All posts by Camilla McLaughlin

Keeping It Real

with:
10 Years Later
Our year-long look at what’s changed in U.S. luxury real estate since the 2008 recession.

 

When it comes to architectural styles and design trends, authenticity — not opulence — is what consumers want today.

Contemporary … modern … innovative … intentional … authentic … flexible … sum up residential real estate today. During the recession and early recovery, expectations focused on the “new normal,” what real estate and life, in general, would be like following such a seminal event. But real change is often subtle yet inexorable, and that is the story of residential architecture and design over the last 10 years.

 

After almost a decade, the much hyped new normal has finally arrived. Almost suddenly, it seems everything — architecture, design, outdoor connections, consumer attitudes — has been revamped in ways that entirely transform luxury homes. “It’s not just about how beautiful the building is, but what’s the experience. That’s a big evolution from where we were pre-recession,” observes Bruce Wright, AIA, vice president and principal at SB Architects.

 

Architecture

 

“Before the recession, I would say of the 60 to 70 homes we design a year, we would get one contemporary request and maybe a transitional request from clients. Now it’s flat-out contemporary. We’re talking flat roofs, pools on the roofs, outdoor screened rooms up on the upper levels,” says

 

Michigan architect Wayne Visbeen, AIA. “The resurgence of mid-century modern has also been a big, big part of our business.” Even when clients want homes that reflect regional architecture and connections, he says, “it’s with a contemporary edge, definitely with more simplicity and less frou-frou.” Visbeen’s firm works in 48 states and 10 countries, and he sees the move toward contemporary, notably a warm contemporary, playing out nationwide. Also in demand, even in locations as diverse as Beverly Hills and Miami, is an interpretation of contemporary dubbed “modern farmhouse.”

 

In the South, Stephanie Gentemann, AIA, a partner at g2Design in Savannah and director of Palmetto Bluff’s design review board, a transitional aesthetic, which she sees as a blend between contemporary and traditional, is gaining prominence. Gentemann also sees modern farmhouse garnering interest. Preferences for contemporary, transitional and modern farmhouse are not restricted to upscale homes, but range across all age groups and income levels.

 

For luxury, Gentemann says, “The more expensive the house, the more eclectic we get in terms of architectural style. There isn’t one predominant style that I see that is dictated by price point.”

©2018 Ciro Coelho / CiroCoelho.com

“What we see now is driven by a better- educated consumer. We’re seeing an appreciation for contemporary architecture with a warm material palette that is accessible and friendly, but not thematic, that is not an interpretation of another culture. It’s really about creating this kind of transparency, layered architecture that has rich materials and more materials communicated in a more contemporary format,” says Wright.

“I think it’s an interesting place where we are design wise,” says Ken Bassman of Bassman Blaine Home, who helps owners turn Montage residences into dream homes in Maui. “People want things to be more streamlined, clean and neutral. But it doesn’t mean that it’s bland or boring. There’s actually more color with artwork,” pillows and accessories. Wall coverings are back along with textural finishes and even a touch of glamour.

 

On the Big Island, designer Gina Willman says, “everyone is looking to ‘lighten and brighten’ their surroundings. We are lightening up walls by plastering or painting with hues significantly brighter than the ‘50 shades of beige’ phase of the 2000s. New homes are exploring lighter wood tones and cabinets.”

Revamped Interiors

 

Exterior architecture and elevations are only one transformation for homes. Inside, floor plans are being revamped as interiors undergo substantive alternations. “If I pull out a floor plan from 10 years ago, it would seem like a total disaster. There are things we would never do now,” shares Chris S. Texter, AIA, a principal at KTGY Architecture + Planning.

 

Open floor plans continue to define interiors. Living rooms are passé, often replaced by smaller rooms owners can configure however they want. And the jury is still out on separate dining rooms. James Rill, principal of an eponymous Washington, D.C. architectural firm, says dining rooms are often designed for alternate or dual uses such as a library.

 

Open plans are evolving to be more functional and nuanced. The intentional piece in open-concept design, observes Chicago designer Mary Cook, is the way these spaces are “high-performing, multitasking and they share their functions across rooms. People want the spaces to live better; they just don’t want to fill empty space.”

A variety of materials, warm hues and stone are contemporary hallmarks as shown in the Marmol Radziner designed inspiration home at Ascaya in Las Vegas.

 

Photo courtesy Boulderback 5.

Currently a dining room, this space is equally adaptable as an office, studio or play area. Pocket doors add to this versatility without interrupting the flow. 

 

©David Tonnes dba. PanaViz Photography / Courtesy of Ken Bassman

Open to Innovation

 

Even in large homes, Visbeen says his firm looks for opportunities for more creative uses and more innovation. “If I had to say anything was the real trend, it would be innovation for us.”

 

“Creating spaces where the kitchen, living and dining all seamlessly merge together supports a more contemporary style of architecture,” Wright explains, adding, “we are doing it on a grand scale, but also in an intimate way to help support the cadence of a daily routine.”

 

Kitchens, particularly in upscale homes, capture even more square footage. “People are spending a lot more money in their kitchens,” says
Pamela Harvey, owner of Pamela Harvey Interiors in Washington, D.C.

 

In lieu of luxury mainstays such as Wolfe or Viking, many opt for even higher-end appliances including La Cornue, AGA and Bertazzoni. Colors are another growing preference for both cabinetry and appliances. And clients now want range hoods to be powder coated to match the cooking appliance. What’s trending for colors in kitchens is dark blue, Harvey adds.

 

Pantries are back and are more like those from 100 years ago. “Pantries are taking on a life of their own,” says Texter, referring to the need for more storage along with additional functionality in kitchens. Open-concept designs mean the kitchen is always on display, so back kitchens or a second kitchen area tucked out of the way (once a nice-to-have amenity) are now a luxury “must-have.”

 

They can range from an expanded pantry with additional counter space to corral counter clutter to a fully outfitted butler’s pantry, which at the highest price points might morph into a full-on catering kitchen.

More square footage is devoted to kitchens and pantries.

 

Photo by Stacy Zarin Goldberg / Courtesy Pam Harvey Interiors

New Connections

 

One of the most transformative changes in floor plans, the orientation of kitchens and great rooms and the experience of the home overall, comes from the way interiors now relate to the surrounding landscape. “Outdoor living spaces are an enormous part of our business and have been for years, but it has taken an even greater level,” observes Visbeen.

 

Ten years ago, outdoor living referred to patios, gardens and decks. Today, thresholds are blurred, and the division between inside and outside is almost nonexistent. “It used to be enough to have a sliding glass door or a French door that went to the backyard. And now it’s about how that indoor space expands and takes advantage of the fenestration. Then, there is the desire to have a room outside, and that wall just disappears, and the space doubles in size,” says Texter. “Now we’re practically designing the backyard to go with the home. That space is part of the home, and the design is integral.”

 

New technology is also a catalyst for this transformation. The cost of large windows and disappearing doors is much lower than before the recession. New products include more sizable expanses of glass, broader doors, doors that pivot, and windows and doors that wrap around corners, greatly expanding options to integrate inside and outside areas, visually and literally. Having sightlines that directly extend to an outside patio or room visually expand smaller rooms.

