

Photo courtesy of Harvey Kalles/Luxury Portfolio International®

Following the recession, a growing body of research focused on wealth and global cities publish multiple rankings. A city’s position may shift slightly, depending on the research, but all reports include the same top locations for luxury properties. Hong Kong places ahead of New York in Christie’s 2017 index, with New York moving up to second, followed by London, Singapore, San Francisco, Los Angeles, Sydney, Paris, Toronto and Vancouver.

Lower prices pushed Miami just out of the top 10, but the city remains a good example of the change international activity can spark. “The international market has arguably impacted Miami as much or more than any other U.S. market. The influx of capital from Europe, South America, Russia, China and Asia has permanently changed our community. The easiest example is by simply looking at our booming skyline,” says Irving Padron, president and managing broker, Engel & Völkers, Miami.

The highest-priced sale globally was $360 million in Hong Kong, and despite government efforts to curb rising prices, there are no indications of slowing demand for luxury residences here. Also, adding to this market, according to Anton, is continued interest from mainland Chinese buyers.

Numbers Tell the Story

Rather than sales and prices, the best indication of just how global real estate has become can be seen in the expansion of major brands, affiliate groups, and even boutique firms worldwide. “All brands are connected globally,” Hogan observes, adding that even independents need some kind of a global connection. “It’s part of the dynamic,” he says.

Coldwell Banker is in 49 countries. Sotheby’s International Realty network has offices in 72 countries and territories. Luxury Portfolio International and Leading Real Estate Companies of the World lists properties in over 70 countries. Who’s Who in Luxury Real Estate’s network includes 130,000 professionals in over 70 countries. Berkshire Hathaway HomeServices recently opened franchises in Germany and in London. Bob Hurwitz had already positioned his boutique firm as an international player before the recession. Today, he has offices in Los Angeles, San Francisco, New York, London, Shanghai and Singapore.   

A global orientation can also be seen in members of the Institute for Luxury Home Marketing. There is “an increased focus and intentional approach as they target international buyers through affiliations with brands, networks and associations,” says general manager Diane Hartley. “In fact,” she says, “we have members in many countries outside of North America who are building relationships and sharing business with our members in the U.S. and Canada.”

Whistler, Canada

Photo courtesy of The Whistler Real Estate Co./Luxury Portfolio International

Firms based in Europe also continue to increase their footprint. Founded as a boutique firm in Hamburg, Germany, Engel & Völkers is now in 800 locations in Europe, Asia and the Americas, establishing its first offices in the U.S. in 2007. “We have experienced firsthand the globalization of luxury real estate,” says Hitt.

“For luxury and coastal markets, real estate has absolutely become more global,” shares Leipart. Like a growing number of independent firms, The Agency partners with an international real estate advisory company, Savills, which allows them to sell through 700 offices around the world. Still, he adds, “we are focused on international, kind of connecting the dots around the world as opposed to other cities in the U.S.”

In the luxury world, L.A.’s star continues to rise, and the city in recent years has figured into lists for top global markets. According to the National Association of Realtors, Florida, California and Texas remain the top three destinations for purchases from foreign buyers, followed by Arizona and New York. Still, just under half of all residential transactions for foreign buyers took place in other states. Among buyers, China, Canada, India, Mexico and the United Kingdom account for the most purchases.  

Also, Hogan points out, international buyers in the U.S. aren’t always in luxury markets. For example, Asians love to buy real estate close to a university. Another group looks for locations with smaller downtowns. Still others want a large home with a big yard near a lake or river, something hard to find in their home country.

As Much As Things Change

Even though foreign buying in the U.S. slowed in 2017 compared to prior years and to overall activity worldwide, international buyers still have their sights on the U.S. “It’s all about consumer confidence. As long as people feel that the U.S. economy is in good shape and it’s going in the right direction, they’ll buy real estate,” says Brian Losh, chairman of Who’s Who in Luxury Real Estate.

Connections to local markets remain essential.  “I will say a lot of it still happens in a very traditional way. People are either coming to L.A. a lot, either they have a child in school here, or they love the area and they decide to buy a home, and they do that through a local Realtor, regardless of where they come from,” observes Leipart.

