North America’s Luxury Home Market Is Booming

As the economy recovers, luxury properties are very much in demand, particularly in large urban areas. Homes or vacation properties worth $1 million or more are selling quickly, often at or just below asking prices. And they’re taking the housing markets in many areas along with them.

It’s been a long haul. While in the largest North American cities the luxury market never totally disappeared, during the worst of the recession many buyers were holding on to their properties. The result has been a shortage of inventory, which is pushing prices up. As of mid-October, the S&P/Case-Schiller home price index showed major growth in the average sales price of homes across the U.S.

Foreign investors have also been spurring on the market for luxury properties, as Asian buyers, in particular, look to North America to invest: Many are putting their money into the real estate market.

As noted, luxury buyers usually look to large urban areas to purchase homes, while those looking for a getaway often look north to cottage country, or south to warmer climes. Areas located near big cities offer the best of two worlds: These neighborhoods provide easy access to transit and highways for commuters and nearby shopping, restaurants, and entertainment venues, as well as good schools, safe communities, park-like settings, and elegant homes.

According to recent research, upscale purchasers still believe home ownership is a great investment. So luxury homebuyers are prepared to spend time, money, and energy on a house that reflects who they are.

While size matters, it’s increasingly less important than upgrades and amenities such as larger lots, pools, and high-end landscaping. Outdoor living rooms, chef’s kitchens, spa bathrooms, and spacious garages are also important. As owners renovate and re-build, the economy receives a boost. Small wonder the luxury market has a stimulating effect on real estate markets and the economy in general.

The Internet Age Open House: Has it Become Irrelevant?

In the old days, sellers could rely on open houses to give their properties wide exposure to potential buyers.

But now, thanks to the Internet, the traditional open house is starting to feel old hat.

The vast majority of buyers now dip their toes into the housing market online. They can easily narrow their choices through websites with vast databases of local properties for sale.

From there, most buyers turn to real estate agents with the expertise, local knowledge, and access to statistics, to hone in on a few special properties. They might attend an open house, but most prefer individual tours from their agents.

Meanwhile, sellers hope for the kind of response to their open houses that their parents might have received. They’re usually disappointed.

These days, sellers are under competitive pressure to stage their properties before open houses. What began as a way to differentiate one property from the rest is now almost mandatory in some neighborhoods. The cost: upwards of $2,000.

For pictures, videos, and personal tours of your home, staging may pay off in faster sales and higher asking prices, but don’t count on the staged open house to generate offers. These days, you’ll get more browsers than qualified buyers.

And don’t hold multiple open houses. Hosting several open houses says “desperation” to buyers and may encourage lowball offers. Hold one if you wish, and if your agent recommends it. But don’t expect it to be your parent’s open house.

How to Handle Multiple Offer Situations

When selling your home, having more than one offer to consider is a great position to be in. However, there are some rules of thumb for handling the sale of your property in a multiple-offer situation.

The most important is to evaluate every offer for its details – not just the price. Study all conditions and investigate thoroughly the strength of each offer. Just because the buyer has agreed to pay a certain amount for your home doesn’t necessarily mean he or she is capable of bringing about a successful closing.

Evaluate their pre-approval letter as well as the lender itself. You should be particularly suspicious of all-cash offers. What’s too good to be true, often is.

In evaluating offers, your listing agent will prove an invaluable support. He or she will do the legwork required to consider each offer and check out the buyers and buyer agents. Do ask your agent for input and opinions. However, in the final analysis, you are the decision-maker.

You’re more likely to attract multiple offers and save yourself headaches if you order your own property inspection before you put your house on the market. Feigned ignorance of the condition of your home risks an eventual lawsuit or costly work orders. If it’s bad news, you’ll have the choice of making repairs or reducing your asking price.

It also means fewer complications with negotiations and closing.
Negotiations are particularly difficult in multiple offer situations – not so much for the seller, but for the buyers. Hopefully, you and your listing agent will treat offers with respect. The seller pretty much dictates the way offers are presented, and making buyers jump through hoops – especially if their offer comes in well below the others – won’t benefit anyone. Let them know there are several better offers, so if they can’t increase theirs, they can exit gracefully.