 

Metal frames also mean less weight and larger panes of glass, according to Rill. In traditional homes, renovations and additions almost always address the indoor/outdoor synergy. Rill says they use metal framed glass more frequently and, in some rooms, disappearing doors are replacing sliders and French doors. “People are moving toward something that’s a little sleeker, a little cleaner and a little more playfully modern, but still within traditional proportions and shapes.”

Today, thresholds are blurred, and the division between inside and outside is almost nonexistent. 

 

©David Tonnes dba. PanaViz Photography / Courtesy of Ken Bassman

Authenticity, Not Opulence

 

A decade ago, luxury homes were often considered a testimony to status, and ostentatious demonstrations of affluence were acceptable. “During that era, it was in vogue that the more money you spend, the better it was. And after the recession, people came away from all of that. That heavy, goopy, layered, gilded aesthetic just evaporated. There was this yearning for authenticity,” explains Cook.

 

“Because of knowledge and images and travel that people are exposed to, they are more willing to be authentic to what they want instead of what is considered the norm. Also, people are moving away from that and it’s become more about what they want in their home and how they want their home to feel,” says Harvey. “They want their home to reflect who they are, whether they have a designer help them get there or not.”

 

Are homes getting smaller? Yes and no. Overall home sizes have seesawed since the recession, according to data from the National Association of Home Builders, but designers say how a space functions and is finished trumps size. “People are rightsizing more, so we’re seeing higher-end finishes in smaller square footage and the desire to use rooms more efficiently,” says Visbeen.

 

Rightsizing might be a trend, but signs that home sizes are beginning to creep up — especially for luxury properties — are prevelant. Since the recession, Gentemann sees the range of home sizes expanding. “Not only are there smaller homes, but larger homes as well.”

 

What has changed is the way additional square footage is used. “As square footage is going up, the walls are coming down and those spaces are opening up to each other. So those core areas where people come together are most important; I think what’s driving that is the casualness of life today and wanting to be able to come together,” explains Cook.

 

“People are looking for a graciousness of space, which is different than size,” says Ann Thompson, senior vice president of architecture and design at Related Midwest. “Consumers are very savvy now in a way we didn’t see 10 or 15 years ago. I think people are much more cautious and careful in their decision making. They are really assessing value.”

 

In the higher end, the more affluent the buyer, the more astute they are. “These are people who are very accomplished in their own field, and often that means they’re great decision makers. They’re researchers; they educate themselves about things in their life that are important to them and certainly their home is one of the most important decisions that they make,” shares Thompson.

 

Homes Are Resorts, and Resorts Are Homes

 

Increasingly home is seen as a refuge, a place to regroup and connect with families, which means primary homes are becoming more like resorts. Following resort trends, wellness is growing as a desired attitude, which means exercise spaces, a high level of air and water purification, steam showers and saunas are all desired amenities. “I think the overall trends in hospitality design and high-end residential continue to be largely influenced by travel, social media and the accessibility of high-end design that is reaching the consumer in general. There is a continual elevation of expectations,” shares Wright. On the other hand, second homes are becoming more like primary homes, with larger master closets and the addition of any needed features to equip the homes for year-round living. Offices are also another potential addition, as are larger kitchens.

 

Also, sustainable and energy-saving features, along with smart home technology, are no longer amenities. Rather, they are expected. Looking ahead, designers have a raft of features they see as most desirable. They include: hidden rooms, gun safe rooms, his and hers master baths, diverse wine storage areas, multiple detached structures, storm preparedness, backup generators, outdoor living on multiple levels of homes, and future elevator shafts. One innovative use in a Palmetto Bluff home, until the elevator is required, is to convert the space into a climbing wall, which keys into Visbeen’s observation that innovation might be the overarching trend.

This originally appeared in Unique Homes Fall 2018

 

Click here to view the digital edition.

Leave a comment

The “Auto” Mobile

with:

Interest and research in driverless and self-parking cars is rapidly growing, as are ideas for how this technology may impact housing development.

By Camilla McLaughlin

 

The race is on among car manufacturers, tech companies and cities to develop reliable self-driving vehicles and required innovative infrastructure in what is being characterized as the third transportation revolution, one that possibly could have as dramatic of an impact as the automobile. Personal vehicles are only one facet of this future vision. Ride hailing services, shared ownership of cars, autonomous shuttles and buses, and self-driving trucks are all part of the scenario, along with Wi-Fi-enabled infrastructure and roadways that could charge cars. 

 

To illustrate how dramatic the transformation might be, futurist Jack Uldrich uses two photos of Fifth Avenue in Manhattan. In a shot from 1900, horse-drawn vehicles fill the roadway. Thirteen years later, only one horse-drawn vehicle is in evidence, and cars and trucks take up the entire street.

 

“The transportation revolution will be a game changer for most real estate sectors” is the prediction of Green Street Advisors in a report, The Transportation Revolution: The impact of ride-hailing and driverless vehicles on real estate, prepared for the Urban Land Institute’s fall 2017 meeting.

 

“Most experts agree that the automobile as we know it will be largely obsolete by 2030. In its place will be fleets of driverless cars that shuttle people safely and efficiently through our city streets. But it’s the broader impacts of this technology that are a game-changer for the future of our cities and the human experience. The opportunity is not only to create new places that accommodate driverless cars, but to reshape our existing cities and towns into the kind of amenity-rich, vibrant places that we all enjoy,” observed architect Andy Cohen, co-CEO of Gensler.

Although a vast array of regulatory and legal challenges need to be addressed, consumer acceptance is considered most pivotal to the broader adaption of autonomous vehicles (AVs). Right now, few consumers have tried self-driving cars. Experts agree acceptance will only come with knowledge and experience.

 

One analogy often used to illustrate current apprehensions about new technology is the elevator, which initially was considered an incredibly risky innovation. “People didn’t want to get into it. Today, you and I don’t give a second thought to jumping on an elevator, and it whisks us up a hundred stories of a skyscraper. I think that same thing is going to happen with autonomous vehicles. We’re just soon going to get in a car, press a button and it’ll take us to our destinations without our thinking of it,” says Uldrich, who says the impact of the elevator also gives insight into the effect of technology on luxury real estate. “Before the elevator, wealthy people lived on the ground floor, and they made the servants walk up the stairs. But with the invention of the elevator, the penthouse then become the most desirable space. And so, technology sort of changed behavior in a curious way.”

 

“For consumers, the tipping point for large-scale adoption will come when not owning a car makes more financial and logistical sense than traditional ownership. Car enthusiasts, the affluent, and rural households will continue to own cars as AVs evolve,” explains Rich Palacios Jr., head of research for John Burns Consulting. Still, real estate agents in cities with high levels of congestion such as Boston or San Francisco are beginning to hear comments from high-end clients that they are planning to reduce the number of vehicles they own.

