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An "Off-Market World": Reflecting on Real Estate Changes since 2008

The practice is not new, but the frequency and acceptance of pocket listings has grown.

By Camilla McLaughlin

Off market … private listing … coming soon. These phrases in high-priced markets characterize properties offered for sale, but not publicly listed in the traditional manner in the MLS. The way these listings are perceived has changed significantly in the last 10 years.

Even after the advent of formalized platforms such as the MLS, the most expensive properties were often closely held, giving rise to the term “hip-pocket” listing. Traditionally, in the industry, pocket listings have evoked concern that unscrupulous agents would keep them in house and pocket the entire commission.

Post recession, the number of pocket listings seemed to increase exponentially; most in the industry remained skeptical. Today, the terms “off-market” or “private” listing are often used instead of pocket, and, in a number of places, it is becoming an acceptable — some would even say savvy — marketing strategy.

“Now I’ve noticed it’s really changed and it’s a lot more accepted,” says Patrick Ryan, senior vice president and managing broker, Related Realty, Chicago.

“It’s certainly become a very big part of our market, and it’s not something we’re necessarily driving. We’re being led by what the sellers want,” says Chris Dyson with The Agency in Beverly Hills.

In a survey of members conducted by the Institute for Luxury Home Marketing (ILHM) for Unique Homes, an overwhelming majority, 97 percent of agents responding, said private listings were part of their market. A third indicated there were only “a few,” while 17 percent saw it as a growing trend.

“As I travel around the country training agents from a variety of other states, I hear differing opinions,” says Florida agent Tami Simms with Coastal Properties Group International in St. Petersburg, who is also a trainer for the Institute. “In some markets, it works in a positive way, and in some markets, it’s considered to be underhanded.”

In the ILHM survey, 38 percent of respondents agreed that industry professionals looked more
favorably on off-market listings. About a quarter disagreed with this statement, while 35 percent neither agreed or disagreed.

The latest twist in off-market properties are platforms and professional networks, accessible only to licensed agents, designed to facilitate the sharing of information. The Top Agent Network, a national affiliation of agents in the top 10 percent of the market, is a forum for premier agents to exchange information. Additionally, networks formed just to publicize off-market properties are popping up in hot market cities such as Austin.

In August, several agents from The Agency in Beverly Hills launched thepls.com, the Private Listing Network. In little more than six months, the network claims 600 active listings worth $3 billion. Approximately 5,000 agents have signed on to the service. “Information shared on the platform is information they already email to one another on a daily basis,” says Dyson, who founded the network along with James Harris and Mauricio Umansky of The Agency.

“We have always had off-market activity. However, I think it is even greater right now,” says Meghan Bach with Colorado Landmark, Realtors in Boulder. Not only have they become more common, but there is greater acceptance among consumers. “People used to think they were Realtor-driven and that the listing agent was trying to double-end the sale. This is very much not the case today. It is seller-driven,” says Bach.

Ask agents about off-market practices and responses vary by location. In Palm Springs, Lucio Bernal with Coldwell Banker Residential Brokerage says, “We typically do not see off-market as being common in the valley. Privacy does not seem to be an apparent issue here.”

On the other hand, in Los Angeles’ platinum locales, Bob Hurwitz, founder and president of Hurwitz James Company, says, “Off market, a.k.a. pocket listings, have become so popular that the terms are basically oxymorons. It is frankly ludicrous.”

Technology also plays a role in this trend. “There have always been pocket listings, but it’s a little more evident now because of our electronic world and the fact that information is so immediate and widespread. The truth is if a house is of any substance, it generally doesn’t remain private,” says Joyce Rey, executive director, Coldwell Banker Global Luxury.

Lack of inventory is also boosting interest in private listings. Boulder has seen 10-plus percent appreciation year-over-year since 2013; demand still far exceeds inventory. “Good products fly off the shelf, so having a pocket that brokers chat about, and get under contract fairly hassle-free is ideal for sellers, particularly in the high end,” says Bach.

In Atlanta, Jaime Turner and Heather Armstrong with Engel & Völkers find, “The shortage of inventory is worrisome to both buyers and sellers. Sellers are hesitant to list and sell without an identified home to move to. By using an off-the-market strategy, sellers are able to command a price that gives them the comfort of selling while they look for a home to purchase. Buyers like it because they feel like they are getting ahead of the curve and are able to see a home that has limited showings. It has also been a good tool for us because when we have a seller that is concerned with finding a home, we utilize our agent connections and resources to locate the right home for our seller.”

For properties not in a luxury price bracket, off-market might not be the right route. “In the lower end, anything below $1.5 million in our market, coming to market creates a bidding war and advantageous sales prices for sellers. The higher end, $2.5 million and up, sells word of mouth and pretty close to where initially priced,” says Bach. Even for high-end properties, she says, “I do see huge value in coming to the market and being broadly online. That said, when there are privacy issues — divorce, job transitions, health issues — off market makes so much sense.”

Desire for privacy remains a major incentive for sellers. According to research from Luxury Portfolio International, privacy has never been more important to wealthy consumers who are also concerned about identity theft.

This desire has fueled an increase in requests from high-end sellers asking agents to privately market their homes. “Sellers actually demand it more than a Realtor suggests it to them,” explains Ryan. “They don’t want to be bothered with people just going through the house. They don’t want it to be a museum tour, so they instruct agents to be strategic and not make property information available to the public.”

Some contend not being available to the general market potentially enhances a home’s cachet. “A lot of buyers want something that they officially can’t have. Anyone that can essentially offer something that not everyone else can have, has a unique value in itself,” says James Harris. “The reality is the less you can tell people, the more exclusive it becomes, and the more people want it.”

But restricting information about a property to a limited audience is not without risk. “It’s a two-edged sword for sellers,” says Rey. “Is privacy worth getting less money for their home? If they do not get wide exposure, they may not be getting the best price.” “It also defies logic,” says Hurwitz. “The more qualified buyers who can find a property, the more likely a sale. If a property is not visible to agents with a qualified buyer, they aren’t going to know about it and will sell something else they can find.”

“I also hear a variety of opinions. Some sellers like the idea of avoiding showings, open houses, etc. (for privacy and convenience) if they can get a price they’re happy with without listing on the open market. The opposing argument tends to be that not offering it on the open market isn’t working in the best interest of the customer if there could be better terms/conditions in a wider pool of prospective buyers,” says Simms.

Even those who express concern about this approach recognize there are situations in which not being on public platforms is a strategic move. Hurwitz has used pocked listings on rare occasions for celebrity clients who wish to remain as anonymous as possible.

“Sometimes certain types of clients are not really comfortable having lots of people come see a property,” says agent Jennifer Ames with Coldwell Banker Residential Brokerage in Chicago. In instances like this, Ames says she will do a marketing campaign directly to agents who work in this price bracket. Invitation-only previews of big, exclusive properties are a traditional avenue to publicize properties.   

Luxury properties often take significantly longer to sell than those priced close to the median.
According to research from Concierge Auctions, average days on market for the highest-priced properties in top markets hovers around 522 days, ranging from 55 days in San Francisco to 1,062 in Nashville.

Once a home is listed on the MLS the clock begins ticking on the number of days on market. “The way the market works in the U.S., if you go on the market everything has to become public. Not just the price and the address, but the days on market. The longer a property is on the market, the more detrimental it becomes for the property,” explains Harris.

Being on the MLS opens the door to inclusion on public platforms including Zillow, Trulia and many others. Along with days on market, changes in photography, prices, and broker representation are all tracked. “We’ve started to realize more and more with the Internet, you want to have all your ducks in a row before going on the MLS,” says Ryan.

“Coming soon” has become an official category incorporated into a growing number of MLS systems. “We see a lot of Coming Soon strategy as opposed to off market in Florida,” says Simms. “I believe that the off-market approach is more appropriate for properties that are particularly expensive and/or unique, which would likely end up having a tremendous number of days on the market if listed traditionally.

Initially offering a property off market is considered an effective method to test a price. “If you are trying to get a very aggressive number for your house, you may want to start off market to test the price,” says Harris. Agents also use this strategy when an owner has a much higher price in mind than the market will likely accept.

“It’s a way to test the market without going on record,” says Ames. Another circumstance that could call for an interval of off-market strategy, she says, is a situation where owners don’t actually plan to move for months, but still want to give the property exposure.

In the pre-Internet era, agents relied on phone calls to agents who worked in similar price brackets. But, “you could only call so many people and network so much,” shares Ryan. Today, robust CRM systems give agents a laser focus on most-likely buyers. Additionally, national brands and affiliate groups promote networking among agents both nationally and internationally.