Make Your Neighborhood Everything it Can be

Our neighborhoods are where we spend a majority of our time and where our kids first learn about the outside world. So, isn’t it important to make them everything they can be?

A lot has been written about improving neighborhoods – a recent Google search yielded almost 13 million hits – so there’s no shortage of research material. Here are some ways you can change your little part of the world.

Get involved in town/city government

Municipal government meetings aren’t exciting, but these meetings are where you get information and a say on issues and initiatives. Some large cities have begun to stream their city council meetings online (and many others televise the proceedings), so you can keep yourself informed. Staying up on the issues in your community will help steer you to a cause or initiative you can get into.

Clean up

A clean neighborhood is not just more attractive, it’s generally safer. It becomes a better place for your kids to play and offers others (including potential buyers) a good image of the community. Start with your own backyard (and front yard), then get neighbors together one day a month to clean up public areas. And pick up litter everywhere, not just on your own property.

Attend Community Events

Attending community festivals, block parties and barbeques makes friends of neighbors, and strengthens community bonds. If this isn’t happening, take the initiative yourself and throw a barbeque or party. Others will inevitably follow.

Take time to enjoy your neighborhood

Visit the local grocery story, coffee shop, farmers’ market and library. Explore your neighborhood, jog its streets, and encourage your neighbors to do the same by learning from other communities. For example, more than 100 cities across the world have joined the League of Slow Cities, predicated on the idea that savoring your surroundings (just like savoring your food) contributes to a meaningful life.

Young Buyers are Driving the Luxury Real Estate Market

Generation Ys, who have always fancied the finer things in life, are bringing this mentality to the real estate market by rapidly acquiring high-priced real estate. And they are not stopping at one purchase; this generation is more likely to buy several properties as investments.

So what’s behind this trend? It comes down to economics. The low interest rates and lower real estate prices of recent years have made it easier for Gen Ys (now in their 20s and 30s) to extend their love of luxury into the real estate market. Not for them the starter bungalow of their grandparents’ generation. This group brings the same enthusiasm they have for designer duds to million-dollar condos.

We also have the tech boom to thank. Many young tech titans have become wealthy, now owning stock in various technology companies. With extra cash and high-powered jobs, many are seeking to diversify their portfolio. And how better than by purchasing REAL real estate?

Finally, social media has helped developers and brokers promote their products to this highly tech-savvy generation of buyers. One new condo development in Manhattan reached out through Instagram, the photo-sharing website. When it hit the market, the 24-unit development sold out within a month.

Gen Ys know what they like and have what it takes to get it. And as a result, they’re shaping the real estate industry now and into the future.

Buying or Remodeling: Advice is Just a Click Away

North Americans love their toys, and we’re turning to our devices for advice on everything from remodeling projects to home searches. According to a joint study by Google and the National Association of Realtors, real estate searches on have increased by 253 percent in the past four years.

“Increasingly, online technologies are driving offline behaviors,” noted Patrick Grandinetti, head of real estate for Google, “and homebuying is no exception.”

Buyers screen homes on the Internet

The study indicated that nine out of ten home buyers turned to the Internet during their home search. Although half launched their search online, they quickly moved offline; 76 percent viewed or drove by a home they’d first seen on the Internet.

The real estate industry is very much on side. For players, it’s all about providing buyers with new tools to access property and neighborhood information, and rather than discouraging personal interface between buyer and real estate agent, most purchasers still seek out agents for their experience and expertise; interestingly, almost one-third found their agent online.

“See” your planned renovation online

It doesn’t stop there. Recently, there’s been a boom in remodeling projects, and, of course, there’s an app for that. Homeowners contemplating a renovation have turned to the Internet for advice for several years. But new approaches by sites such as Zillow Digs and Houzz are changing the dynamics. Both offer platforms for consumers, design professionals, product manufacturers, and architects to interact as part of a visually-focused online community. You can share photos of products or designs with your architect or contractor or “meet” with the designer online and book your re-build right then and there. As one consumer, whose remodeled kitchen was designed by an architect she met on Houzz, notes: “It’s positively addictive.”

Google’s Grandinetti would likely agree. For him and other experts, it’s just another example of online technology driving offline behavior.