Even though many well-informed experts weigh in with varied opinions on potential transformations for real estate and housing, the only certainty is the change will be incremental, disruptive and far-reaching. “So, what impact will AVs and ride-sharing have on the housing market? We think a big one,” says Palacios. “A portion of the money once allotted to owning/renting a car should also free up for owning or renting a home.” As cars become more of a commodity, rather than a possession, costs such as fuel, maintenance and insurance will disappear along with loan/lease payments. “The boost to disposable income will be significant, once scaled,” says Palacios. Increases in productivity for individuals as well as industry are another expected result that will drive economic growth.

 

When the price of a parking space can exceed $300,000 or $400,000, even high-end consumers begin to examine the value of owning multiple vehicles. Conservative estimates suggest demand for parking could decline by 50 percent or more, freeing up extensive prime acreage. Already, in cities such as Chicago and Philadelphia, some former surface parking lots are being repurposed as mixed use or residential towers. Not only will the need for parking near prime buildings be eliminated, but overall, individual parking spaces will be smaller because autonomous vehicles do not require space to open and close doors when parked.

Some parking garages today are being designed with future adaptation to office or residential purposes in mind. Speaking at Trends 2018 sponsored by ULI Arizona, Veronica Siranosian, senior project manager with the global architecture and engineering planning firm AECOM Ventures, said they are recommending building new parking garages with flat floors and higher ceilings with the potential for HVAC and electrical.

 

Other changes she anticipates include mobility hubs that would incorporate bike share, drop off and pick up, automated shuttles and perhaps access to transit in one location. Additionally, building and street design will also have to consider added spaces for pick up and drop off.

 

Since most autonomous vehicles will be electric, the number of gas stations will also decline, further unlocking acres of what Palacios calls “prime real estate.” This reclaimed acreage will also improve the supply of homes in locations where inventories have historically been constrained, possibly dampening appreciation and enhancing affordability.

 

For a while, new construction in cities or close-in locations might impact interest in real estate in outlying suburbs, but in the long run demand for distant suburbs will reemerge as consumers realize they can use the time involved with longer commutes productively.

 

Overall, most expect to see a continued revival of cities. “What I am most excited about related to self-driving vehicles is society’s ability to envision better uses of the all-public space that is currently devoted to automobiles. In the future, I believe cities will have more green spaces, public parks, wider boulevards, and, perhaps, more affordable housing because we will be able to convert our garages and parking garages into fully functional living spaces,” says Uldrich.

 

“Get ready for more homes per acre, with the days of wide streets, massive driveways, and two-/three-car garages a thing of the past,” predicts Palacios. Higher density might be one potential outcome for residential real estate, but for consumers the result will be more livable square footage.

While fully autonomous driving seems many years away, planners and developers are already rethinking how new development needs to be planned. “We’re already seeing apartment developers shifting to zero parking. Innovative master-planned communities such as Florida’s new Babcock Ranch (eventually home to 50,000 residents) are already utilizing AV community shuttles, with the goal of having on-demand AVs that individual residents can use via smart-phone apps,” says Palacios.

 

For current homeowners, unused garage space will offer a range of opportunities to add amenities or create new uses from live/work options to multigenerational spaces.

 

For an aging population, new transportation options will be a game changer with the potential to alter where and how they live. Most projections envision a growing number staying in their existing homes rather than moving to assisted living.

 

The transportation revolution also makes a bullish case for the repair and remodel industry, and adaptation of homes for aging in place is only part of the push for renovations. The conversion of garages will also boost this real estate sector.

 

Two years ago, the idea of self-driving cars seemed more like science fiction than a near-term possibility. Today, despite the first traffic fatality from an AV, the push to develop this technology remains strong. Major automakers including General Motors and Ford as well as Waymo (a unit of Google’s Alphabet), Lyft and others continue to actively pursue the technology for both cars and trucks. A majority of automakers are moving toward semi-autonomous vehicles. GM, for example, has added hands-free cruise control to their Cadillac line along with vehicle-to-vehicle (V2V) communication with similarly equipped vehicles that alerts drivers to disabled vehicles, sudden stops or a crash ahead. It’s also a good example of how autonomous vehicles will eventually communicate with one another as well as with infrastructure. GM recently petitioned the federal government to begin testing cars without steering wheels and pedals.

 

The National Transportation Safety Board defines five levels of vehicle autonomy. Current vehicles fall into levels 2AV and 3AV. One anticipated transition to fully autonomous vehicles at Level 5 is dedicated travel lanes enabling them to trail closer together and communicate with each other and infrastructure. Hypothetically, this scenario would facilitate the movement of traffic, but some experts hazard that AVs will only increase congestion.

 

California and Arizona are on the forefront of the transportation revolution, incubating new technologies including potential use without a driver in the car. In late January, Waymo got a permit to operate as a Transportation Network Company in Arizona, which allows Waymo’s fleet of driverless minivans to pick up and drop off paying riders through a smartphone app or website. Other states including Texas, Ohio and Michigan are also proactively working on AVs.

 

Any look ahead also requires a look back at predictions that went wrong, including one notable projection, pegging the number of cellular phones at the end of the 20th century at just under a million. For driverless vehicles, estimates of the time frame for adoption might not hit the mark, but few would deny that transportation’s future will not involve steering wheels and brake pedals. 

Leave a comment

How Luxury Home Buying Changed from 10 Years Ago

with:

Appearing in UH Summer 2018, “Ten Years Later: Our year-long look at what’s changed in U.S. luxury real estate since the 2008 recession.”

Consumer sentiments toward owning and buying real estate continue to evolve, along with the definition of luxury.

 

By Camilla McLaughlin

Ten years ago, there were few signposts for the journey out of the recession. Real estate’s perfect storm got a lot worse in the summer and fall of 2008 as a combination of job losses, high energy costs, an ongoing tide of foreclosures, a pending presidential election and the near collapse of the credit markets rocked the economy. Many, but not all, upscale consumers put real estate plans on hold and shifted into a watch-and-wait mode. “Consumers’ confidence gets shaken, and the rich are not immune,” observes John Brian Losh, publisher of Luxuryrealestate.com and owner of Seattle brokerage Ewing & Clark.

 

Following that low point, luxury real estate embarked on a remarkable journey of recovery with luxury properties selling and prices escalating in many locations, boosted in part by the exponential growth of wealth worldwide. Just in the last year, the combined net worth of the world’s billionaires increased by 18 percent. Residential real estate remains a favored investment with prime property sales worldwide up by 11 percent in 2017.

 

Attitudes toward buying, selling and luxury overall have followed an equally transformative path. “The lesson from the recession is to buy smart. Impulse buying, overextending to get the home of your dreams, and buying without doing your homework have all gone the way of the fax machine,” says Jason Haber, a broker at Warburg Realty in Manhattan.

 

Value is most important. Greenwich saw two record sales in 2017, but only after list prices were reduced. In their luxury white paper, Christie’s International Real Estate reported strong sales “where buyers and sellers showed a willingness to adjust pricing expectation to new market realities.”

 

“Price was the name of the game,” said Michael Saunders of Michael Saunders & Company, noting that luxury homes in Sarasota sold in record numbers after homeowners adjusted prices.

 

Affluent individuals also have a new perspective on the investment potential of properties, locations for both primary and second homes, expectations regarding the agent’s role in the transaction and what constitutes luxury.

 

 

What Is Luxury?