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Nuances: The 2019 Luxury Outlook

Usually, it’s possible to sum up the outlook with a pithy phrase, but this year the luxury landscape is nuanced. Some markets sizzle; others simmer. Dynamic outside forces are at play and will potentially exert even more influence in 2019. In the background, the words recession and bubble are whispered, but most experts don’t see either in the cards, particularly for residential real estate in 2019.

“In most markets, I think it’s a case of ‘from great to good,’” says Stephanie Anton, president of Luxury Portfolio International.

“We’ve left a crazy market, and we’re moving into a more normal market,” shares John Brian Losh, chairman of Who’s Who in Luxury Real Estate. “We are beginning to see a more normalized market where supply is more equal to demand. Even in the luxury market, there are fewer bidding situations.”

According to Redfin, the number of competitive offers fell from 45 percent to 32 percent in 2018. Still, some ZIP codes in busy markets such as Boston, Washington, D.C., and the Bay Area remain hotbeds of competition, with the number of multi-bid scenarios increasing in the third quarter.

© istockphoto.com/JZHUK

Concerns about potential bubbles continue to percolate, but economists and other experts caution that fundamentals are strong and for real estate the next downturn will be different. “The recent tax reform and increased government spending have been a shot in the arm of the U.S. economy,” Tim Wang, head of investment research at Clarion Partners, explained to journalists at the Urban Land Institute’s fall conference. Wang and other experts expect the current expansion of the economy to continue through 2019, tapering to 2.5 percent next year.  

“The housing market is following the trend in the overall economy, which needs to be noted because housing led the last downturn,” comments Marci Rossell, chief economist for Leading Real Estate Companies of the World, citing politics and global uncertainty as factors affecting real estate. This time, she says, “the casualties will be a little bit different, and because of that I don’t anticipate a meltdown.”

A cooling period is how Craig Hogan, vice president of luxury at Coldwell Banker Real Estate, characterizes the luxury climate, particularly in the second half of 2018. It’s a change Coldwell Banker has anticipated. “For any of us to think it was always going to be incredible is a little naive. The market is always going to fluctuate.” Hogan says it’s important not to interpret cooling as a market decline. “Cooling is a normal fluctuation, while a decline happens when the value of homes begins dipping.”

“There hasn’t been any great price suppression. Houses are staying on the market a little longer, but demand is still healthy,” says Losh.

“I think we’re still going to have a very strong year overall. I do believe we’re seeing price adjustments, and that’s okay. I think the key is watching how long properties are staying on the market and watching the size of the price adjustments,” observes Lesli Akers, president of Keller Williams Luxury International.

The average sales price for Sotheby’s transactions is up year over year. “From a luxury point of view, many of our companies are having a record year,” says Philip White, president and CEO of Sotheby’s International Realty. “Revenues are up, and in some cases pretty significantly,” he shares, noting that this number also reflects significant recruiting and/or acquisitions by some companies.

Recent stats show prices for upscale properties still increasing, but at a slower pace than past years. The number of sales in many places has dipped, but that differs by location, and in more than a few instances sales still exceed 2017.

Data from the Institute for Luxury Home Marketing (ILHM) shows median prices for single family luxury homes climbing 8.5 percent in November over October, while the number of sales fell 11.7 percent. For attached luxury properties, sales rose 2.6 percent with a 2.3 percent hike in prices.  

Putting the current market for real estate overall into perspective, Lawrence Yun, chief economist for the National Association of Realtors, said, “2017 was the best year for home sales in 10 years, and 2018 is only down 1.5 percent year to date. Statistically, it is a mild twinge in the data and a very mild adjustment compared to the long-term growth we’ve been experiencing over the past few years.” Yun and other housing economists are quick to point out that new construction still hasn’t caught up with demand and foreclosure levels are at historic lows, factors which make the current climate different than the run up to the recession. NAR’s forecast calls for an overall price increase of about 3 percent in 2019 while the number of sales flattens or edges up very slightly.

Tale of Two Markets

Luxury’s story is a little different. “This year the luxury market has been a tale of two markets, for sure. Some areas are struggling, but most have been stronger than many realize, particularly in the first half of the year. As median prices have been slowing (and getting lots of media attention), the top 5 percent of many major metro markets nationally have been growing, with sales over $1 million up over 5 percent year over year and prices breaking records, in some cases by double digits. In the majority of markets, inventory has been selling faster. This is happening simply because of the health of the affluent,” observes Anton.