How to Buy Your Dream Home Even if It’s Not For Sale

Have you ever driven through a new neighborhood only to turn the corner, and there it is…your dream home?

But, darn your luck, this dream home isn’t for sale. While the majority of us drive away, saddened, some people leave determined to make this home theirs – whether it’s for sale now or not.

And often, with the help of a great agent, they’ll do just that.

For real estate agents, it’s a form of cold calling: The clients point out an unlisted home they love, and the agent plays matchmaker, contacting the homeowners to see if they’re prepared to sell.

Some homeowners won’t budge, but for others, there may be incentive to sell. They may have considered selling but haven’t started the process. The house may have been on the market previously. Or, maybe the owner decides to jump at the opportunity.

If you’re interested in a property that isn’t for sale, here are some strategies:

  • Research both the property and its owner; public records or old real estate listings can give you an idea of value.
  • If you decide you’re serious about approaching the owner, your best bet is to ask your agent to do so on your behalf. It will show the owner you’re seriously interested. Consider sending or having your agent give the owner a handwritten letter, expressing why you’re interested. It will help personalize the process.
  • Be aware that you’ll likely end up paying a premium for a house that isn’t officially for sale.

The Growing Trend to Micro Mini Housing

Shrinking homes are a growing trend. More and more people are choosing to live in tiny houses – homes that are often less than 500 square feet.

Perhaps the state of North American real estate markets has something to do with it: In the US, the grueling past few years have left big homes empty and their owners underwater.

People are looking for ways to save on their home ownerships costs, and for some, tiny homes are the way to go.

Factors driving the tiny house craze

Actually, there are all sorts of factors at work driving the micro-mini home craze. Economically, little homes can make sense. They can cost less to maintain; they can cost less to furnish; they probably have lower heating costs; and there is choice galore for those at the leading edge of the small-is-beautiful movement.

Mobile minis, which are on wheels, are designed to be fitted with solar panels and other green technology options.

Some companies sell do-it-yourself (DIY) plans for tiny homes, but people can also purchase pre-built homes that can be delivered straight to their plots of land.

There are also workshops available to aficionados on topics ranging from DIY construction to finding small-scale furniture for your small home.

As well, some of the micro-mini homes are designed to be added to, so if the lot will accommodate it and authorities approve, your tiny house can grow.

If a bigger small home isn’t in your plans, perhaps you and your house can be part of a larger community; several tiny housing blogs discuss building communities of small homes.

Generally speaking, owners of tiny homes are singles or couples who are younger, on average, and may work in creative professions. However, anyone can be part of this growing trend. And it just may be a trend whose time has come.

Is it all in a Name? Ask Residents of Country Club Drive

Residents of Wisteria Lane, USA might have found their property values rising during the long run of the Desperate Housewives TV series, but they’ve got nothing on the people who live on Country Club Drive.

According to a University of Georgia study, the value of homes with “country” in their addresses is 4.2 percent greater than similar properties located on streets that aren’t “countrified”. As for those lucky people on Country Club Drive, this posh address increases the value of their homes by 9.3 percent.

As reported in the Wall Street Journal’s blog, Developments, the study found that Country Club Drive sounded prestigious to those looking to impress: Unlike the intersection of Lonesome and Hardup Roads, as WSJ writer Robbie Whelan points out.

But it’s not necessarily all in a name.

As listing site Point2Homes suggests, it’s also the ad listings that draw buyers to your Open House. A fancy address obviously helps, but so do the descriptors “exquisite,” and “private” when applied to luxury properties – those listed for $5 million or more.

For the rest of us, there’s always the “dream home,” which comes sixth in a list of top 100 home descriptors developed by Point2Homes in its scan of 300,000 US homes. And, of course, features such as hardwood floors and stainless steel appliances.

So, for those looking for the perfect home, scan the ads for stainless steel appliances, granite countertops and spa bathrooms. But if it happens to be located on Country Club Drive, so much the better.

Which Comes First … the Buy or the Sell?

When a hermit crab decides it’s time for a new home, it scopes out a new shell before vacating its current accommodation.

But for homeowners, the process is not so easy.