More formalized networks and platforms such as thepls.com are a way for agents to keep track of what’s available. For example, in Los Angeles, agents might receive hundreds of emails a week regarding off-market properties. “The PLS is essentially a place where agents can put information, so it can be searched when another agent needs it. That was really the motivation behind it,” says Dyson.

Tried and true methods to ensure those who work in luxury are aware of new listings, both off-market and publicly listed, remain the most important marketing tools, particularly for well connected agents.

Will the penchant for private listings continue if markets cool? While blockchain reduce reliance on the MLS? Both questions point to variables that could affect the off-market trend in the future.

The “Market Maker”

“Market maker” is the way Robert Dankner characterizes what he does. Dankner, president of Prime Manhattan Residential, takes off-market to the next level by finding and creating opportunities for buyers and sellers in tight markets in New York City. “There are a lot of people looking for the same thing that doesn’t exist, which is why they’re all creating things for themselves,” he says referring to the boom in renovations.

Dankner sees market potential others often overlook and is equally skilled at bringing clients —buyers and/or sellers — together, crafting a deal advantageous to both. “In my world, off-market is something that not everybody can do. In addition to obviously being extremely well connected, you have to have a memory like a computer because as things arise on both sides of the equation, you have to be able to mix and match very quickly to see what can be put together. It’s just a matter of having the resources and tools to know where and how to hunt. There’s no algorithm, no smoking gun. It’s just a matter of understanding every nook and cranny from the standpoint of things that used to be on the market or understanding through connections who, what, why and where somebody might be willing to part with something under the right conditions.”

Photos courtesy of iStockPhoto.com

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Bahamas international sporting club encompasses paradise

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Usually, getting to a destination is the most difficult part of a trip; at The Abaco Club, an international sporting club on Winding Bay in the Bahamas, the hard part is leaving.

“Welcome to Paradise” is how David Southworth, founder and CEO of Southworth Development, greets newcomers here. Even before you reach your residence, via a personal golf cart, you already feel the sense of being in paradise building.

The setting is relaxed with low slung buildings and iconic Bahamian architecture surrounded by lush vegetation. In the background, turquoise waters sparkle and flashes of rose red can be spied as Bahamian parrots streak through the trees.

No matter your vision of paradise — golf, tennis, boating, cave diving and snorkeling excursions or just relaxing on two miles of pristine beach — this club has it all. The golf course, consistently rated No. 1 in the Bahamas, is a true Scottish-style links course set hard by the sea with classic links features including pot bunkers and sloping greens. Pros such as PGA champion Darren Clarke often use the extensive practice facility to perfect their short game.

The club setting, which restricts the number of visits from non-members, adds to the overall laid-back ambiance. Real estate offerings include cottages, estate homes and cabanas. Two new condo buildings are planned. Also, in the works is a second members’ clubhouse and dedicated boat slips at Little Harbour.

Divers worldwide come to Abaco to explore the blue holes and potentially the most extensive island underground cave system in the world.

Our visit to the island included a winding trip through a pine forest with the Friends of the Environment to visit Dean’s Blue Hole, the second deepest in the world. Another day, we explored the cays and harbors around the Sea of Abaco, where we swam with turtles and met the swimming pigs of No Name Cay.

Along the Winding Bay beach, the club’s waterfront director has a range of water toys including kayaks, paddleboards and snorkels at the ready, and special events are planned every day.   

Whether in the open air at Flippers Beach Bar or taking in the panoramic views from the relaxed elegance of the Cliff House, dining often turns into a convivial experience. It’s no surprise that Flippers’ signature drink is the Island Smile. Fish tacos at Flippers and fresh lobster at the Cliff House are favorites.

The last night of our visit was ribs night, one of the special events at Flippers, with live Shake ‘n Scrape music and a surprise visit from the island’s Junkanoo troupe.

Regretfully, we had to leave the next morning, but we carried with us the last exuberant notes of that night. — Camilla McLaughlin

Photos courtesy of The Abacos Club; Left bottom photo courtesy of Home ©Aaron Usher III

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Tech Crunch

When technology experts compare the current pace of innovation behind the scenes in real estate to the Dot.com Boom of the late 1990s, it’s time to take notice.

By Camilla McLaughlin

Could another tech revolution for real estate be at hand? During the last tech surge, more than a few pundits speculated the agent would become increasingly irrelevant as technology took over most aspects of the job. Today, amid speculation about blockchain, artificial intelligence and other emerging technologies, whispers about the demise of the agent are once again surfacing. But experts say today’s next-gen tech will only make the role of the agent more relevant, particularly in high-value markets.

“Ultimately, relationships remain at the core of real estate, and today they are more important than ever,” observes Stephanie Anton, executive vice president of Luxury Portfolio International.

While attention in recent years has riveted on technology for the home, a wave of innovation with the potential to be even more transformative is on the cusp of altering everything from the way homes are marketed, to access to property data, to the execution of the sale. “We are at the tipping point of change

for real estate. Within three to five years, the entire property landscape will have shifted. Real estate search will be completely remastered, and the industry as a whole will not resemble what it is today,” says Joel Leslie, partner and CEO of Propify, a California startup that was developed in Australia.

The time frame for Leslie’s projection might be optimistic, but there is no doubt that the way properties are bought and sold will change in the not too distant future, perhaps even more dramatically than the mid-1990s when listings and property information became publicly available and searchable online. As a result, new brokerage models emerged; some remain, many do not — but the impact of technology on the way homes are bought and sold endures.

“Technology continues to transform the real estate industry, and particularly in the last few years as we have seen more and more true innovation introduced that can make agents’ lives more efficient, their tasks more automated and their time more effective,” says Stephanie Anton.

“An ever-complex sales process, record home values and elevated consumer expectations require agents to rely on a range of tools from contact management to virtual reality. “In the world we live in today, you truly have to be rigorous to keep up with the ‘latest and greatest,’” shares Anton.

Luxury sellers want “to see that an agent has the tools and wherewithal to expose their home to the buyer groups that have the most potential to purchase. They want to know that it’s being placed in the right places, where luxury buyers are looking. They also want to easily see the work that the agent is doing on their behalf,” says Tom Morgan, who heads up marketing for Gabriels Technology Solutions, a technology provider for luxury real estate brands. Productive agents rely on CRM or customer relationship management software to facilitate and streamline this process and provide detailed reports to clients.

Contacting an agent and discussing parameters of the home used to be the norm when someone decided to buy a home, says Bob Hurwitz, founder and CEO of Hurwitz James Company. Now, that initial contact usually happens after the buyer has done his or her own research on everything from available homes for sale to neighborhood statistics to online value approximations.

“The agent is still absolutely key though, as much of the information online, particularly ‘valuations’ from third-party aggregators, are ludicrous and inaccurate, based on incomplete or faulty data. Additionally, much sales data is not available as more and more listings are sold off market,” says Hurwitz.

Online searches, often on mobile devices, have upped requirements for how properties are presented online. “The days when a photographer would come in and shoot 20 photos are over. It is imperative that photography, VR [virtual reality] tours and video be absolutely of the highest level,” Hurwitz says. To take a unique property to the next level and make the property stand out, Hurwitz has hired an award-winning director to produce visuals.

Disruptive Technologies

When Matterport introduced 3-D technology to real estate imagery, it was a game changer. Once floorplans came off the page, it was possible to get a much better sense of the configuration of a property, and 3-D floorplans invite exploration. Now, pioneering newcomers are making 3-D technology less expensive and possibly applicable to a range of price points. “Apple investments suggest that soon, with the iPhone 11, you will be able to create such beautiful content using a camera in your pocket,” says Anton Yakubenko, co-founder and CEO of GeoCV.

GeoCV offers a high-quality 3-D immersive experience in both tours and floorplans. There is a “true sense of being with realistic depth and HDR [high-dynamic range] photo realistic quality,” explains Jonathan Klein, director of partnerships for GeoCV. “We differentiate ourselves by leveraging 3-D-enabled smartphones and taking an open approach to the data.” GeoCV’s floorplans and tours also include patios, porches and other outdoor connections, giving potential buyers a good idea of the indoor-outdoor synergy of a property.

“Technology continues to transform the real estate industry, and particularly in the last few years as we have seen more and more true innovation introduced that can make agents’ lives more efficient, their tasks more automated and their time more effective.” — Stephanie Anton of Luxury Portfolio International.

It’s A Virtual World

Virtual staging is not new. It was introduced in 2009, but the overall result was less than realistic. New technology means virtually staged spaces appear as real furnished rooms. “With dynamic 3-D augmented and virtual reality capability, buyers, sellers and real estate agents can eliminate visualization barriers using technology to showcase how a space will look fully furnished, but in a more scalable, convenient, cost-effective and personalized way than ever before,” says Pieter Aarts, CEO of RoOomy.