Few other terms have been hyped more than the word “luxury” in recent years. Most industry experts would agree with Mike Leipart, managing partner of The Agency Development Group in Beverly Hills, who says, “It’s used so often that it’s become virtually meaningless.”

 

Even wealthy consumers struggle to find a suitable alternative phrase, yet they have a clear understanding of what luxury means today. “I think people can’t describe it, but when you walk into it, when you are standing in it, you respond to it,” says Craig Hogan, vice president of luxury, Coldwell Banker Real Estate. “People can tell quality; they can tell beautiful design. Service is critical.”

 

“Ten years ago, the luxury industry was able to dictate to consumers what luxury was and almost define it for them. We are not able to do that today,” explains Kevin Thompson, CMO of Sotheby’s International Realty Affiliates LLC. “Luxury is being viewed from an experiential perspective. People are choosing to live different ways and somehow have what they value. It is a very individual approach.”

 

“The meaning of luxury has changed a lot. I think luxury has become personal. It’s become a feeling. It’s become an emotional part of a real estate experience,” says Christina Huffstickler, owner of Engel & Völkers in Atlanta.

 

“You can’t pin it to price level or finish levels. It’s very complex. It’s very much what people are willing to pay extra for,” says Leipart using the example of how a desirable view — prized by today’s buyers — amps up a per square foot price. “I think the basic thing of luxury is that it is everything that has not been commodity priced,” he explains.

 

 

Value & Inventories

“By and large, people value home ownership,” shares Hogan. “I just keep watching this trend toward smaller and more wonderful. Just beautiful in every way. Great finishes, smart home technology, all the things you’d expect except beyond those expectations.”

 

“I think that people, wealthy people, have always found real estate to be an attractive investment. It’s an asset that usually appreciates that they can enjoy,” says Losh.

 

Coming out of recession, the Bay Area led the recovery, and the region continues to rack up amazing stats with May’s median sold price exceeding $3 million in both San Francisco and Silicon Valley, according to The Institute for Luxury Home Marketing. Inventories remain barebones with homes selling in weeks. In fact, the median time it takes for both attached and single-family homes to sell in Silicon Valley is about nine days. Here, as in many other upscale locations, the biggest issue is too few listings to satisfy demand.

 

“Even with interest rates rising because of the moves the Feds have been making the last 18 months, there is no slowdown in the appetite for wealthy consumers purchasing homes,” says Jim Walberg with Pacific Union, noting, he has never seen more all cash purchases in 35 years. “Buyers and sellers still view Bay Area real estate as a great place to put their resources. And, remember, these are wealthy people, so it’s not as if they are not diversified in many other investment categories.“ Many of these purchasers are looking at long-term ownership. The homes have a dual purpose: a fun community and place to raise their kids, and a home they plan to live in after their children are grown.

 

“The primary residence purchase remains largely emotionally driven based on finding the right property to suit the purchaser’s desire for location, space, finishes, et cetera,” rather than a cold calculation of investment dollars,” says Leslie Hirsch, an advisor with Engel & Völkers in New York City.

 

 

Second Homes & Investments

Second homes and resort properties are in demand. More than half of the world’s high- and ultra-high-net-worth individuals own two or more residences, and many sought out at least one luxury property acquisition in 2017 and 2018, say experts at Christie’s International Real Estate in their annual industry report.

 

Among the U.S. population with a net worth of $500 million and up, 2,700 own on average 10 or more homes each, shares Hogan.

 

“An interesting trend we have noticed is that more wealthy clientele are electing to purchase properties as investment pieces instead of purchasing a third or fourth home to use as a personal residence. Or in some cases they are using a single property as both a vacation home and income property,” shares Anthony Hitt, CEO of Engel & Völkers Americas.

 

“Second, third and fourth homes are now being scrutinized more carefully to make sure there is an upside in the investment should the purchase decide to sell in the future,” says Hirsch. Investors are diversifying portfolios, she says, “choosing to buy property in several countries as a hedge against a drastic change in one country’s economy.”

 

Affluent consumers continue to be bullish on real estate, an attitude enhanced by recent volatility in equity markets. Losh believes security and safety are more important to consumers. “People are also looking for a safe harbor. They want to feel safe, and they want their investment to be secure,” he says.

 

 

What Buyers Want

Ten years ago, the luxury echeleon was defined as homes priced in the top 10 percent of any market, and that benchmark still stands. But for consumers, dollar signs do not necessarily determine luxury. “Money sometimes doesn’t even become part of the search parameters. They just want to find the right property,” and these buyers today are willing to take their time, says Katie Hauser, a broker associate with Baird & Warner in Winnetka, Illinois.

 

Like many agents today, Hauser sees several different buyer profiles in the market. Some, particularly empty nesters, “want to ditch their suburban house for something unique. They want value, but they want to find the right place,” she says.

 

“There is a search for the unique. The emerging luxury consumer isn’t interested in cookie-cutter anything. They want personal and outside the norm and are willing to pay more for that,” adds Thompson.

 

On the other hand, other upscale buyers want a platinum location and are extremely discerning regarding every facet of the property.

 

“Luxury buyers in Omaha want what they want, and if they cannot find it they build,” says Judy Smith with RE/MAX Real Estate Group in Omaha. High on wish lists are rooms large enough for grand pianos, buffets and sideboards. “They still love walk-out basements for entertaining and as a separate living area for family members extended visits. The view from the deck is always important.”

 

 

Millennials

Millennials are beginning to make their play in real estate. Because they delayed buying a home, many of their first purchases fall into the luxury niche, giving new meaning to “starter home.”

 

According to research from Luxury Portfolio International, most buyers seeking $1 million-plus homes are 25 to 49 years old and have inherited or plan to inherit significant wealth. This consumer has begun powering the $1 million-plus real estate market, more so than their older counterparts.

 

Millennials overall, says Lindsay Bacigalupo, an Engel & Völkers licensed partner in Minneapolis, “waited to buy and are now in their late 20s and early 30s. They are buying starter homes that are $400,000 to $1 million.

 

Millennials expected to be as transformative for real estate as the baby boomer cohort was. “Millennials are the next generation who are redefining luxury. Their attitudes toward homes are shaping what is publically seen as ‘good real estate,’ influencing what others look for in a home,” says John Dean, license partner with Engel & Völkers Vancouver. “Millennials are rejigging real estate wish lists, which differ from past generations. They place a big focus on the shared economies. They prioritize modern design. They see real estate differently than predecessors as big traditional homes are too expensive for them to afford, at least right now.”

 

“Bigger is a little yesterday,” says Hogan, who characterizes current preferences among all consumers as “smaller and finer.”

 

The drive for a safe harbor along with quality of life, changing demographics, government tax policies and technology are all reshaping the geography of luxury. Denver, Nashville and Atlanta are new luxury players. Victoria, British Columbia topped Christie’s annual report as the primary luxury market. Santa Fe was the hottest second home market; Sun Valley and the Bahamas were in the top five.

 

More consumers are also opting to make places such as Charleston, South Carolina; Austin or Orlando home. A number are also trading their primary home for a resort home in locations such as Jackson Hole or Bluffton, South Carolina, and many are doing so with kids in tow.