Whether you buy a new home before selling your current one – or the other way around – the choice of what to do first comes down to which option makes you the most comfortable.

Both have pros and cons, and here are some to consider:

Sell first

  • When you know what your current home has sold for you can zero in on exactly what you can afford in your next one.
  • Because you already know the conditions of your own home’s sale, such as the closing date, you can make informed offers.
  • The downside: If you can’t get possession of your new house before leaving your current one, or even worse, can’t find what you’re looking for, you’ll need temporary housing. Can you afford a short-term rental, and what will you do with your furniture while you’re waiting?

Buy first

  • If you’ve found a home with unbelievable features in a great neighborhood at an awesome price, the pressure is on. You really want this dream home, so in this case, you may have to buy before selling.
  • If the local real estate market is hot, you might feel safer buying first.
  • It’s probably a safe bet your home will sell fast, unless it’s out of step with its neighbors; if it’s a fixer, or if it’s the best home in the neighborhood, it may languish or sell below asking

  • The downside: If you buy first and your home does languish, the worst case scenario is you’re stuck with double mortgage payments.

And double stress.

Some families handle risk better than others. What kind and how much depends on your circumstances.

Single-family homes are still much sought after; according to NAR, almost 80% of last year’s buyers purchased a single-family detached home. It appears the American dream isn’t dead; like previous generations, families have and will continue to seek a place of their own.

Bad Neighbors can be Hazardous to Your Property Values

It’s every homeowner’s worst nightmare:

Your new neighbor has decided to tear down the charming colonial and build a monster home. Or he’s turned his backyard into a junkyard. Or she’s having noisy parties.

Yes, having bad neighbors can be awful. And did you know they also can lower the value of your home by up to 10 percent.

A recent study by the US Appraisal Institute indicates that your neighborhood – and your immediate neighbors – can be game-changers when it’s time to sell. You may be looking at a 5-10 percent drop in your home’s value. And a lower selling price.

And it’s not just close neighbors; it’s your street and often your whole neighborhood. Barking dogs, poorly maintained properties, utility towers, and even funeral homes can make your neighborhood less desirable, and your home less saleable.

What can you do? Not much after you’ve bought, although you can approach your neighbor and/or a lawyer to try to stop the offending behavior. But you can practice due diligence before you buy.

Visit your potential neighborhood at night and during the day. Drop by on weekends. Drive around neighboring streets to get a feel for the area. Note the proximity of commercial properties. Chat with the neighbors to find out if you share the same commitment to maintaining your properties. Consider contacting the local police and checking crime stats.

Whether you’re buying for the long term, or may sell in the next few years, checking out your neighbors and the neighborhood only makes sense.

Reports Trace the History of Your Home-To-Be

A house is probably the biggest purchase you’ll make. So finding out all you can about the home-to-be is essential.

It’s all about the history of your home, and several companies have sprung up across North America to enlighten potential buyers as they begin their home search.

These organizations provide inexpensive reports that include a history of the home dating back years.

That means you can find out about additions and repairs through building permits and leaky roofs via insurance claims.

Previous selling prices and even some of the more unsavory aspects of the home, such as a history as a drug lab, are available.

Some firms also will provide names of the companies that made previous additions (such as swimming pools), so you can follow up if you like the workmanship, or if you don’t.

In the U.S., one company offering this service is BuildFax; buyers can obtain a report through their real estate agent. But if you have time and energy, you can also conduct searches yourself; virtually all the information is contained in official records, available to the public at little or no cost.

History reports like these can help potential buyers avoid unpleasant surprises at closing time or later down the road.

A track record of problems might make a house a lot more expensive to insure, but if a potential buyer knows about the issues before purchasing, he or she could decide against buying the home or at the very least will be prepared for the additional costs.

Single-family homes are still much sought after; according to NAR, almost 80% of last year’s buyers purchased a single-family detached home. It appears the American dream isn’t dead; like previous generations, families have and will continue to seek a place of their own.

Bring Home 2013 Design Trends This Spring

Spring has sprung, the grass has riz … I wonder where the plumber is.

This riff on the poem, “Spring in the Bronx,” highlights other rites of the season: renovating and redecorating.