Virtual staging does more than act as a substitute for real furnishings. Some options allow viewers to change the position of a wall or windows. So, buyers can imagine how a property would look if, for example, the landscaping was changed or with a wall knocked out, explains Tim Rose, national sales manager for PlanOMatic, which offers virtual staging, interactive floor plans and 3-D walkthrough.

By collaborating with retailers of home furnishings, RoOomy gives potential owners a preview of what a room would look like with their choice of furniture. Using a design app on their site, buyers and homeowners can also try out various pieces of furniture or an entire scheme in a room, and the results are presented in 3-D. RoOomy also found a place on Architectural Digest’s list of the 20 best home design and decorating apps.

“Suddenly, virtual reality is making it possible for people to visualize a home before it’s built,” says Alexander Hovnanian, area president for K. Hovnanian at Port Imperial Urban Renewal VI, LLC. K. Hovnanian is innovating the way new construction is sold using virtual reality. Buyers tour Nine on the Hudson, a new project in West New York, New Jersey, while the 278-unit condo building is being constructed. Donning VR goggles they can walk the building and preview their future home as well as the views and patios and decks. Distant buyers use their iPad to link to an Opto tour using goggles supplied by K. Hovnanian. So far, the tours have resulted in more than 80 signed contacts from as far away as California.

What didn’t change dramatically during the tech revolution is the way property searches, which typically still require a specific location or geographic area as a delineator, are conducted. A few brands that cater to the affluent, such as Sotheby’s, allow a search by lifestyle, architecture or amenity without restrictions to a specific location.

Future searches for real estate potentially will bypass conventional portals and give access to an even larger number of properties — despite whether they are listed in the MLS — as blockchain technology becomes more widely adopted. Propify is a new social media search platform for real estate that employs blockchain technology. “The future of tech and real estate will make it easier to find the right property and Realtor and broker no matter where you are located. This will happen quickly and with confidence. There is no doubt that the traditional property search websites will not disappear overnight, but they will not be as aggressive as they once were,” says Leslie, who says the social media aspect of Propify has the most appeal for agents right now.

Blockchain and Distributed Ledger

Seemingly bursting on the scene in the last year, blockchain technology was originally developed as a platform for Bitcoin. But blockchain is applicable for many other uses, and is not to be confused with cryptocurrencies. “Blockchain technology is a digitized way to immutably record and share information. Blockchain-based smart contracts have the potential to transform real estate purchases, sales, leasing, financing and management,” says Marci Rossell, chief economist for LeadingRE and Luxury Portfolio. “Fortunately, the average person doesn’t have to grasp the technological details of how blockchain works; they just need to know what it can do for them.”

Some speculate that blockchain could be as transformative as the Internet was. Rossell compares the current climate to the Dot.com Boom of the late 1990s. “Blockchain is in the early stages of its commercial development and application. I expect that, over the next decade, it will be another Internet Wild West out there, with blockchain-related businesses emerging at a rapid rate. And just like the Dot.com Boom, a few will survive, thrive and transform their sectors — like Amazon. But there will also be many lost fortunes on the ideas that don’t work out,” she says.

Several blockchain platforms for real estate have been introduced, including Ubitquity and Propy.

Cryptocurrency Hubbub

Recently, Canter Companies, a San Diego brokerage, listed two properties offering the option of payment in cryptocurrency. Outlining the steps that had to be navigated, including banks and title companies, just to make this offering, CEO Andrew Canter says it was a detailed, but possible, process. Still, he cautions, “It’s early days. It’s something that is evolving every week.”

“Cryptocurrency is really a fascinating addition to the real estate industry,” says Hurwitz, who notes one of his agents just closed a $4.6 million transaction where the down payment was in Bitcoin. “It’s something that would have been unfathomable not too long ago,” he says. “What made it more challenging is that the buyer was actually obtaining a loan and it was necessary to find a sophisticated lender who understood the concept and was able to fund without a problem.”

The appeal of cryptocurrencies for global buyers should not be discounted since they potentially offer the ability to move currencies more securely and with fewer fees. Smart contracts and transactions via blockchain are expected to have appeal in countries where the sales process and property rights are not as secure as in the U.S.

Even though cryptocurrencies are not something most agents will encounter any time soon, major real estate brands and affiliate groups are keeping them on their radar. “Whether you’re skeptical of it or not, it is huge. We have thousands of new millionaires, and there are some new billionaires out there, purely off cryptocurrency. So, it’s something you’ve got to pay attention to,” says Danny Hertzberg with The Jills team at Coldwell Banker Residential Real Estate in Miami, who has briefed agents in his office on the topic. Even though people are marketing properties that say they are willing to accept cryptocurrencies, he says, most of those transactions actually close in dollars. “They’re doing an exchange, you know, prior to the deposit, and they’re exchanging Bitcoin for dollars and doing the same thing before the closing.”

Like Canter, Rossell believes it’s the early days and lots of changes are likely. “When a new technology of any kind emerges, multiple applications often compete for commercial dominance. Think Beta and VHS, or Facebook and MySpace. Real estate-related payment systems are likely to go through a similar process, where multiple systems compete until users coalesce around their preference. And don’t despair if you feel behind the curve on all things blockchain. While the topic burst on the scene late last year, it’s applications to real estate will unfold over many years.”

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Bountiful in Boca

The home featured on our cover was crafted with the intention to impress, and clearly this objective has been achieved. But first impressions only hint at the value and experience of this property.

Located at a point where a canal and the Intracoastal Waterway intersect, it occupies an unparalleled location with panoramic vistas, deep water and easy access to the Atlantic. Currently, it’s the only new construction on the Intracoastal point lot in Boca Raton, but what makes it undeniably one of Boca’s prime properties is exceptional forward-looking design that is perfectly executed by luxury developer Mary Widmer. It is at once elegant, but comfortable, combining traditional elements in a streamlined design that also showcases features such as vintage ironwork, intricate ceiling treatments and a 35-foot-tall entry rotunda.

“Even though it’s over 10,000 square feet, it is cozy. There is such a warm feeling; this house just makes you happy when you are there,” says listing agent Kathryn Gillespie of Illustrated Properties. A well-conceived floorplan means this property is ideal for a range of lifestyles and life stages, as both a full-time residence or resort oasis.

Almost all the rooms look out to the water and to the lush green ribbon, including a mangrove preserve that lines the opposite shore. Extensive amenities include a media room, huge lower-level club room, office and a wine station. From either of the two 50-foot docks — both have electricity and water — it’s only minutes to the Atlantic via the Boca or the Hillsboro inlet. Boca’s private airport is also only 10 minutes away.

It’s hard not to fall in love with this property, which even has a little sandy beach with a fire pit. And being on the Intracoastal and still able to put your toes in the sand might be one of its most impressive features. The $11.5 million list price includes the furnishings. — Camilla McLaughlin

Photos courtesy of Kathryn Gillespie

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18 Markets to Watch in 2018

Inventories, demand, new construction, urban renewal, untapped potential and changing business opportunities. All of this and much more vary greatly from region to region, market to market, and submarket to submarket. We took it all into account as we determined which 18 places most warrant keeping an eye on in 2018.

By Camilla McLaughlin

Atlanta, Georgia — Midtown is on fire, the result of extensive redevelopment, and local experts believe downtown will become equally vital. Buckhead is still a locus for the high end, but new upscale buildings bring luxury to revitalized city neighborhoods. Look for more upscale communities in the suburbs as well.

Austin, Texas — Along with Atlanta, Austin is setting the pace for a new age for cities in the south. Technology, pharmaceutical and biotech industries coupled with a unique lifestyle bring newcomers. Not to be discounted is Texas’ status as a no-income-tax state. Californians will continue to look favorably on this city.

Boston, Massachusetts — New

ultra-luxury buildings have buffed Boston’s luxury patina. And the redevelopment of neighborhoods is creating more upscale addresses. Prices in the greater Boston area reached a new high in October with a $568,000 median. A steady influx of foreign investors and slightly more balanced inventory are expected to drive the market into 2018. 

Charleston, South Carolina — This city’s ascendancy to the luxury elite is undeniable. Christie’s ranks Charleston fifth, ahead of Paris and Sydney, on its Luxury Thermometer, based on demand and growth. Antebellum classics in historic sections still captivate, but enclaves outside the city or on the water also capture attention. Food, authenticity and waterfront — is there a more compelling combo?

Charlotte, North Carolina — Forecast to be a top housing market in 2018, Charlotte offers urban perks with renewed neighborhoods, new towers and major sports teams without the big-city hassle. Investors, developers, retirees and millennials are all taking notice. An international airport and a temperate climate place this city in the major league.