 

“The definition of luxury means something different to millennials than previous generations. As we know, they value the experience of material wealth. They may choose to settle in traditionally second-home markets to be close to the beach or mountains. They are not as tied to a specific geographic area as many have the option to work remotely,” explains Hitt.

Technology & the Agent’s Role

Probably nothing has changed more, as well as stayed the same, as the way homes are sold and how real estate agents work with buyers and sellers. “Technology has played a huge role in changing everything we do now as agents,” says Dean.

 

Buyers are more knowledgable; the mechanics of the transaction are more streamlined. Artificial intelligence and virtual reality are starting to kick off the next tech evolution.

 

The agent’s role continues to shift from provider of information to trusted advisor. “Today’s buyer comes armed with data, comps, neighborhood analysis, and newspaper articles. In some cases they know more about pricing than the listing agent,” says Haber.

 

What agents need to understand, Leipart says, is, “you don’t sell anything” to the wealthy. “If your approach is to get them to buy, you are going to strike out every time. The best you can hope for is to be a trusted advisor, and you can’t have that role if you are trying to sell.”

This originally appeared in Unique Homes Summer 2018: The Waterfront Lifestyle

Click here to view the digital edition.

Leave a comment

On Linda Isle

with:

By Camilla McLaughlin

 

Seldom is a residence as spectacular as the setting, which makes the architectural showpiece featured on our cover a rarity. An address on Linda Isle is prized in Newport Beach, where only a select few homes sit directly on the bayfront and an even smaller number on an island. “Only a handful of these islands are guard gated, which makes Linda Isle especially desirable,” explains developer Zachary Eglit, president of BDR, Inc.

 

Expectations regarding architecture and design have never been higher than today. This custom residence is an ideal interpretation of Contemporary’s new aesthetic, which is warm, approachable and eminently comfortable. There is an integral sense of elegance and function that only derives from excellent design.

 

On the main floor, distinct spaces, including a designer kitchen augmented by a fully equipped butler’s pantry, and a great room, merge into an impressive open floor plan punctuated by a dramatic suspended glass staircase. The upper level incorporates a second great room. One of the four en suite bedrooms is also oriented to be a potential private office with fabulous views. White oak flooring enhances the sense of continuity between the two levels.

 

Expanses of glass bring in daylight and starlight. Blues of the water and dynamic panoramas are part of the experience. Disappearing doors make a seamless transition to outdoor amenities, including an outdoor kitchen, al fresco dining and a dockside patio. Aligned with current preferences toward slightly smaller but exquisite homes, this residence is spacious enough for a growing family but also manageable for a couple.

 

The Linda Isle community offers amenities including a private beach, but for this home the ultimate is onsite — dockside. With several slips, it can sit a vessel of up to 90 feet, ensuring ample room for a yachtsman’s toys. The experience is priceless.

This originally appeared in Unique Homes Summer 2018: The Waterfront Lifestyle

Click here to view the digital edition.

Leave a comment

What’s on Tap for Kitchens?

with:

Contemporary versus Farmhouse. Warm woods versus stark whites. The latest kitchens incorporate new ways of thinking.

 

By Camilla McLaughlin

 

The kitchen story continues to be painted in white and grey, but for luxury the narrative is changing. “When it comes to high-end luxury, it’s about quality. It’s about finishes, color and the wow factor,” says National Kitchen & Bath Association Industry Relations Manager Elle H-Millard, who is also a certified kitchen designer, noting that luxury continues to be more about the user experience.

 

There is no better place to scope out what’s ahead for kitchens than the industry’s annual trade event, the Kitchen & Bath Industry Show. Although the focus might be the overall kitchen market, many of the trends and innovations are ideally suited for the largest budgets and savviest design aspirations.

 

Still, Christopher Grubb, president of Arch-Interiors Design Group in Los Angeles, points out that luxury today speaks to multiple tiers in the market. “Luxury doesn’t have to be about cost. Luxury is an experience, and at every price level people want luxury finishes.”

 

White and grey remain the preferred color schemes according to the vast majority of design experts and industry professionals responding to NKBA’s annual trends survey. Still, anyone walking the KBIS show floor this January couldn’t help but notice that wood in medium to light tones was very much in evidence, either for cabinets — especially in contemporary designs — or as an accent. “I am seeing a lot of movement because grey and white have been so popular. I am seeing wood tones come back, which is kind of nice. We haven’t seen that in a while,” observes Grubb. The emergence of wood, either as a primary finish or as an element in a design scheme, reflects a subtle shift and growing desire to integrate an organic feeling.

 

Typically, styles gain or lose momentum over an interval of several years. This year, Farmhouse suddenly jumped to the top in the NKBA survey with 79 percent of design professionals characterizing it as “trendy” or “very trendy.” This eclectic style mixes white with warm metals and mellow weathered wood. Reclaimed wood beams and hardwood flooring along with barn doors and apron sinks enhance the Farmhouse sensibility.

 

Transitional, which combines clean lines and streamlined traditional details, was the second most preferred style. Main elements of this style include quartz countertops and wood floors.

 

Overall, for countertops in every style, H-Millard says, “quartz is where it’s at today;” 94 percent of professionals surveyed agree. Hardwood was the preferred flooring, according to 78 percent of respondents.

 

Contemporary, defined by linear forms with flat-front doors and frameless cabinets, followed as the third-most-preferred style. Hallmarks include open shelving, clean lines and appliances that meld into cabinets. It’s important to note the narrow spread in the survey between Farmhouse at 79 percent and Contemporary at 73 percent.

 

Dark tones continue to find their way into kitchens in faucets, hardware and cabinets, sometimes as a contrast with white. For cabinets, blue is emerging, and black is gaining traction for both faucets and cabinets. Glossy finishes are out; matte is trending. A matte surface, combined with processes that highlight grain and create a textural finish, imparts softness and depth that creates almost a tactile sense. It’s not an overstatement to call this “the new black.”

 

The desire for customized storage shifts more attention to what’s inside cabinets and drawers, especially in the high end. Every year manufacturers expand the number of inserts and products designed to enhance organization, meet everyday cooking requirements and adapt kitchens for a range of cuisines, special interests and abilities.

 

“One of the things that came out of the luxury custom movement is really creating an experience for the user,” says H-Millard, who sees more and more companies tapping into the human touch, offering ways to customize products.

 

This year, Elkay introduced an option offering various front panels for their farmhouse sinks, which allows consumers to change the look of the sink. Pops of color are another hallmark of high-end kitchens, and H-Millard says a growing trend is the use of bold colors to make large gas ranges the focal point of a kitchen. Often too, manufacturers give consumers ways to change the look with panels in multiple colors that can be switched out. “They are making new colors every year. There are so many options to choose from in bold pops of colors, everything from knobs, materials and finishes. That alone is really kicking the personalizer for the user experience to a whole new level,” explains H-Millard.