What sets this year’s outlook apart is that some places are having a strong, dynamic market, while others are seeing a softening, often only in specific price brackets. “The slowdown that started on the East Coast is having some effect on the West Coast. But it’s not a typical slowdown,” says Mike Leipart, managing partner of new development at The Agency. “Good product that has relative value is continuing to transact.”

The top three sales nationally in the third quarter, each over $30 million, occurred in Laguna, and seven out of the top 10 were in Southern California.

Rather than a general market malaise, Leipart characterizes the slowdown as more of a spec home problem. “It’s just too much has been built too fast, and not all of it is very good. The people who thought they could build a house for $15 million and sell it for $30 million are struggling.”

The higher price points in L.A. may see an even stronger downturn in the near future, suggests Bob Hurtwitz, owner of Hurwitz James Company, who typically works in the very high end. “There is a lot of inventory on the higher end, and luxury home buyers are usually in a position to wait and see. The drops in price are a lot more dramatic on property at $15 million and above, and buyers are aware of the benefit in waiting to see how it plays out. At the ultra-high end of $100 million or more, you are going to see and already are seeing huge reductions in price.” What’s hot in L.A.? Luxury penthouses in full 24-hour security buildings in prime areas, according to Hurwitz. “High-end penthouses will continue to be in-demand from foreign buyers purchasing as a part time home or for housing for their children.” Other price brackets, notably the $1.5-million to $3.5-million range, are busy, and, Hurwitz says, his agents are doing a lot of deals.

Perceptions of prices in Manhattan can be skewed, since recent closings are often for new construction for which contracts (and prices) were written a couple of years prior. Even though stats show sales decreasing, Ellie Johnson, president of Berkshire Hathaway HomeServices New York Properties, says, “There is still a healthy but steady group of buyers that are still out there in the high-end luxury landscape.” Additionally, New York is particularly keyed to Wall Street, and volatility in the stock market often means more money gets transferred into brick and mortar. “We’ve seen an uptick that we didn’t have at the beginning of the fall season,” Johnson observes. Despite a less than stellar real estate market at year end, New York remains a global gateway and the top city for global wealth.

Manhattan

© istockphoto.com/CreativeImages1900

Los Angeles

© istockphoto.com/SeanPavonePhoto

St. Petersburg

© istockphoto.com/SeanPavonePhoto

In other locations, particularly those with lower prices for upscale properties compared to California, Florida or New York, reports show strong interest and price growth. An acre in one of Atlanta’s prime addresses in Buckhead can demand as much as $1 million. It’s just one indication that luxury here continues to reach new price levels with considerable demand coming from outside the region, including buyers from California and Florida. Some relocate simply because they want a home in the city; others follow corporate moves. The city has also become a favorite for the film industry, which has become a $4 million industry. “It’s changing everything about this city,” says Debra Johnston with Berkshire Hathaway HomeServices Georgia Properties. Luxury really doesn’t begin until the $5 million threshold, says Johnston, but prices compared to Florida and California are reasonable.

At one time, it was thought it might take more than 20 years for Florida real estate to recoup from the recession. In October, the state tracked 82 consecutive months of price hikes for both single-family and condo-townhouse properties, with many cities showing double-digit increases in the number of sales. “The overall market in Florida, particularly higher-end areas such as Sarasota, Naples and Palm Beach, is definitely strong and stable. Maybe not as robust as say 2013 and 2014, but we haven’t had any major slide — except the economists talking about the market slowing down,” says Pam Charron with Berkshire Hathaway HomeServices Florida Realty in Sarasota.

“The St. Petersburg market seems to be performing differently than other Florida markets and other national trends,” observes Tami Simms with Coastal Properties Group, noting November sales skyrocketed over the prior year. “We have developed into a year-round market with luxury downtown condominiums in high steady demand.” Another sign of consumer confidence is lack of defaults on pre-construction sales. “When we experienced the crash, those buildings that had been sold out prior to completion experienced a significant number of defaults. We see none of that in this instance.”

Florida is one of several states including Texas and Nevada benefiting from changes in tax law. Tax changes not only force some to reevaluate where they live, but they also impact the margins of price brackets. “While it doesn’t mean people wholesale leave New York or San Francisco, marginal changes tickle up and trickle down to the next closest price level,” and it will take several years for that to be felt, says Rossell.