Darien, Connecticut — Experts anticipate interest in suburban towns with easy access to major metros to grow this year, and Darien is a good example. Homes that are priced right and close to the water sell quickly. Recent ultra sales in nearby Greenwich bring more high-end focus to Connecticut suburbs.

Las Vegas, Nevada — Not too

long ago, some predicted that it would take decades, if ever, for Las Vegas to bounce back from the recession. Today, it tops Realtor.com’s list of the best housing markets for 2018.  While a few segments still play catch up, luxury in Las Vegas is back full force with new ultra-lux properties in a range of prices. Architecturally, many are innovative showstoppers.  

Maui, Hawaii — More visitors return to Maui than any other Hawaiian island. The number of private jets on the tarmac at Kahului Airport, condominiums asking $25 million and a recent $40 million home sale attest to Maui’s luxury charisma. Montage Residences Kapalua Bay with $54 million in sales in 2017 set the bar for resort residences.

“We have seen value increase, but what we have seen of significance is the number of luxury home sales in our marketplace has really grown year over year, each of the past three years,” says broker Peggy Hoag.

Minneapolis/St. Paul, Minnesota — More than Super Bowl LII adds to hubbub in downtown Minneapolis. The boom includes a new 120-block downtown neighborhood anchored by a new stadium, home to the Vikings, and a five-block Wells Fargo mixed-use complex. Offering a higher quality of life at an affordable price, Minneapolis tops Urban Land’s outlook for the Midwest.

Nashville, Tennessee — Once considered a second-tier city, this music hub is now a real estate superstar. Nashville was one of eight metros showing inventory gains in October. Buyers responded, making days on market in November among the

lowest in the country. Nashville appears on several markets to watch this year, making it more than a good bet for 2018.

New York City’s Northern New Jersey suburbs — Developers are eyeing submarkets adjacent to major metros, and towns in Northern New Jersey are in their sights. Already, the region is home to some of the priciest ZIP codes in the country. Manhattan is less than 30 minutes away, and estates here greatly appeal to celebrities thanks to lifestyle and privacy.

Newport Beach, California — Slim inventories make tear downs prized properties here. Developers look for properties to tear down and build new product that appeals to high-end clients who can come in and customize. RE/MAX broker Jeff Grice said more agents are

working with these builders, and his brokerage recently listed a property in the process of being rebuilt for $8.8 million that sold within 11 days. “I foresee this getting bigger and bigger in 2018,” he says.

Orlando, Florida — Florida attracts more international buyers than any other U.S. state and more than Mickey Mouse makes this city a top destination for global buyers in Florida. New luxury enclaves are being developed including more properties in Lake Nona by noted architects.

Philadelphia, Pennsylvania — Inventory is the story here, but one of more rather than less inventory as new luxury rentals and residences come online in Center City. For single-family residences, demand still exceeds supply. Slow and steady

describes a continued influx of newcomers to the city, the second greatest among U.S. secondary markets.

Portland, Oregon — A slim inventory has pushed prices up by almost 10 percent, but low housing prices compared to Vancouver and San Francisco bring newcomers, as does a growing tech presence. Luxury here is on a steady growth path. “We have seen value increase, but what we have seen of significance is the number of luxury home sales in our marketplace has really grown year over year, each of the past three years,” says local broker Peggy Hoag.

San Diego, California — Luxury is not new here, but the cachet of this Pacific star continues to expand. There is no better testimony than the inclusion of San Diego on Christie’s list of

the top 10 fastest growing luxury markets. Luxury has expanded downtown with artful new towers and large-scale developments include North Embarcadero Esplanade.

San Jose, California — The heart of Silicon Valley led the country in price growth with a year-over-year price increase of 19.2 percent in October with 76.3 percent of homes selling above list price. But don’t expect any cooling here until inventory pressures are relieved with more homes in the market.

Seattle, Washington — It’s no surprise Seattle leads ULI’s list of markets to watch. At year end, the typical home was snapped up in just 10 days, making it the fastest market in the country. Upscale properties are in demand thanks to international interest and home-grown tech wealth.

Photo courtesy of iStockphoto.com

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Unique Homes Cover Showcase: The Abaco Club on Winding Bay

Dreams of a tropical sanctuary are realized in the home featured on our cover — a beachfront estate at The Abaco Club, a 500-acre private enclave in the Bahamas.

By Camilla McLaughlin

For more information, visit TheAbacoClub.com

Surrounded by more than one-and-a-half acres of palm trees, gardens and tropical foliage, the property is an oasis of privacy, but still a short walk or golf cart ride to everything The Abaco Club offers.

The architecture, a superbly articulated blend of transitional and contemporary styles with a Bahamian flavor, is uniquely suited to the setting. A stately entry with double mahogany doors and a coral stone staircase sets the stage; inside, a spacious vaulted great room transitions to a large dining space and a beautifully outfitted kitchen. The overall feeling invites relaxation, while a sense of understated elegance elevates the experience throughout the home.

Dynamic views of the turquoise waters of Winding Bay and miles of pristine white sandy beach form a backdrop in every room. Disappearing glass walls extend the living to a lanai and covered deck with outdoor dining organized around a spectacular pool. In the master suite, double French doors open to a very private outdoor shower surrounded by mahogany and coral stone walls. The ground level is devoted to ways to play with pool tables, a media room, guest suites and a workout room.

Few, if any, properties in the Bahamas match this singular combination of architecture, privacy, indulgent features and exquisite finishes paired with the services and amenities of an international sporting club.

“The Abaco Club is a desitnation where you can come and do nothing, or you can fill your day with biking, scuba diving, fishing and golf on what is considered the best course in the Bahamas,” shares Kristi Hull, director of sales for The Abaco Club, who is listing the home for $8.750 million. Best of all, limited access and an intimate club setting ensures that whenever you visit you feel like you are coming home.

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Outlook 2018: Back to a Slow Simmer

Inventories, consumer confidence, growing worldwide wealth, the stock market, tax changes and local dynamics are affecting how hot each luxury real estate market is throughout the U.S.

By Camilla McLaughlin

“Fasten your seatbelt, 2018 will be a fun and scary, but prosperous ride,” is how Brad Inman, founder of Inman News, assesses the outlook for real estate this year. On the other hand, developers and planners tapped by the Urban Land Institute (ULI) call for “a long glide path to a soft landing” for the economy and the real estate sector. They expect the current cycle to extend into 2018 and even beyond.

These comments perfectly illustrate the divergent opinions on the outlook for real estate this year, especially luxury real estate.

For real estate overall, it’s not an overstatement to say 2017 was a very good year. The National Association of Realtors (NAR) expects sales of existing homes in 2017 to tally at 5.81 million transactions, the best number since 2006, and 3.8 percent higher than 2016. Home prices grew by almost 6 percent, a pace NAR expects to be duplicated in 2018. Looking ahead, the forecast calls for an increase of 3.7 percent in the number of sales as more new construction amps up the number of homes on the market. December sales soared 5.6 percent, with most activity at the upper end of the market fueled by move-up buyers with considerable down payments, cash buyers and easing of inventory shortages.

For luxury real estate, the narrative, while positive, revolves around locations and price brackets, depicting a market beginning to settle into a sustainable pace after a protracted recovery. “Bottom line, we’re going to have a strong year,” says Philip White, president and CEO of Sotheby’s International Realty Affiliates. “The one difference this year is the up-wind market is having a better 17 versus 16. We are going to have more transactions and a higher average sales price this year than last year.” 

In cities such as Seattle, San Francisco or Denver, demand for upscale properties outpaces supply. “Chicago now has 60 cranes in the air which has only happened twice in my 25 years here,” says Craig Hogan, vice president of luxury at Coldwell Banker Real Estate.

New York City is often portrayed as being in the doldrums. Although there has been a slow down in the ultra high end, other price points and neighborhoods all over the city are far from flat. Most active, according to Ellie Johnson, president at Berkshire Hathaway HomeServices New York Properties, is the $1 million to $5 million range, where multiple offers are not uncommon. From Dec. 11 through the 17, 18 properties went under contract above $4 million, which she says is a much larger number than the same period a year ago. When New Yorkers confront change, they often put buying plans on hold. Johnson says the upper price brackets are in a “strong hold pattern” right now, but she expects it to be short lived. Also, Wall Street bonuses should translate into “a very nice first quarter.”

“I already see a softening in the luxury home market with a growing inventory and properties on the very high end sitting on the market. An excess of new construction, with major homes that have been enthusiastically designed and under construction when the market was hotter, are now coming on to the scene in a different paradigm.”