 

For refrigerators, Tami Catalano, sales consultant with Monark Tucson Showroom, says it’s about “columns, columns and more columns. We have just about every brand offering columns now. It’s about who can dress them up more, be more flexible or offer the most competitive price point.” Having the option to create whatever configuration a homeowner desires and seamlessly integrate it into a custom design completely personalizes this appliance. Manufacturers continue to offer new takes on stainless, but Grubb says for high-end kitchens typically the choice is a paneled finish that matches the cabinets, so the appliances blend in and make the kitchen appear larger.

 

Sinks are on the cusp of morphing into the most versatile product in the kitchen. Not only are large format styles in demand, but manufacturers offer many ways to configure a sink along with accessories that maximize function. Often a sink can be combined with under-cabinet refrigeration. An induction burner adds an option to cook pasta or lobster next to the sink. Multiple bowls also make the sink a spot to ice drinks or seafood. H-Millard says, “This is a whole new way of thinking, which will drive new traffic patterns in the kitchen.” Even the traditional work triangle is being tweaked by large islands. A standard U- or L-shaped plan is now focused on the island, and H-Millard expects this to change the configuration of cabinetry. “It is also going to change how people look at functionality in their kitchens,” she says. Mid-height cabinets should gain traction.

 

For next-generation kitchens, look for a growing interest in wellness and freshness to spark a new wave of innovations.  

 

Photos courtesy of Laurent Levant Interior / Dave Bryce Photography, istockphoto.com / Hikesterson, Taryn Emerson Interiors / Jared Bumgarner, Haffle America Co., Mike Tuell, Arch Interiors / Greg Weiner Photography

Leave a comment

Through the Years: Generational Differences and Societal Change

with:

Generational differences drive so many societal changes, yet overgeneralizations about the wants and needs of large portions of the population can lead to costly misconceptions. One well-respected researcher is trying to unravel myth from reality.

By: Camilla McLaughlin

The new year is prime time for real estate forecasts and most experts look to the economy, stock market performance, job growth, the cost of labor and materials for insights into the future. Population trends figure into these recipes, but some experts contend the key to understanding what’s ahead for real estate lies in an in-depth analysis of changes in generations decade by decade.

“Sweeping demographic and generation shifts are quickly transforming America,” says John Burns in the introduction to Big Shifts Ahead, which takes a deep dive into generations and how they influence real estate. “Every individual and business feels the impact of government policies, the sharing economy, new technologies and rapidly changing societal norms. Many of the shifts make life better for some and worse for others. Those who understand and plan for the big shifts ahead better than others will win,” says Burns, whose research also contributed to a report from the Urban Land Institute (ULI), Demographic Strategies for Real Estate. From the growth of suburban communities that combine the most-desired features of urban settings with a small-town vibe, to the rise in demand for rentals, many of the trends Burns foresees are already at play, while others are just beginning to gain momentum.

For the last 12 months or more, Burns, CEO of an eponymous real estate consulting firm, and Chris Porter, his co-author and the firm’s chief demographer, have been on the road speaking at dozens of events including ULI conferences, spreading what could be considered the new gospel of generational understanding. The duo initially laid out their findings in Big Shifts Ahead, which was published a year ago.

Traditional demographic categories span an entire generation, a period that can be as long as 20 years or more.

However, such groupings do not always accurately reflect the behavior and attitudes across the entire spectrum of ages in a generation, as happened with a number of projections of Millennial behavior regarding homeownership and real estate. Burns points out that a 17-year-old high school senior has little in common with a 33-year-old father, even though by traditional classifications both are considered Millennials. Instead of continuing their early pattern of gravitating only to urban centers, as Millennials age, marry and have children, they are moving to more suburban settings.

Consider Gen X born from 1965 to 1983. In 2015, this group was 32 to 50 years old. Burns says the early members of Gen X purchased homes in the 1990s, while later members purchased in the mid-2000s and suffered more foreclosures than any other group through the Great Recession.

Instead of broad categories spanning an entire generation, Burns groups the U.S. population by decade born and profiles how the behavior of each cohort changes over time in response to outside forces. There is a surprising consistency to this method since the number of people born during each decade ranges from 40 million to 44 million. Even though population growth slowed by 8 million in the late 1960s and early 1970s, immigration compensated for the shortfall.

Burns points to four disruptors that impact behavior of those in every decade. In a presentation to planners and developers at ULI’s fall conference in Los Angeles, he characterized them as government policy, economic cycles, new technologies and societal shifts. For example, evolving societal attitudes have influenced each decade in different ways. Attitudes regarding women working and toward parenting changed and then changed again. The number of stay-at-home moms plummeted from 44 percent in 1974 to 23 percent in 2000. Those born in the 1970s, a group Burns calls Balancers, then reversed this trend. They also led a number of other societal shifts after 2001. Among this group, 23 percent were born in another country. Also changing are attitudes toward men’s involvement with child rearing with more fathers staying home today.

The economy affects jobs and the ability to buy a home, but a good or bad economy also leaves a deeper imprint. Burns says the growth of the economy during childhood and early adulthood determines lifetime spending habits. Net worth varies by decade. The group born in the 1950s is heading into retirement with $18 trillion, the most of any generation, according to Burns, who dubs this group the Innovators, because they led a technology revolution and started new companies at a pace that is still not matched, boosting productivity and longevity.

From mass production of cars to medical innovation to smartphones, technology also shapes generations, playing into where they live, the size of families, and the ways in which they connect with others. He calls those born in the 1990s the Connectors since they led 24/7 wireless connectivity.

At every level — federal, state, local — government has and continues to influence trends related to development and housing. After World War II, the GI Bill encouraged homeownership, and the federal push to develop interstate highways spurred suburban development. State tax and development policies to some extent determine where people live. In recent years, low state taxes have been one of several catalysts shifting the population toward the south. “Approximately 42 percent of America lives in Southern states, but 60 percent of the growth is going on there,” observes Burns.

This year, changes in federal tax law are eliciting greater scrutiny on ways in which policy changes might affect why and where people relocate, decisions on where to retire as well second and primary home purchases.

Since the recession, the level of homeownership has fallen, and Burns forecasts the rate of homeownership will fall to 60.8 percent by 2025, noting that anecdotal feedback suggests the homeownership decline could go even lower. He cites several patterns that will continue to put a damper on home buying. One he likens to a return to a version of boarding houses at the turn of the 20th century. 

“Inspired by Airbnb, a number of homeowners have told me they are bringing unrelated housemates as a source of income and not just for short-term stays. Homeowners and renters are meeting online. Mature homeowners need the income, and young adults need lower rent. While this is a great market-based solution to an affordable housing pattern, it has slowed household formations.”

More people —  not just potential first-time buyers —  are renting. Approximately 12 percent of Americans now rent a home, which Burns says is a “game changer.” Another shift, “renting from older Americans has surged in the last 12 years.”

Some want to try out a new location or environment; others need the cash. Some don’t use the mortgage interest deduction.

Also making renting an appealing option is the change in what’s available for rent. Many new multifamily buildings are more upscale with high-end finishes and a range of amenities. A cadre of new companies focus on creating newly constructed single-family homes specifically for the rental market, and it’s turning into a profitable business. Burns says, “several companies have shared that the yields in some markets are excellent. These builders and operators tend to have a long-term view toward building a steady, asset-based cash flow stream.”