The New Market

“So many trends have taken place they are no longer trends, they are the new market,” observes Hogan, using new construction as one example. “It doesn’t matter where you go or who you talk to, new construction is part of the conversation.”

Global demographics will have a long-term impact. “What luxury is adjusting to is a different demographic worldwide. Those aging baby boomers are kind of done with big homes and the following demographic is 50-percent smaller,” Rossell says.

Changing demographics affect location and property type. “I think we’ll see increased demand for primary residences in traditional second home and resort markets. We are seeing this trend in select markets, as individuals who have the freedom to work remotely are opting to live in places where they feel their quality of life will be the best,” observes Anthony Hitt, president and CEO, Engel & Völkers Americas.

Summer 2019 will mark the most prolonged economic recovery since World War II, but wild cards including interest rates, a trade war and further instability could easily derail this expectation. However, there is a silver lining to the current market. Increasing inventories will bring some buyers back to the market and create more demand. “I think it’s going to a be a great opportunity. People will buy things that they haven’t considered, and they’re going to buy more of them. I think that’s been a big challenge. We’ve not had the inventory, and a lot of buyers kind of just fell out of the market because they didn’t feel like there really was one,” explains Akers.

ILHM President Diane Hartley believes 2019 will be a year of opportunity for both buyers and sellers provided they remain agile, innovative and adaptable to their local market influence.

This story originally appeared in the Winter 2019 edition of Unique Homes Magazine. 

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Markets to Watch in 2019

Every year we select locations to highlight as Markets to Watch. This year change is underway and we take a look at some top performers, others that are beginning to transition, and a handful of under-the-radar locations that are emerging.

Austin, Texas

On track for another record with sales up more than 3 percent, Austin’s luxury patina shines ever brighter. In October, the medium home value in Barton Creek increased to $1.02 million, making it the city’s first million-dollar neighborhood. Austin’s charms include no income tax to win over newcomers, but music and tech might be tops.

Bozeman, Montana

Bozeman might seem like a sleeper on this list, but with ranches, the Yellowstone Club and Big Sky country it’s an under-the-radar hangout for demi-billionaires and billionaires.

Brooklyn, New York

No longer second best! Buyers are making Brooklyn a first choice. Median prices in the most expensive neighborhoods hit the $1 million mark. Israelis, Chinese and Western Europeans also gravitate here. It’s no surprise this New York City borough is No. 2 on Urban Land Institute’s Markets to Watch. 

©istockphoto.com/Auseklis

 

 

Chicago, Illinois

By August, the Chicago area recorded as many luxury sales as in all of 2016 or 2017. Sales of $1 million-and-up properties set a record in the third quarter with a 19-percent increase over 2017. According to RE/MAX, luxury is booming in the west loop area. Upscale suburbs trail the city. Lots of new condos and stunning new buildings open doors to more urban opportunities in a market that hangs in the balance.

Dallas, Texas

Few cities have charted a post-recession course as strong as Dallas and the city remains Urban Land Institute’s No. 1 location for overall real estate prospects in 2019. But the dramatic post-recession price increases are over, say economists. Moderating prices and adjusting inventories are positive indicators that that a move back to a normal market is underway.

© istockphoto.com/Kanonsky

Denver, Colorado

Real estate’s Rocky Mountain high isn’t over yet. Denver continues to rank in the top group on many lists. In the upscale bracket, a shift toward balance is underway with the inventory of $1 million-plus homes at about seven months. Year-over-year prices are up on average 9.29 percent. Boulder remains a sweet spot for luxury, ranking 10th among cities and towns with at least 10 neighborhoods considered million-dollar.

Las Vegas, Nevada

Projections call for appreciation as high as 10 percent this year. Nevada was the fastest growing state, with new platinum communities; forward-looking, innovative architecture; and spectacular views capturing the attention of buyers looking for lifestyle and tax relief.

Hilton Head, South Carolina

Coastal South Carolina and Georgia are ground zero for demographic shifts and the growing ability among the affluent to live wherever they want — a trend just taking off. New developments including Palmetto Bluff add to demand for the Hilton Head region.

Minneapolis, Minnesota

Moving toward balance. A long-awaited uptick in homes on the market is one of several hints of a market shift. Median prices reached a record high this fall, and homes still sell quickly. Still the inventory of homes for sale is one of the lowest in the country. Upper tier and move-up brackets are less competitive.