— Bob Hurwitz, founder and CEO of
The Hurwitz James Company

 image courtesy istockphoto.com / Meinzahn

Traditional luxury markets in New York, California and Florida are still strong, but brokers also see big plays in smaller markets. Lesli Akers, president of Keller Williams Luxury Homes International, illustrates with a recent $22 million transaction in Austin, “the biggest sale in the history of that market.”  ULI forecasts a shift in interest and investment dollars to smaller metros such as Seattle, Austin and even Salt Lake City as well as close-in suburbs of New York and Washington, D.C. In New York, Diane Ramirez, chairman and CEO of Halstead, says new buildings, both residential and rental, with views of the Hudson River, extensive amenities and a short commute to the city are generating interest from younger consumers in White Plains, New Rochelle and Tarrytown.

“Luxury is starting to move into every market. As neighborhoods change, the buyers change,” says Diane Hartley, president of the Institute for Luxury Home Marketing, noting it’s important for agents to understand this new buyer, new price points and new expectations.

For agents, “it’s no longer enough just to be a local expert, they have to have global knowledge as well. Most of the affluent are looking to see what is happening in the global market. But it’s also who agents are bringing to look at the home,” says Anne Miller, director of business alliances for RE/MAX.

At LuxuryRealEstate.com’s fall conference, comments about local markets were all positive, something Publisher John Brian Losh says usually doesn’t happen. “Prices are directly related to the economy and consumer confidence, and right now consumer confidence is high,” he says.

More than consumer confidence is bolstering luxury sales. Adding to demand are the growth of wealth in the U.S. and worldwide, a surge in the stock market, and a rise in foreign buying of U.S. properties. There are few, if any, indications this will change in the immediate future. Paul Boomsma, president of Luxury Portfolio International, explains: “Our white paper and our global survey show a lot of interest from buyers, not only for this year but over the next two years. There is more interest on the buy side than the sell side, and that is consistent among the high end, and it extends to 17 different countries. There is a lot of interest and not just in U.S. properties.” 

Purchases of U.S. properties from foreign buyers surged from $102 billion to $153 billion in the year ending March 2017, accounting for 10 percent of dollar volume of sales. “Foreign buyers generally see the U.S. as a safe haven for investment,” says Bob Hurwitz, founder and CEO of The Hurwitz James Company, whose current clients include mega affluent buyers from Turkey, Singapore, China and Ukraine looking buy in price ranges of $20 million and up. “In a couple of cases this includes multiple properties, including commercial and development not exclusive to California,” he adds.

While most markets sizzle, the high end in some locations and price brackets is back to a slow simmer. “I already see a softening in the luxury home market with a growing inventory and properties on the very high end sitting on the market. An excess of new construction, with major homes that have been enthusiastically designed and under construction when the market was hotter, are now coming on to the scene in a different paradigm,” says Hurwitz. “Prices have already adjusted, and as developers and luxury home builders start having homes sit on the market, there will be opportunities to make good buys.”

“In the ultra high end, I think prices are being adjusted to the economy,” says Losh, noting a common issue with ultra properties. Often sellers price the home at the highest price they ever imaged. After a couple of years, they get realistic. “What really determines value is what it cost to replace a property,” he says.

The ultra high end may be cooling, but, Hogan says, the luxury market is healthy. “The $1-to-3 million, $3-to-5 million and $5-to-9.9 million sectors are strong. Not in every city but as a whole, based on our year-to-date numbers. I honestly feel that we are simply normalizing.”

“We are seeing some moderating trends in the luxury space,” says Akers. Downward price adjustments and longer days on market are signs that luxury is moving toward a more balanced market. Still, she adds, “Truly unique properties still command top dollar and cash offers.”

It would seem that the performance of the stock market might discourage real estate investment. Instead, Marci Rossell, chief economist for Leading Real Estate Companies of the World, says it has an opposite effect. “For the luxury buyer, real estate is part of a larger portfolio and portfolios have swelled in terms of stock market value over the last two years. So, from the perspective of balancing a portfolio, real estate can look attractive.” The most influential trend for 2018, particularly the high end, is new consumer attitudes. “Across all price points, the word value is critical today,” says Ramirez. “Value to a $1 million buyer and a $600,000 buyer is not the same, but both want the perception of value.”

Consumers have become even more demanding. “There is a desire for perfection. They want a property or an experience to be exactly what they want it to be. There is no desire for compromise,” says Hartley.

Price matters, but it’s not the only factor in the value equation. “If it’s been on the market awhile, bringing down the price is not going to do it. You have to see what’s selling,” says Ramirez, using the example of a $7 million property in Darien that sold in a single day. It was well priced and located across from the water. Water views continue to be in highest demand.

People want new. “If it’s an older home, it must be newly renovated,” says Ramirez. “People feel they don’t have the time for a renovation and they are unsure of the cost.”

The bottom line for sellers, according to Miller, is to listen to their agent. “We’re hoping that everybody takes a reality check on location, quality — is it unique and rare, does it have all the luxury amenities? — before they list their home.”   

People want new.

“If it’s an older home, it must be newly renovated,” says Diane Ramirez, chairman and CEO of Halstead. “People feel they don’t have the time for a renovation and they are unsure of the cost.”

Image courtesy istockphoto.com / TobiasBischof

Also, says Kevin Thompson, chief marketing officer at Sotheby’s International, “There is a search for the unique.” This new consumer isn’t interested in cookie-cutter anything. “They want something personal and outside the norm, and they are willing to pay for that.”

Looking ahead, Hogan sees new construction, contemporary/modern, a smaller footprint and full connectivity shaping future demand.

“We’re seeing more and more of what I call the ‘Tesla consumer with the Apple watch’ — a client who’s passionate about their lifestyle and their environmental foot print. They want to do what’s right for the earth, and they don’t mind people knowing it’s expensive,” shares Akers.

Recent ultra-high-end sales in Greenwich and Manhattan are evidence that buyers are out, according to appraiser Jonathan Miller, who noted in a recent blog: “Buyers remain in the market, but the price needs to reflect 2017.”

Akers says sellers should prepare to sell at fair market value. “We’re not in a ‘dip your toe in the market and test it out’ kind of market.”

The number of homes available for sale continues to be the fulcrum on which markets balance. Regarding real estate overall, Lawrence Yun, NAR’s chief economist says: “Home prices, after multiple years of fast growth, still show no signs of cooling because of the ongoing housing shortage in much of the country. The latest Case-Shiller price growth of 6.2 percent on a nationwide basis marks the strongest rise in over three years.”

High-priced markets are not immune to inventory challenges, but it’s not in every location. Instead, it is likely to be places that have had strong buying for years and strong population growth. White uses the example of San Francisco, where anything that is priced right is snapped up. Inventory constraints, according to White, are not unique to the U.S. “In Hong Kong and Japan, there are stories where people are lined up to buy high-priced units in new buildings, even to the point where they will sell their place in line.”

This year, for the first time since the downturn, inventories eased ever so slightly, and forecasts point to more new construction in the next few years. Javier Vivas, director of economic research for Realtor.com, sees 2018 as “a significant inflection point in the housing shortage, with increases in inventory felt initially in the mid- to higher-price points above $350,000.” Vivas says Boston, Detroit, Kansas City, Nashville and Philadelphia are predicted to see inventory recovery first.

As inventories grow, sellers need to understand that homes that are dated or not priced accurately will fall to the bottom of prospective buyers’ list of target properties.

At year-end, tax changes and continued political uncertainty loomed over every forecast. “For buyers worldwide, I think policy changes will matter more than economic climate. This is a year when tax policy could drive some location decisions. If you are a first-time buyer in a high-tax area and you are looking to put down roots, you will think long and hard about the tax consequences of a location. Even on the European front, we know Brexit will affect location decisions. Already we are seeing relocations out of London to Frankfurt,” shares Rossell. “The homebuying decision is part of a large mosaic, and the tax implication of that decision used to be a smaller tile, and it will become a larger tile.

Looking ahead: “The economy and housing market will grow like crazy. Job creation is at record levels; unemployment is at a 17-year low, wages are feeling upward pressure and companies are investing at a fast and furious pace,” commented Inman. “A backdrop of political uncertainty will not slow down the global economic thoroughbred that is galloping at a full run. Left in the dust will be housing affordability in many major metros.”

THIS STORY WAS FEATURED IN OUR WINTER 2018 ISSUE.

CLICK HERE FOR THE FULL DIGITAL VERSION.

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What Now? Series: The South Real Estate Market Report

In 2017, Unique Homes is traveling the U.S. to find the dominant stories in each region of the country — This issue covers the South.

By Camilla McLaughlin

Courtesy Arquitectonica

Not too long ago, the siren call of the South was fun in the sun. Miles of coastline might translate into some of the most desirable second home and resort locations in the county, but more than fun in the sun is creating vibrant real estate markets. Instead, catalysts are strong fundamentals, new job opportunities and investments in infrastructure. Cities are reorganizing, and a number, such as Atlanta, Nashville and Charleston, have risen to new prominence, nationally. Fledgling tech hubs are being incubated, and no matter where you look, new neighborhoods and master-planned communities are on the rise.