There’s nothing quite like sunlight pouring through our open curtains to inspire us, so every year at this time we start to think about changing our surroundings.

Spring’s latest trends may be just the thing to bring new life to your old home.

And because it’s even more important if you’re thinking about selling, you’ll be pleased to know there are some inexpensive quick fixes to brighten your surroundings.

This year is all about color: Pastels are everywhere (Benjamin Moore’s color of 2013 is called Lemon Sorbet), but so are muted blues, which have been proclaimed the new neutrals.

Pastels are a great way to lighten and brighten without dominating. For the potential seller, an accent wall in soft yellow complements neutrals and won’t turn off buyers.

While summer is still months away, bring the look of the outdoors in now. Let garden furniture assume center stage, and introduce the sunshine with sheer window coverings; it’s the best way to establish a link with nature.

This year, we’re reacting to our high-tech lifestyles by connecting to all things earthy.

A “new” traditional style features classic with a twist, such as a sofa with simple lines upholstered in a strong color.

It’s a sea change from last year’s whimsical folk art and reclaimed furniture look, which nevertheless remains popular this year.

If you need new appliances, there’s a big surprise in store. Black is the new stainless steel, and even white is trending.

Lastly, you can give your home curb appeal with new door hardware in the latest metallics: brass, copper, bronze or gold. Don’t forget to paint the door in one of the new colors. Then sit back and enjoy the compliments.

Gifts First-time Homeowners Will Really Use

Spring is home-buying season, and if you have friends moving into their first home, you know a housewarming gift is in order.

While flowers and candles are lovely, why not pick up something practical, particularly for those first-time homeowners? Read on for ideas that are sure to be appreciated.

Pay a visit to your local bookstore and check out the home improvement shelves. Books on do-it-yourself home projects or a first-time owner’s guide are great options. Alternatively, pick up a beautiful coffee table book on a subject your friends are interested in.

Gift baskets
Don’t pay big bucks for someone else to put one together; get creative and personalize a gift basket yourself. Try items a homeowner would find handy, such as dish towels, hand soap, linen spray, funky paper napkins and monogrammed coffee mugs. Or go with a theme, such as movies: Pick up a few classics on DVD and add some gourmet snacks.

Gift cards
Buy them a gift card for home improvement, decor, gardening or grocery stores. Or give them a break with a restaurant gift certificate or a one-time visit by a cleaning service.

A collection of essential tools is something that every homeowner will need at some point. Buy a basic toolbox and fill it with items such as a hammer, various screwdrivers, pliers, a wrench and a tape measure. Or choose one tool – a drill or a hammer – and buy the best quality item you can afford. Include drill bits or nails. 

Urban or Suburban: What’s a Home Buyer to Do?

Journalist and ecologist Lakis Polycarpou recently penned a Polis blog article titled “Is it Time to Transcend the ‘Urban-Suburban’ Divide?” An admitted city lover, he concluded that suburbia (at least today’s suburbia) isn’t so bad after all.

Then again, a recent article in Atlantic Cities spoke positively of the trend to urbanism, whereby homes in many walkable, centrally located neighborhoods have held or increased their value while that of their suburban cousins declined.

Across North America, experts are predicting a trend toward urban living sparked by immigration, economic factors, the increasing price of gasoline and “most of all” demographics, as the two largest demographic groups – baby boomers and millennials – appear to be driving the urban boom.

Some cities are welcoming the influx and making changes to make city living more appealing, including upgrading infrastructure and transit systems. However, the suburbs are changing, too, morphing from car-friendly cookie-cutter developments that excluded pedestrians and transit riders to today’s suburbs that are anything but.

While many developers haven’t lost their taste for McMansions, some innovative architects are designing smaller homes in town-like settings around greenspace. Targeted to appeal to downsizing boomers and millennials who don’t want the expense or bother of big properties, this new suburbia competes with the “urbs.”

Also competitive, new developments are arranged around golf courses, waterways and community centers – making them more livable. Even the auto is downplayed, thanks to bike paths and trails. Developments also include a mix of housing: Once the preserve of single-family homes, many suburbs now host the fastest-growing segment of the real estate market: multifamily housing.

Something to ponder. But for our confused home buyer, we point to a sentiment expressed recently by one real estate watcher: There’s only one right answer, and it’s whatever is best for you.