Northern Virginia

D.C. continues to be in the top group on watch lists but Amazon’s recent announcement makes real estate in Northern Virginia much more interesting. What the prospect portends for current homeowners is uncertain, but sure to make this a market to watch in 2019.

Park City, Utah

No longer just a ski hangout, this Salt Lake neighbor is luxury’s newest player. The most desirable neighborhoods see a shortfall of inventory. Land prices increased by 25 percent with the highest number of sales occurring at Promontory. Opportunities abound: new projects at The Canyons, a large expansion of Deer Valley, a $4 billion renovation of the Salt Lake airport and a bid for the 2030 Olympics.

Wikimedia Commons / Don Lavange

Portland, Maine

Beaches and skiing, does it get any better than that? Hipsters meet old money here. Ranked among the top 20 for entrepreneurs, the city has a growing tech industry and one of the best foodie scenes in the Northeast. Look for more new construction. Prices will continue to ease upward as more people discover this hidden gem.

© istockphoto.com/DougLemke

Santa Barbara, California

Opportunities for buyers in many California locales continue to increase as markets shift. Median prices in Santa Barbara in November were down more than 25 percent, which is good news for buyers. The area remains a prized luxury refuge and lower prices open the door for newcomers to enjoy one of the most unique locations in the U.S.

Sarasota, Florida

The city’s iconic waterfront is being reimagined with a vision to increase cultural programming and urban amenities. Median prices have been increasing steadily, up 25 percent since 2014. New construction means more inventory with more on the horizon. Agents report steady and growing interest in individuals from high tax states.

© istockphoto.com/KarolinaBorowski

Seattle, Washington

Happier times are ahead for buyers in Seattle with active listings up by 41 percent. Even though inventories are still slim, it’s a good indication the frenzy is over. Closed sales in November were down 28 percent. Homes continue to appreciate but the increase has slowed to 5 percent. For buyers and sellers this is definitely a market to watch. The city still is in top groups in many rankings, but the frenzy is over.

Wikimedia Commons / Jeff Gunn

Toronto, Canada

Canadian Baby Boomers and Millennials came together and turned up the heat on the luxury condos in 2018; single-family home sales decreased by as much as 44 percent. While the foreign buyers tax has reduced sales to overseas buyers, it’s also opening new opportunities for locals. Local buyers will continue to drive demand for condos here.

Resort Markets

Luxury’s top performers in 2018. Not only are residences in demand, but new resorts are raising the bar for luxury and reinvigorating current markets. New developments in Turks and Caicos, including the ultra-indulgent Gansevoort Villas, turn up the heat on interest in the Caribbean. Easy reach from the U.S. and private enclaves generate new interest in the Bahamas. Cabo San Lucas, Mexico is seeing new resorts and other regions along the Sea of Cortez are seeing new development. Mandarina in Nyarit is the site of One & Only’s first collection of private homes. Owning a private island continues to be an ultimate purchase and the Bahamas is ground zero.

Thanks to:

Austin Board of Realtors

Michael Saunders, Founder and CEO Michael Saunders & Company

Anthony Hitt, President and CEO, Engel & Völkers Americas

Aleksandra Scepanovic, Co-Founder and Managing Director of Ideal Properties Group

National Association of Realtors

Northwest Multiple Listing Service, Kirkland, Washington

RE/MAX  Canada

Trulia

Zillow

This story originally appeared in the Winter 2019 issue of Unique Homes Magazine. 

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An Equestrian Legacy

Follow the Poplar trees along the long driveway of the manor featured on our cover, and you arrive at a perfectly executed example of Georgian architecture. Surrounded by gardens, fruit trees, pastures, a riding arena and a six-stall barn, it could be mistaken for an East Coast hunt country classic, but this stunning estate occupies approximately 5.8 acres in Los Ranches Estates in Orange County’s Coto de Caza.

Inside, the residence represents the historical aesthetic but with a refined and decidedly Southern California interpretation. Spaces are sunny and airy with stunning appointments, premier craftsmanship and indulgent finishes. Here, new and old come together to create a home that is current but timeless.

A curved stairway with inset panels lends a charming flourish to a dramatic entry. Often treated as a fifth wall, the ceilings enhance the singular ambiance of each room. The library features a stunning fireplace and an ebony glazed wood paneling, intricate wood ceiling treatment and heavy iron glass doors opening to adjacent outdoor spaces. Walls clad with rustic stone lead to a subterranean wine cellar and tasting room.