Ten years ago, a few prognosticators speculated it could possibly take more than a decade, if ever, for Florida properties to recover from the recession. Today, real estate is thriving in cities across the South from Florida to Texas. Coming out of the recession, Dallas, Houston and Austin set the pace with some of the country’s best real estate markets. Atlanta, Austin, Dallas, Nashville, Raleigh/Durham and Charlotte all number in Urban Land Institute’s top 10 markets to watch and are believed to have excellent overall prospects for real estate in 2017.

Florida

Boom times may not quite be back, but Florida markets have racked up an impressive record in recent years. July marked the 68th month of increases in median prices statewide with single-family prices up 7.1 percent and condo and townhouse prices up 6.8 percent. Florida’s economy is expected to grow faster than the national economy with the gross state product reaching $1.074 trillion by 2019, according to a forecast from the Institute for Competitiveness at the University of Central Florida. Based on current rankings by the World Bank, that number today would make Florida’s economy the 16th largest in the world.

Seven of the top 10 fastest growing cities in the U.S. are in the Sunshine State. Orlando is booming, ranking at the top of Forbes cities with the highest projected job growth, boosted by a growing technology sector as well as innovative strategies such as Creative Village, which integrates education and high tech in a single setting. It also will be one of the largest transit-oriented developments in central Florida.

Orlando recently placed second in the nation for single-family home sales. “It is definitely Orlando’s time, and it’s a confluence of many different factors,” observes Jessi Blakley, director of communications and public relations for Tavistock Development Company, the developer of Lake Nona, one of the fastest growing communities in the U.S.

New projects in the pipeline for Lake Nona include a $400 million training and innovation center for KPMG and an Amazon high-tech fulfillment center. Also on the drawing board is a mixed-use luxury development that includes an 11-acre Crystal Lagoon, dynamic town center, art installations and a hotel designed by Miami’s Arquitectonica. The location adjacent to Lake Nona’s Medical City, a 650-acre health and life science park comprised of several hospitals, academic institutions and bioscience facilities, underscores a growing emphasis on wellness. “We consider ourselves to be a living lab, so you are going to see innovation across the entire community. And that’s going to be everything from our healthy homes to a partnership with Delos,” says Blakley.

Nowhere is the luxury story quite like that of Miami’s, where a legion of international starchitects have remade the skyline with visionary new towers, including residential projects from luxury brands such as Porsche Design, Armani and Fendi. Condo construction is now a multi-billion-dollar industry. Since 2011, 86 new towers, and 8,749 units have been completed east of I-95 in Miami Dade County.

Mega projects including the Brickell Center, Miami Worldcenter, and City Place Doral are reviving sections of the city and enhancing Miami’s status as a retail hub for the Americas.

This year, Miami’s ultra market moved from sizzle to simmer. “The year of the buyer” is how Ben Brissi, an agent with EWM Realty International in Miami, characterizes 2017. “With the third quarter underway, we are still seeing a high supply of inventory, which provides great opportunities for buyers,” he says.

Sellers are taking notice. They are “becoming more realistic with pricing, especially at the top of the market,” shares Coral Gables Realtor and Chair of the Miami Association of Realtors Christopher Zoller. New construction is excluded from Miami Realtor data, but sales of existing luxury condos surged in July, and overall single-family home prices have increased for 68 consecutive months. Prices for sales of existing condos have increased for 71 of the last 74 months.

Although “the season” still holds sway in enclaves like Palm Beach, Manalapan, Miami Beach and Naples, many brokers see fundamental shifts underway. Summer is usually quiet, but this year Florida Realtors say they have been busy. “There was a definite pickup this summer. From a purchase standpoint, I am seeing a shift from a seasonal to year-round. People look in the early season, but they come back in the summer to buy,” says Tade Bua-Bell, a broker associate at John R. Wood Properties in Naples. “More people are lengthening their stay, often to eight months. We’re also finding lots of kids coming in the summer.”

Courtesy The Fite Group Luxury Homes ERA Powered and ©edzakphoto.com

“The season is elongating. Now it’s starting out in October, and many are not leaving until late spring or early June. It is much busier in the summer,” says David Fite, principal of The Fite Group Luxury Homes ERA Powered in Palm Beach. 

“We really don’t have a season anymore,” says Brenda Donnelly, a Luxury Collection specialist with Berkshire Hathaway HomeServices Knight & Gardner Realty in Key West. “Every month we have a festival of some sort; we are really a year-round vacation resort.” Donnelly, who also owns Historic Key West Vacation Rentals, says the market is booming, with a limited inventory and so many renovations that it can take six to eight months to get a builder. The potential for long-term rentals, here and in other resort settings, is becoming an added incentive to purchase.

Bua-Bell says, “We had a lot of big sales this summer over $10 million. People are purchasing a little more.” The reason, she says, is simple: “People just want to live their lives. People aren’t just buying real estate, they are buying lifestyle. There are only so many warm places where people can go.”

Another shift in the Sunshine State is toward year-round communities. “Our impression is there are many people now moving to Palm Beach County full time, who 10 to 15 years ago would have been snowbirds,” says Fite. More than $2 billion in development and 1,000 residential units downtown are expected to come online in West Palm Beach.

Most Expensive Listings

Palm Beach area: $195 million compound in Manalapan.
Miami: $150 million for 4 waterfront lots on exclusive Indian Creek Island; a $65 million estate on Star Island is available for the first time in 30 years.
Orlando: $7.588 million in Golden Oak at Walt Disney World Resort, with access to the Four Seasons Resort Orlando.
Naples: $65 million estate on 4.08 beachfront acres.
Also notable: $26.5 million estate on Longboat Key. 

Design Miami

“Right now, the condo market in Miami has really taken a swing; it is much more modern. Lobbies are sparser,” with many more amenities, says Kevin Gray, owner of Kevin Gray Design. Hotel services are popular although Gray finds clients often see that as an invasion of privacy.   

“Architecture is becoming cleaner,” he observes. The preference for kitchens is white lacquer cabinets that open upwards. Additionally, in both New York and Miami, homeowners want ecofriendly materials. “For a while everyone loved the white marble floors or terra cotta. Today, people are doing composite materials, and you can hardly tell the difference,” says Gray.

Lighting has become important in the upscale market, and instead of the fixture the focus is on the lighting itself. “People are more aware of the quality of the lighting and of good lights, he says, pointing to new LEDs. Also “taking off like wildfire” are square recessed lights. “No one wants round anymore,” he says. On the horizon, look for more casings lined with black instead of white. 

Courtesy The Fite Group Luxury Homes ERA Powered

Georgia 

The story here is population growth as existing companies add new jobs and the promise of top talent from Georgia Tech and Emory University lure new enterprises to the area. Recently, Atlanta was celebrated as the top city for making movies, and the film business adds to both state coffers and the city’s luxury cachet.

An old nickname for Atlanta was “The City of Love,” and newcomers here are finding a lot more to love thanks to infrastructure enhancements and an urban revitalization that promises to roll from midtown to downtown. Buckhead remains the city’s prime luxury enclave, but many other areas are acquiring a luxury persona. “Midtown is on fire,” says Christa Huffstickler, owner of Engel & Völkers Atlanta, pointing to new luxury towers, sidewalk cafes and restaurants, even a food and wine festive. “Finally, it feels like a real city. We are going to see a shift, and, in the next 10 to 15 years, downtown will be as vibrant as midtown is now.”

Another big transformation is the development of the Beltline, which is similar to New York’s High Line. Even though only several miles are complete, residents can already see how it will change the city. “We are seeing developers gravitating to the Beltline. It’s going to become as important of a draw for consumers as Buckhead. And our city has been starving for that connectivity.”

Atlanta has been a city of suburbs and those markets are still in demand, but new condo offerings beckon people back to town. “When our real estate cycle came back, we saw a shift in the condo market and a transition in what that product offered. There was more thoughtful design, smaller boutique-sized buildings, and more square footage. Rather than first-time buyers, they were oriented toward a move-up market as well as downsizers.”

Most expensive listing in Atlanta: $15.8 million Mediterranean estate in Buckhead.

South Carolina   

Stop in any small-town coffee shop along coastal South Carolina, and there is a good chance you will encounter newcomers meeting with real estate agents, and there is no better testimony to vibrancy of real estate in coastal resort locales as well as farther inland. Home values in South Carolina increased by 5.5 percent over the last year, and predictions call for an additional 3.5-percent rise next year. New resort developments such as Palmetto Bluff and classics like Hilton Head bring vacation buyers and full-time residents. Master-planned communities are in the works statewide, but the biggest news for upscale real estate has got to be how much Charleston’s star has risen in the luxury firmament.