Most experts anticipate that autonomous driving (driverless cars) will change where people live, and planners are already taking this into account. Some speculate that suburbs located farther from urban centers and jobs, which are typically more affordable, may be in demand again as commute time can be better utilized. Burns also suggests driverless cars will change attitudes regarding aging in place. He expects demand for assisted living centers will grow less than people think. Already, builders report an uptick in the number of individuals investing in renovations, so they can stay in their homes as they age.

The amenities that create status are being revised. Says Burns, “Experiences are the new brag,” which means a home’s walkability score or locations near activities might create value. “The best house is more likely to be near great things to do rather than a large home with a large yard,” he adds.

In terms of the long-term impact of some changes, Burns still has a lot of questions. For example, women now earn 58 percent of college degrees, compared to only 42 percent of degrees in 1972 when Title IX was passed. “Both men and women have a difficult time making sense of how this will change society,” he says.

If you are not familiar with the term surban™, it might be time to add it to your real estate vocabulary. Burns trademarked the term, and it is popping up in a number of conversations in the industry. Surban refers new areas that mix urban and suburban, often offering smaller homes with little or no yards in high population areas. Entertainment, restaurants, shopping are all nearby and walkable.

Expect to see more development shift toward the suburbs, including surban areas. Burns projects the suburbs will capture 79 percent of household growth over the next 10 years and urban growth to capture 15 percent.

The impact of the Connectors and Globals is yet to be realized, and it will be interesting to see the changes they bring to the way we live.

Photos courtesy of iStockPhoto.com

Leave a comment

Out of Orbit: Agents Aim High Pricing Ultra-Luxury Homes

with:

As the numbers climb into uncharted territory, one word emerges characterizing prices and properties at the pinnacle of residential real estate. “It’s a whole new stratosphere,” says Zachery Wright, executive director, Asia Pacific & Western North America for Christie’s International Real Estate.

 

By Camilla McLaughlin

Not too long ago, the possibility of even a $200 million home seemed outrageous. Today the most expensive home for sale in the U.S., dubbed The One, is more than twice that amount. Also off the charts is a square footage almost double that of the White House.

 

When the first issue of Ultimate Homes debuted in 2005, the most expensive residential property in the U.S. was $75 million. Today, $100 million doesn’t come close to the top 10 for Ultimate. Five properties are priced at $200 million and above, and anything below $138.8 million doesn’t make the cut. More than 50 are above $60 million. “Because we’ve seen so much wealth creation, these numbers don’t frighten many in the ultra world,” says Wright.

 

“It’s no surprise we are seeing such stratospheric prices today, because worldwide personal wealth is the highest it has ever been. Consider that the world’s population of $10 million-plus households is growing, and fast,” says Stephanie Anton, president of Luxury Portfolio International. More than 1.6 million households claimed a net worth of more than $10 million in 2016, a 91-percent increase since 2010. “If many of the properties on today’s list had come on the market even five years ago, it’s unlikely they would have been priced where they are today,” says Wright.

 

For potential buyers, lifestyle often justifies cost. “People will pay any price if it’s a prudent purchase. But getting there is a real shock. It takes a little while to figure out what things are worth,” says Gary Gold, executive director of Beverly Hills brokerage Hilton & Hyland. “There are very few people out there making sucker purchases. I don’t care how rich you are, very few want to be a chump.”

 

For most, getting to the $100 million level is a process that usually begins with a much less costly goal. Often, Gold says, buyers start in the $20-, $30- or $40 million range and discover those homes won’t meet their requirements. “They all buy what they want, the best thing available for their needs. In one of our big sales, the people were originally looking for an $8- or $9 million home. They ended up paying $85 million.”

2018 TOP 10:

1. $500 million
The One
Bel Air, California

6. $188 million
Billionaire
Bel Air, California
2. $250 Million
Chartwell
Bel Air, California

7. $175 million
Jule Pond
Southampton, New York
3. $250 million
220 Central Park South Penthouse
New York, New York

8. $150 million
Meadow Lane Oceanfront
Southampton, New York
4. $250 million
Mesa Vista Ranch
Pampa, Texas

9. $149 million
West Creek Ranch
Gateway, Colorado
5. $200 million
The Manor
Holmby Hills, California

10. $138.8 million
Gemini
Manalapan, Florida

 

Prices might be stratospheric, but what matters is often the same as it is for luxury buyers overall. “When they buy a house, they want to feel like they made a smart purchase, whether it’s a great buy or that they beat out somebody else. They want to make an intelligent purchase,” Gold explains.

 

The argument most often ventured by developers and brokers to justify heady prices is a comparison to the art world. Bruce Makowsky, developer of Billionaire — which at $188 million is No. 6 on our list — takes the analogy to the next level using mega-yachts as a measure. “If these guys are willing to pay hundreds of millions for a yacht that is a depreciating asset they use for four weeks out of the year, what would they be willing to spend for a land yacht?” he hypothesized.

 

Rayni Williams, also with Hilton & Hyland, is part of the team listing Billionaire. She says the land yacht comparison is appropriate. New mega spec homes are a complete package, taking the idea of turnkey to a new plane by including almost everything someone could want, and then some.

 

Billionaire is completely furnished, staffed and decked out with unparalleled amenities and features including more than 100 curated art installations, two stocked wine cellars, and a $30 million collection of cars in a custom display gallery along with a helicopter pad and one of very few residential theaters outfitted with Dolby Atmos.

 

“Spec homes are no longer developed with the intention of appealing to an entire market. With a specific luxury buyer in mind, developers are taking custom building to new heights with over-the-top features — and they’re in demand,” explains Jeff Hyland, president of Hilton & Hyland.

 

When owners of these homes come to Los Angeles, Williams says, “They want the ultimate entertaining home. They want to have parties for families and children alike. They want to have enough of the stage setting where they can have live bands…. They want that kind of space. They want a spa. If they want Botox, they don’t want to go to Beverly Hills to their doctor, they want their doctor to come to them.”

 

Days before this article went to press, a compound on Carbon Beach in Malibu sold for $110 million, setting a record for L.A. residential properties. The property wasn’t on the market — officially or unofficially — which in the ultra-world is not unusual. “When you have a highly qualified buyer, you tend to knock on doors, whether the house is for sale or not,” says Joyce Rey, executive director Coldwell Banker Global Luxury, whose sales over the years have established price benchmarks for the L.A. market. She says this recent sale is “a good indication of the strength of the luxury market in L.A.”

 

Another descriptor frequently applied to ultra prices is aspirational. Even though these properties do sell, eventual prices are often substantially less than the initial offering. Still, they set new benchmarks. In recent years, transactions shattering price thresholds include a $147 million East Hampton estate and Copper Beech, a $120 million waterfront property in Greenwich that sold in 2014. In L.A., the $100 million threshold was breached in 2016 with the sale of the former Playboy mansion.

 

“The sky is the limit. Once we hit the $100 million mark, we broke the glass ceiling — and we’re seeing home buyers comfortable with spending more than that,” says Rick Hilton, chairman and cofounder of Hilton & Hyland.