The spacious family room with a detailed metal coffered ceiling, fireplace and French doors leads to a secluded garden with a fireplace, covered pavilion and outdoor kitchen. Formal living and dining rooms increase options for entertaining. A covered cabana adjoins the swimming pool. The architecture is significant and the interior spaces dazzle, but what makes this estate special is that it is as entirely-fenced total refuge. A separate guest house includes three bedrooms, two baths, gourmet kitchen and large deck. The six-stall barn with turnout includes tack, office and storage for grain and hay.

Mariann Cordova with Berkshire Hathaway HomeServices California Properties is offering this estate for $15.9 million, a price that reflects value more than cost.

This story originally appeared in the Winter 2019 issue of Unique Homes Magazine. 

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Future Perfect

Cities today are perched on the brink of a far-reaching transformation that will make tomorrow’s urban center radically different than today.

All over the globe, the groundwork for cities of the future is taking place in what Urban Land Institute and others characterize as “a wave of innovation that is already starting to transform urban areas.” Asia, China, Singapore, Japan and South Korea are all pursuing smart city initiatives, building entire metros from the ground up. Elsewhere, projects might be more modest, limited to a section of a city or addressing specific challenges, but they are no less visionary. In North America, concept cities and neighborhoods are underway in Denver and in Toronto. Atlanta, Miami, San Jose, California; Portland, Oregon, and a growing number of metros are incubating innovative strategies to address traffic, gridlock, energy use, conservation, wellness, connectivity, safety and overall quality of life. On the forefront of all these projects are tech companies, including Sidewalk Labs, a subsidiary of Google’s Alphabet, Panasonic and AT&T, acting as catalysts for change as well as stakeholders.

What cities of the future will look like might still be uncertain, but a growing number of policy makers, government entities and private industries are working to clarify the vision.

Outside of Denver, Peña Station NEXT is beginning to take shape around the last light rail stop before the airport on 400 acres of farmland that developer L.C. Fulenwider Inc., has owned for decades. Initially, the plan for a light rail line connecting the city with the airport did not include a stop at this location, but Fulenwider worked with the city to secure one. “It truly was a public/private partnership,” says Ferd Belz, president of Fulenwider, a 114-year-old Denver company. The plan was to build a transit-oriented development at the site. At the time, Panasonic’s search for a place to construct a new technology center had winnowed down to Denver and another city. The tech company saw the 400 acres at Peña Station as not only an ideal location, but also as a blank canvas to develop, test and create the prototype of a smart city as part of its smart cities initiative.

“It’s a transit-oriented development, so we have all those components of life, work, play and walkability. With Panasonic coming onboard, we’re really trying to utilize technology and look to those that are transformative not only for our inhabitants but for the country and the globe,” says Belz, who sees the community as a “living laboratory.” Almost everything from air quality to ground temperatures and vibrations will be monitored, but most important, as in smart cities overall, will be the ability to process that data, respond to changes and use the information to enhance day-to-day life.

Renderings courtesy of Peña Station Next.

Central swaths of green studded with art, water features, walking and running trails, and bike paths are an essential ingredient designed to create community. Pocket parks, rather than parking or traffic, dominate the overall scheme of Peña Station next in this view. A drone’s eye view also shows extensive integration of solar.

The project builds on experience from the Fujisawa Sustainable Smart Town in Japan, a pioneering community of smart homes that combines energy efficiency, solar power and batteries. Panasonic led development of the Fujisawa microgrid by connecting town buildings to a central real-time energy network, which is critical when managing the demands of renewable tech and real-world needs.

Construction at Peña Station NEXT has been underway for a couple of years, with completion slated for 2026. Already in place is Panasonic’s 112,500-square-foot operations and technology center, along with 1.8 megawatts of solar panels, part of a solar microgrid tied to 1.5 megawatts of battery storage and backup to store excess energy generated when solar gain is high (and then distribute that energy later when solar production slows). National recognition for the Peña grid includes the Environmental Leader 2017 Project of the Year award.