Charleston has always been a top southern destination, but the city’s ascendancy to the luxury elite this year is undeniable. From Top Chef to Travel + Leisure, it seems to be on everyone’s list of top markets, including Unique Homes’ annual “Markets to Watch.” Christie’s ranks Charleston fifth, ahead of Paris; Portland, Oregon; and Sydney on its Luxury Thermometer, a gauge based on demand and growth. Austin and San Francisco outpaced Charleston at fourth and third.

“Charleston has always stayed ahead of most areas just because of how desirable it is. When other areas are depressed, Charleston comes along at a decent pace, because of the draw of history, beaches and the overall charm of the Lowcountry,” says Michael Robert Smith with Berkshire Hathaway HomeServices Carolina Sun Real Estate. Lower taxes are another incentive for businesses to relocate here, and a growing tech section is bringing more millennials to the area. From antique residences along The Battery to oceanfront at Kiawah Island, the range of luxury housing here is amazing.

There is a lot of new construction, particularly away from the water. But the big news for some perspective residents, according to Smith, is “the Low Country is still affordable. West of Charleston you might be able to get a mansion for $500,000.”

Charlotte, North Carolina

Although Raleigh-Durham has been the epicenter for growth in the Carolinas, the push now is to revitalize uptown Charlotte with new cultural venues, educational institutions, parks, walkable streets, new housing, and retail.

The light rail added in 2007 led to a boom of apartments and retail in the South End that is expected to be replicated in NoDa and the University area as the rail expands north of Uptown. Charlotte also aligns with a national trend in developing cities, in which luxury rentals are offering a huge range of amenities, pet perks and a high level of design within individual units.

Also included in the remake of city center Charlotte are a number of parks, including Romare Beardon Park, adjacent to a new minor league baseball park and the Carolina Panthers football stadium. Jump starting the refurbishment of nearby Stonewall Street is Crescent Communities’ new mixed-use development, Stonewall Station. Plans call for two hotels, a Whole Foods Market and upscale apartments.

Most expensive listing in Charlotte: $6.3 million set on 20 acres in South Charlotte.

Cinnamon Shore, Texas

New resorts are a rarity these days, but a well-established vacation community for Texans along the gulf holds the promise of rivaling those in Florida and the Carolinas. Located on Port Aransas and Mustang Island, an 18-mile island near Corpus Christi, Cinnamon Shore is slated for a $1.3 billion, two-phase expansion, which in the next decade will include new two-to-five-bedroom vacation homes, an upscale boutique hotel and a 10-acre lake ringed by a mile-long boardwalk.

Plans call for approximately 3,300 of beachfront, triple the size of the current beach at Cinnamon Shore, as well as a town center with retail, dining and entertainment. Organized around the concept of New Urbanism, the community will be the kind of place where front porches energize connections and kids can be kids.

Courtesy of Toll Brothers

New Home Designs in Texas

For Texas homeowners, particularly downsizers, collected interiors that include items with a personal meaning or story are important. “We do see a yearning from people wanting that authenticity,” says Kate Brennan, director of accounts at Mary Cook Associates, a Chicago architecture and design firm that works with homebuilders nationally. For empty nesters, it might be something acquired on a trip or a collection. “It is often something that has a story that relates to them,” says Brennan. In the Lone Star State, rustic elements are also desired, but, Brennan adds, with clean lines so the end result is “sophisticated and collected.” The indoor-outdoor connection is important in Texas and it continues to be refined. Look for more seamless applications of finishes to connect the two spaces.

Both downsizers and Millennials like single-level floor plans. “People downsizing are looking for a place that will promote health and wellness,” she says. Boomers are looking ahead and they want homes that will support future transitions. Millennials also like single-level floor plans because they are easy to maintain. But they want flexible open plans that can be adapted to their individual lifestyle.

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The Modern Amenity — Contemporary Architecture

Increasingly, real estate developers are placing value on contemporary architecture.

By Camilla McLaughlin

For years, innovative designs from starchitects have been the focus for new buildings in New York and Miami. Now, developers of single family communities are employing the same approach with developments and communities organized around a single architectural style. In some instances, notable architects are also on board to create a statement as bold as those broadcast by dramatic urban towers. In others, the architectural vision builds on research into consumer priorities. In every instance, the architecture is taking prominence.

In Nevada, the premise for a new ultra luxury development, Ascaya, is a specific architectural style, in this instance contemporary and specifically Desert Contemporary. It’s a vernacular characteristic of the Southwest and especially fitting for a project located in the foothills above Henderson, nine miles south of Las Vegas. Six notable architects have been commissioned to bring unique expressions of desert contemporary architecture to fruition. The designs are visionary, offering varied takes on the aesthetic combined with innovative construction, energy-efficient features and floor plans that align with lifestyle aspirations. Two inspiration homes are finished, three are under construction and a design from Pritzker winner Richard Meir & Partners is nearing completion.

A new community in Palm Springs, Linea, takes a cue from the area’s legendary modernist ties, offering fresh interpretations of the iconic style. Residences here appear as works of art rather than manifestations of an architectural style. For this project, developer Andrew Adler and architect Anthony Poon drew inspiration from abstract sculptures and Bauhaus painters. Homes rise as white cubist forms against the craggy backdrop of surrounding mountains. Stark white facades punctuated with soft hued doors, sculpted massing and a linear composition offer a fresh new take that pushes the modern aesthetic to a new level of expression.

Located on a terraced hillside setting in Henderson, Nevada is Axis, a new community developed by Pardee Homes, a member of the Tri Pointe Group, offering designs with elevations that are as much contemporary as they are transitional with modern floor plans. The architecture is forward-looking. The homes in Axis also integrate outdoor courtyards, balconies and rooftop decks in ways that transcend typical limitation of indoors versus outdoors. Strada, another new community, is geared toward millennials with its own individual architectural expression that grew out of consumer research of this demographic. 

Ten years ago, it was difficult to build a contemporary home, except for Modern Tuscan, in Las Vegas unless it was on an individual lot outside of a development. The Ridges was the first to allow contemporary architecture and another recent development, The Summit in Summerlin, also leans toward contemporary.

“There is definitely a move in the direction of contemporary, and it’s started to come down to the higher-end, semi-custom tract homes. That’s had a big push. It hasn’t really come down to the starter home, yet. That’s the next wave,” says Eric Strain, CEO of Assemblage Studio and an architecture professor at the University of Nevada, Las Vegas.

For the first inspiration home at Ascaya, completed this spring, SB Architects drew on its experience with resort and hospitality properties and approached the home as a smaller scale resort. “We see a lot of crossover with private estates wanting more resort amenities, and hotels yearning to feel more intimate,” says Matt Page, LEED AP, vice president at SB Architects.

The home presents as a well-orchestrated composition of simple massing and long horizontal planes. The impression is one of balance, symmetry and subtle elegance. A series of clerestory windows add to the sense that the roof seems to float above the structure. Private-entry courtyards transition to a generous great room and kitchen that take in dynamic vistas of the Las Vegas Strip extending across the valley to distant peaks. Expanses of glass and telescoping walls and doors make inside and outside appear as a single space, incorporating the desert setting into the experience. Extensive decks and patios are augmented by a roof deck with a fireplace. Also accessed from a private sitting area tucked behind the great room, it becomes a privileged escape to watch the west’s technicolor displays at sunset.

Flexible spaces enable the home to be eminently adaptable to a variety of settings and experiences. The connectivity among different rooms and areas of the home is striking. Textural elements and extensive use of warm woods tame the volume, so even a solitary visitor sitting in front of the fireplace does not feel overwhelmed. According to Page, such chemistry doesn’t happen by accident. Instead, it’s the result of thoughtful design, which begins with the site and then filters down to the smaller architectural details.

 

Photos courtesy of Shay Vilich photographer / Shapiro & Sher Group / Berkshire Hathaway HomeServices Nevada Properties and David Blank

A new take on Mid-Century Modern, Carlisle at Parasol Park in Irvine, California.

A second inspiration home, orchestrated by Marmol Radziner, a design-build firm based in Los Angeles, was completed this summer. A green roof frames the entry, which is shielded from the street. Architects paired bronze anodized aluminum panels, vertical grain western red cedar and local natural stone with warm and rustic materials and color palettes to reflect the desert landscape.

Sustainability is part of the Modern vision. The home designed by Hoogland Architecture, the only local firmed tapped to design an inspiration home, incorporates passive strategies such as deep overhangs oriented to the solar patterns of the site and aggressive day lighting. Even the infinity pool is incorporated as a design element and reflects the lights of the city at night.