Buying With Help: If They Pay, Do They Get a Say?

The high cost of education, poor job prospects and rising prices in many housing markets mean more young prospective home buyers are turning to their families for help to buy their first home.

Traditionally many parents have opted to contribute toward a down payment, but in recent years, that contribution has become bigger and the practice has grown in popularity.

It’s becoming so common that house-and-home channels have a whole show – My House, Your Money – focused on buyers who can afford to buy only with their families’ help.

For the contributors, it’s not as simple as writing a check and waiting for the housewarming party. Now, in time-honored “pay the piper” tradition, many families want a role in the buying process; they attend viewings, push their ideas and even try to hijack the real estate agent/buyer relationship.

The gap between what young buyers want and what families feel the kids need can create a dramatic tug-of-war that makes great fodder for a TV show. Episodes of My House, Your Money show adult children asking their parents to take a step back and parents using their investment as a bargaining chip.

It isn’t always this way: Just because they’re investors doesn’t mean that family members can make the big decisions. As real estate agents who have dealt with these situations point out, most parents want what’s best for their kids, and while it might not be what they would pick, that condo in the sky may be what makes their offspring happy.

Chance of a Lifetime: Tips for First-Time Buyers

While the burst real estate bubble might be bad news for the economy, it could be good news for first-time homebuyers. In fact, now might just be the best buying opportunity of a lifetime. Follow these steps to determine where to begin:

Establish a Realistic Budget. Owning a home involves more costs than meet the eye. In addition to mortgage, taxes and insurance, wise homebuyers set aside a little savings toward maintenance and unexpected emergencies. Remember, you will eventually need to repair or replace many items in the home.

Buy What You Need. While real estate is often considered an excellent investment, it’s important to only purchase as much home as you actually need. Bigger isn’t always better; sometimes it’s simply more expensive. Higher taxes, bigger insurance bills and more maintenance can eat away at even the best budgets. So buy what you need, unless it’s wise for you to…

Plan for Growth. First-time buyers can also be too modest when it comes to purchasing their first homes. If you intend to begin a family, you may quickly outgrow the home. Plan for growth to ensure you will be as happy in the home tomorrow as you are today.

Understand Appreciation. Although you don’t want to base the purchase of your home solely upon appreciation, it’s important to understand how the future value of your home is likely to impact your ability to move up later in life. When the time comes to sell, rent or exchange the current property, a home with long-term appreciation provides greater buying options in the future. Search for neighborhoods expected to rise in value over time.

Work with a Reputable Agent. A great real estate agent or broker is often worth his or her weight in gold, which is why you will typically find that investors would never think of going it alone. Unfortunately, many first-time buyers are under the mistaken impression they can save money by helping the seller eliminate or reduce the commission. Research shows this is rarely the case. Most agents help negotiate a lower sales price and ensure that funding, necessary paperwork and other important legal considerations are all taken care of.

June 2009

Budgeting Basics for First-time Buyers

Buying your first home is a lot of fun but there is more to it than meets the eye when it comes to budgeting.
Most new home owners are financially savvy enough to calculate the mortgage, interest, taxes, and insurance payments; but tend to forget less obvious expenses.

Here to help are a few budgeting basics for first time home buyers.

Moving Expenses: Truck rentals, time off of work and, of course, – gasoline … moving takes money whether you do it yourself or pay others to do it for you so plan accordingly.

Maintenance: From lawn care to fixing a door knob, owning your own home involves maintenance. Few first time home buyers remember the expense of maintaining a yard until the neighbors start giving them dirty looks. Don’t be caught by surprise because this is one area where expenses can add up fast. Set aside funds for a lawn service and pool maintenance, or plan to purchase the tools required to do it yourself, including lawnmowers, garden and hand tools plus other general maintenance items.

Utilities & Communication:  New home buyers are frequently surprised by the cost of utilities since many apartments include basics like cable, trash, or water.  Set aside enough funds for deposits and the first payment for utilities, phone, cable and other necessities. Don’t forget to find out if your cell phone, cable, and other services are available in the new area – otherwise, you may be forced to break a contract to obtain services.