At buildout, there will be approximately 1.5 million square feet of office space, 500,000 square feet of retail and 2,500 residences. Autonomous shuttles will transport residents between offices, residences and the rail stop. In the future, Belz also envisions these shuttles going to other neighborhoods in the area. Currently, Fulenwider is working on plans for an entertainment district as well as a wellness component. This past spring, Colorado developer McWhinney broke ground on a Hyatt Place hotel.

Peña Station also underscores what most experts say is crucial for future urban development: the importance of collaborative relationships that bring together public and private entities along with a myriad of local stakeholders. Energy company Xcel is also participating in the project, along with the city and county of Denver, Denver International Airport and battery storage integrator Younicos.

Photo by Nicola Betts.

Giant screens and event lawns bring new uses to urban parks.

Mike Zeto, general manager for AT&T’s Smart Cities and emerging IoT solutions, says the key to change in current cities is the creation of an “ecosystem” of both large technology companies and smaller ones. “From a public/private partnership perspective, you can have a partnership that’s from one company in the city or multiple companies in a city that allows you to pull all the solutions together and then come up with unique ways to fund them, whether by each company participating or by the city being able to take some of that data and being able to monetize that data that’s anonymous and aggregated,” Zeto adds.

LED streetlights are essential to Peña’s infrastructure, and LEDs with a digital component — including controls, cameras and an array of sensors — are becoming the backbone of smart urban networks. For cities looking to transition to the future, Zeto says, most “are starting with lighting, because that is the one thing that is ubiquitous across the city.” Vertical infrastructure is top priority because it saves money, increases efficiency and promotes safety. Second is intelligent transportation systems and traffic, and, Zeto says, water conservation is the third focus for cities.

How intelligent lighting is employed also underscores the utility of the Internet of Things. In Atlanta, for example, AT&T Smart Cities partnered with Georgia Power, deploying intelligent LED lighting with a digital infrastructure that includes multiple cameras, environmental and audio sensors. The integration allows the use of the cameras for public safety, but also to gather traffic data and information which can be used to create efficiencies, lessen congestion, reduce fatalities and enhance planning for pedestrian and bicycle safety. Parking can also be monitored. All the sensors and digital capabilities are embedded in the lights, which Zeto characterizes as “smartphones for municipalities.”

Wavedecks, such as the one featured here in Simcoe, are signature features along Toronto’s waterfront.

Also essential from AT&T’s perspective, according to Zeto, is ensuring “we are creating inclusive societies using technology strategically. So, not just the nice areas, if you will, but the underserved areas as well. We need to make sure that we are spreading the investments, so everybody has the opportunity to benefit.”

Panelists at Urban Land’s 2018 Asia Pacific Summit agreed the human element is crucial to the design of smart cities. “We want to promote freedom, equality and participation; the smart city ought to be liberating,” said Doshik Yang, director of the Centre for Future Waterfront City, the master planner for Busan Eco Delta City in South Korea, which will house 80,000 individuals.

Approximately 85,000 residents are projected for Town Square, a new community about a half hour from Dubai developed with the objective of providing housing for middle-income earners. What sets this plan apart is the premium placed on social interaction and engagement in a community with a substantial diversity of residents. Ways for residents to connect with each other and with nature were significant considerations for Bassenian Lagoni Architects of Newport Beach, California, who designed the overall plan. Central to the mixed-use community is a half-mile-long central green space that includes jogging paths, skate parks, water features, multiple parks, a giant screen for outdoor movies, and is surrounded by retail establishments, restaurants and residences in mid-rise and high-rise buildings.

The human element is also fundamental to the vision for Quayside, a new community rising on Toronto’s Eastern waterfront on Lake Ontario. The objective for Quayside is to blend cutting-edge digital technology, cleantech and advanced building materials with human-centered urban design. Touted as the world’s first neighborhood “built from the Internet up,” Quayside is a collaboration between Sidewalk Labs, a subsidiary of Google’s Alphabet, and Waterfront Toronto. Connectivity, according to Sidewalk, will be integral to its foundation. Not only is this project a public/private effort, but a number of local groups, citizens and nonprofits have been invited to participate in the process. Like other visionary designs, public spaces including bike paths and pedestrian ways are essential to the plan, which also features an adaptable mix of building uses and amenities. According to Sidewalk, the neighborhood will also be the site of a new urban innovation institute, a campus devoted to solving the toughest issues facing cities.