Another home, created by the firm Lake/Flato, employs rammed earth walls, which anchor and blend the structure into the surrounding terrain as well as insulate against Nevada’s intense heat. The construction is aligned with the firm’s belief that design and sustainability are inseparable, part of a place-based approach that merges the building with the surrounding landscape.

Also opening in July was the resort’s $25 million clubhouse designed by the Scottsdale firm, Swaback Partners. A dramatic copper-covered porte cochere previews a building that melds stone, copper, glass and artwork into venue in which the architecture energizes as much as the activities. 

From high-end enclaves intended for a rarified echelon to communities that appeal to a wider demographic, architecture is becoming much-desired eye candy.

Photo courtesy of Jim Doyle, Applied Photography LLC

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What Now? Series: Dynamic Housing Markets in the West

In 2017, Unique Homes is traveling the U.S. to find the dominant stories in each region of the country — This issue covers the Pacific Northwest, Nevada, California and Hawaii. 

By Camilla McLaughlin

Photo courtesy of Matthew Field

A mix of tech, entertainment and financial service industries along with sheer physical beauty and miles of coastline make California, the Pacific Northwest and Hawaii unlike any other part of the country. Recognized worldwide as a mecca for technology and innovation, West Coast metros have an urban vibe that reaches across generations. Islands, bucolic country settings and premier enclaves with a worldwide reputation for ultra luxury add to the region’s singular blend of real estate. So, it’s no surprise the West has some of the most dynamic housing markets in the country with demand for upscale properties anchored by lifestyle, jobs, economic performance, gorgeous settings, and often stunning architecture.

Seattle and Las Vegas

Coming out of the recession, Seattle has been one of the strongest markets in the country, charting 32 consecutive months of year-over-year declines in the number of homes on the market. With less than a month of available inventory, homes in April sold within seven days. In Portland, Oregon and Tacoma, Washington, sales took a little longer — 10 days. Compared to a year ago, Seattle’s median price is up by 17.4 percent, and just over 62 percent of those deals exceeded the list price. The median price in Portland is up 9 percent. Even though the city has had a robust market in recent years, luxury here still commands fewer dollars, with classic estates typically priced under $5 million.

Even in Las Vegas, one of the hardest hit by the downturn, the number of homes on the market continues to decrease, and the average list price is now over $600,000. More out-of-state buyers are eyeing this desert oasis, drawn by Nevada’s favorable tax environment and lower cost of living. Equally powerful incentives are innovative new construction, striking views, a more laid-back lifestyle, easy access and new communities. Ascaya, a new development in Henderson that showcases contemporary architecture, brings a new luxury paradigm to the region. To date, 15 lots have sold, and five additional reservations are on the books. This is a big change from last year when only 14 homes over $3 million sold in the entire Las Vegas valley.

Highest Price in Las Vegas: A $30 million estate in a mountainside setting at The Pointe at The Ridges in Summerlin.

Highest Price in Seattle: $26.8 million for a two-acre waterfront estate with views of the Seattle skyline and the Olympic Mountains. 

Photo courtesy of Gorbis/Getty Images

California

Golden State real estate continues to amp up, with too few on-market properties the biggest drag on sales. Statewide, the May median price was $550,200, the highest level since August 2007. San Francisco prices continue to lead the state and the nation with a median of $1.5 million, but Los Angeles, home to some of the highest priced properties in the country, accounted for the second highest price increase in California in May, 6.9 percent year-over-year.

“This year’s market has been unbelievable with the highest volume of estate properties on record. Way ahead of last year, and last year was a record,” says Joyce Rey, executive director of Coldwell Banker Residential Brokerage, of L.A.’s prime West Side markets. In the $30 million bracket, there have been 14 sales in 2017 compared to only three in 2016, an increase of 367 percent. In the $20 million bracket, 2017 transactions increased 182 percent, from 11 to 31, while those in the $10 million range were up by almost 20 percent. 

In part, Rey says this is due to the large number of foreign buyers in her market, whose familiarity with California is limited to Beverly Hills. “We just have a huge, strong demand with buyers coming from all around the world,” including China, the Middle East and Europe. “They look for move-in condition, prime locations and have a particular preference for views.” Contemporary architecture with walls of glass and light-infused streamlined interiors is preferred.

“Overseas buyers will still often look for a property that has multiple structures, or at least a guesthouse or caretaker’s quarters, but some of the most affluent buyers are Silicon Valley types or celebrity buyers who are not looking for the major estate with a lot of land but something sexy with all the bells and whistles and a lot of wow factor,” says Bob Hurwitz, founder and CEO of Hurwitz James Company.

Another luxury influx comes from the East Coast. Santiago Arana, a partner at The Agency, attributes this trend to a shift in the culture and tech advancements in the work place. “Executives and entrepreneurs are no longer bound to physically reside near work, which means they can enjoy the California lifestyle while working remotely from their L.A. home.” 

Stunning architecture and an integral indoor/outdoor synergy make this home designed by Brian Foster a work of art.

A record $250 million listing put L.A.’s ultra market in the spotlight this spring. In this rarified niche, list prices are at record peaks and sales have been strong, but the number of properties is on the rise. “There is a plethora of inventory; probably around 40 homes priced at $30 million or more on the Westside of Los Angeles, and this doesn’t include the dozens that are ‘pocket listings’ and not officially on the market or the MLS,” Hurwitz says. “In addition, there are many properties being built in the most desirable luxury home environs that will be hitting the market upon completion in the next year or so. This is thin air and the buyers who can afford and are prepared to pay such numbers are finite, so you are seeing some increasing opportunities to make aggressive offers and good buys.”

Another note of caution concerns foreign buying. Post-election, a few buyers from outside the country tabled purchases. Hurwitz explains: “Since a significant part of my marketing and clientele consists of targeting and representing foreign buyers, I am very attuned to this marketplace. Besides having offices and agents in a number of different countries, our business model is very proactive in terms of reaching out directly to the most affluent individuals and cooperating in a major way with wealth advisors, EB5 and education abroad entities and numerous real estate companies in these areas. I have seen some reluctance in investing in the U.S. recently due to uneasiness of the political climate. On a personal and painful note, I had my buyer, a member of the royal family in a Middle Eastern country, back out of a three-week cash escrow on a $40 million purchase of one of my listings as a direct result of the presidential election results.”

This Los Angeles home reflects a vision for contemporary interiors that is elegant, yet casual and inviting.

Photo courtesy of The Agency

On the Horizon in San Francisco:

Personalized condominiums: La Maison in San Francisco’s South of Market (SoMa) neighborhood is a collection of 28 uniquely designed individual residences in a five-story building. Each features high-end appointments. Building amenities include organic gardens and a rooftop deck.

Luxury Adaptive Reuse in Pacific Heights: The Pacific includes 76 boutique residences, 12 townhomes and four rooftop duplex penthouses, each with a private terrace. Interiors were inspired by international hospitality brands including Bulgari and the Satai.

What’s hot:

  • Rooftop decks are the latest “must-have” outdoor amenities. They have become a staple for condos, but increasingly single-family homes also incorporate a rooftop deck, particularly if there is a view. A luxury bonus is elevator access.
  • Bunk rooms in Tahoe are a favorite second-home addition, but this trend is not limited to Tahoe. On many of our “On Location” visits we’ve found that bunk rooms, often with an adjacent playroom, are not a rarity. Even adults find it’s hard to resist the pull of such cozy appointments.
  • Basements in both San Francisco and L.A. as residents scramble for more space.
  • Hybrid designs with an exterior reflecting one style and the interiors another. Frequently seen are combos with a traditional exterior and a decidedly contemporary interior.

Photo courtesy of Christopher Mayer Photography

What Buyers Want:

When it comes to luxury, few trends can be generalized, even downsizing and simplification. “Preferences are totally mixed, and luxury buyers get what they want. Luxury buyers don’t try to fit into a box. Instead, they make the box,” says Josh Reef, with Hurwitz James Company.

Few upscale consumers are willing to sacrifice to reduce square footage. “Our buyers prefer a high square footage for all the rooms they need and desire in a home, such as personal wine cellars and gym or yoga rooms. While there is still a demand for high square footage, buyers are shifting toward a more-casual home living environment. In exchange for formal living and dining rooms, buyers are requesting rooms that allow them to fully utilize 100 percent of their home on an almost daily basis,” says Arana.

Still, brokers say the one thing almost all buyers want is to have everything done. “Even at the lower end of prices, very few are interested in a renovation,” says Trinkie Watson with Chase International in Lake Tahoe.

Photo courtesy of Martis Camp Sales

This story originally appeared in Unique Homes Summer 2017. 

Click here to see the digital version.

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