 

Continuing this year is a subtle geographic tilt toward California and Los Angeles. “People are showing a willingness to spend in the West. We’ve certainly got global wealth in New York. I think we’ve got a stronger market right now than they do in New York. Anyone who is making a lifestyle decision is going to be looking at Southern California,” says Wright.

 

Ultra properties built on speculation get the most media attention (who can resist writing about a candy wall or jellyfish room, one of the amenities of The One), but what sells depends on availability and the mix of buyers at a given time. “There happens to be a lot of spec homes out there at the moment. People are building these amazing houses, so they happen to be available. And they’re trading. These houses weren’t available in 2016 to the same degree,” says Gold.

 

Still, land and location convey the most value and the top 10 always reflect a mix of locations and property types. Gemini in Manalapan, Florida, extends from the ocean to the Intracoastal Waterway. Chartwell in Bel Air is a legendary estate with historical ties. Built in 1933 by architect Sumner Spaulding and restored by Henri Samuel, whose work includes estates owned by the Vanderbilts and the Rothschilds, Chartwell occupies 10.3 acres and is often described as the “the crown jewel of Bel Air.”

Views top the list of ultra attributes buyers consider most essential. Chartwell offers sweeping panoramas of the Pacific and downtown L.A., as do others including The One and Billionaire. 

In New York City, dynamic views are part of the value equation for ultra properties. This year, only one Manhattan property finds a place among the top. Occupying four floors in the Robert Stern-designed 220 Central Park South, the residence easily could be considered the Ultimate penthouse. The $250 million price is a record for Manhattan and few other residences have been as large.

 

Property sizes range from just over an acre to 65,000 acres on Mesa Vista ranch in the northeast corner of the Texas panhandles. Like many Ultimate properties over the years, this ranch has been a labor of love, husbanded over most of a lifetime. “When I began assembling the ranch 46 years ago, I initiated a multi-decade program to help the land heal and over time invested millions on wildlife management,” explains owner T. Boone Pickens. Improvements also included 20 lakes over the course of 20 miles. In addition to a 12,000-square-foot main lodge, the property includes a 33,000-square-foot lodge and several other houses, plus housing for staff. The chapel, a site for both weddings and funerals, is stunning, and a 6,000-foot runway and hangar facilitate getting there. The ranch is priced at $250 million and, according to Pickens, much of the proceeds from the sale will be directed to his foundation. The property is offered jointly by Hall and Hall, and Chas. S. Middleton and Son.

 

A 60-acre estate in Bridgehampton, once placed at the top of the first Ultimate list, and one-of-a-kind properties continue to be a Hamptons’ hallmark. In 2014, an 18-acre property in East Hampton sold for $147 million, setting a record for the U.S. Many of these properties offer what many consider an idyllic mix — classic estate homes and a substantial amount of land, including frontage on the ocean or a pond and the provenance. The setting for Meadow Lane in Southampton, listed by Harald Grant with Sotheby’s International, is considered a trophy location. It offers 360-degree views and extensive frontage on the Atlantic across three lots, as well as an additional bay-front lot.

 

Commissioned and owned by the Ford family, Jule Pond offers the largest ocean frontage in the Hamptons with nearly a quarter of a mile on the water. Listed at $175 million, it is the most expensive property for sale in the Hamptons and No. 7 on our list. A complete renovation in 2008 preserved many original features, including molded ceilings with traditional chandeliers, Italian marble fireplaces, French parquet floors and antique bathroom fixtures.

 

Referring to the mix of the top 10, Rey says, “I think it speaks to a variety of interests. Some people are attracted to land. Some people are attracted to architecture. Some are attracted to views.”

 

As always, the question hovering over the market remains what will sell next and what will be the next stratospheric price?

. . .

Where are they now? 
A look at what happened to the top of last year’s Ultimate Homes list.

2017

$250 million
Billionaire
Bel Air, California		 2018

Price decreased
to $188 Million.
Now No. 6. 
$200 million
The Manor
Holmby Hills, California		 No change.
Now No. 5.
$195 million
Gemini
Manalapan, Florida		 Price decreased
to $138.8 Million.
Now No. 10.
$175 million
Great Island
Darien, Connecticut		 Off the Market.
$145 million
La Dune
Southampton, New York		 Off the Market.
$140 million
Briar Patch
East Hampton, New York		 Off the Market.
$137 million
Il Palmetto
Palm Beach, Florida		 Off the Market.
$129 million
Palazzo di Amore
Beverly Hills, California		 No change.
Now No. 12.
$110 million
The Pinnacle Penthouse
New York, New York		 No change.
Now No. 13 (tied).
$100 million
Murray Compound Estate
Southampton, New York		 No change.
Now No. 15.

This article orginally apeared in the

Ultimate 2018 edition of Unique Homes. 

Comments Off on Out of Orbit: Agents Aim High Pricing Ultra-Luxury Homes

French Romance: 33-Acre Estate Inspired by France

with:

Few estates can be considered a work of art, but arrive at the property featured on our cover and you find it takes a moment to take it all in. Ducks paddle in front of an antique millhouse next to a quarter-acre pond. Vine-covered bridges and stone paths twine among four cascading ponds. The setting is as idyllic as Monet’s gardens that inspired the landscape.

 

No matter where you are on this property, you are surrounded by beauty, along with blue skies and rolling mountain panoramas that comprise 360-degree views. Finding an estate so meticulously orchestrated is rare; even the hues of the roofs merge into a larger palette.

 

Inspired by the French Romantic period, the main house was completely reimagined three years ago when additional parcels were also acquired to transform the entire property into an ultra-private, 33-acre compound. Every finish is exquisite, superbly paired with the setting and endowing each space with a vibrant but balanced aesthetic. Even the kitchen, designed to evoke a French bistro and backed by professional chef’s kitchen, reflects the design inspiration, as do the parterre gardens and formal landscaping.

 

“What is especially remarkable about this property is everything you might not notice initially,” says Jordan Cohen, estate director for RE/MAX Olson and Associates in Westlake Village, who is the No. 1 RE/MAX agent in the U.S. The interplay between buildings and the land is dynamic but subtle. Off to one side lies an organic farm and orchard. From the main house, gardens and one of the two pools stretch out toward distant views. A pool house becomes the setting for an extensive spa including a Himalayan salt room. A second pool is adjacent to the 11,000-square-foot guest house.

 

Privacy and infrastructure were prime objectives in the creation of this property. The guard-gated entry road is part of the property and completely secure. A sagacious purchase of water rights, almost priceless in California, resulted in two municipal-quality 1,000-foot wells on the property. When viewed from the perspective of art, the $85 million offering price might be considered a bargain for a masterpiece of this magnitude. — Camilla McLaughlin

 

Photo courtesy of RE/MAX

This article orginally apeared in the

Ultimate 2018 edition of Unique Homes. 

Comments Off on French Romance: 33-Acre Estate Inspired by France

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

with:

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

This article orginally apeared in the

Ultimate 2018 edition of Unique Homes. 

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

Bahamas international sporting club encompasses paradise

with:

By  

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

THIS STORY WAS FEATURED IN OUR SPRING 2018 ISSUE.

CLICK HERE FOR THE FULL DIGITAL VERSION.

Leave a comment