Innovative modular construction is expected to produce lower-cost, quicker-to-build structures that can adapt to a variety of future uses, residential or commercial, and changing family dynamics. Some suggested plans envision walls that can be moved or repositioned.

Early visions also call for a thermal grid that taps multiple existing sources of energy for circulation and reuse, making it possible to heat and cool buildings without fossil fuels. Sidewalk expects to capture enough renewable energy through an advanced microgrid to meet Waterfront Toronto’s goals for onsite power generation.

Sidewalk will adopt Passive House building standards that go beyond LEED. Another pilot will be a smart disposal chain in multifamily buildings that consists of sensor-enabled waste separation for recycling and onsite anaerobic digestion for composting. Also, plans call for piping that will facilitate the reuse of graywater. 

It’s hard to see change happening until widespread adaptation makes you realize the future is now. Until then, as all these test cities come to fruition… practice makes perfect.

Corktown Common is another infrastructure collaboration of Waterfront Toronto. The 16-acre park, constructed on a former Brownfield site, is a verdant oasis that includes a marsh and woodlands along with trails for walking and cycling as well as settings for sports, public art, and a multi-function pavilion. Play areas include interactive water features.

Photos courtesy of Sidewalk Toronto.

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Pouring with Panache

Rather than an adornment to elevate a table, those in the business see stemware as an instrument to convey the wine’s message.

Anyone who inherits even a modest collection of vintage crystal is often surprised with the variety of sizes and shapes, especially if the collection dates from an era when fine wine was a privilege of a limited few. Vintages were served with elegance, while common table wines might only merit a jelly jar.  

Today everyone wants to pour with panache no matter the cost of the wine or whether the event is a backyard barbecue or a black-tie soiree. “Even if people are not wine drinkers, many still want to have a good set of all-purpose glasses. Nobody thought of that 25 years ago, even 10 years ago,” says Jay Buchsbaum, executive VP marketing and director of wine education at Royal Wine Corp.

RIEDEL PERFORMANCE SHIRAZ

RIEDEL PERFORMANCE CHAMPAGNE

RIEDEL PERFORMANCE SPIRITS

What’s considered an acceptable vessel can range from a basic tulip shape that works for both reds and whites to a growing number of silhouettes designed for specific varietals and grapes. Claus Riedel was one of the first to recognize the effect of shape on the perception of wine and spirits. In the 1970s, his eponymous company introduced glasses based on the character of the grape. Today, Riedel continues to innovate, introducing collections designed to enhance the experience of a range of varietals and grapes, including New World wines.  

“It’s all about physics,” says Gabe Geller, top sommelier at Royal Wine Corp. “The bowl of the glass is designed with the surface area in mind. Red wines generally need to breathe, so a fuller, rounder bowl with a wide opening suit them best. Whites stay cooler in bowls that are straighter on the sides.” Rosés can be served in white wine glasses, but there are also glasses with shorter bowls that are slightly tapered with a flared rim for the best experience. “The rim affects the way you sip. The flair helps direct the wine directly to the tip of the tongue,” says Geller.

A wine glass’ architecture includes the base, stem and bowl; variations in the bowl define the experience.

“It’s all about physics,” says Gabe Geller, top sommelier at Royal Wine Corp. “The bowl of the glass is designed with the surface area in mind. Red wines generally need to breathe, so a fuller, rounder bowl with a wide opening suit them best. Whites stay cooler in bowls that are straighter on the sides.” Rosés can be served in white wine glasses, but there are also glasses with shorter bowls that are slightly tapered with a flared rim for the best experience. “The rim affects the way you sip. The flair helps direct the wine directly to the tip of the tongue,” says Geller.

Photo courtesy of the Royal Wine Corp.

“The truth is it can be as simple or as complex as you want it to be. The varieties are endless,” shares Geller. “A good universal wine glass is perfectly suitable for anything, from your summer afternoon Ramon Cardova Rosado to a vintage Bordeaux such as Baron de Rothchild Haut-Medoc.”

Stemmed vs. stemless? In part, it’s a matter of preference and utility. The absence of a stem does “not change the ability of the wine to show its best in terms of aromatics and flavor. The same swirling and the same tapered top that is necessary for a wine to show its best can be duplicated,” says Buchsbaum, who does have some reservations regarding the ability of a stemless glass to maintain proper temperatures.

Photos courtesy of Riedel, from the Flickr account of Bettina Lorenzoni.

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