Real Estate Consultant · Bowie, MD · Member since 2008 · 27 posts · 0 votes
As you may already know, the luxury home market isn't as greatly effected with the sub-prime mortgage meltdown, as most of the buyers of luxury homes have the necessary capital to purchase.
In addition, with the strength of the euro and the pound against the US dollar, now is a great time for the British and others from abroad to invest in US luxury homes.
There are many other reasons to explore opportunities in this market too! I'm looking to work with others who have the desire to learn and will pay it forward. I'd love to hear some thoughts on this and see what we can do together.
I'm expecting success and looking forward to meeting you! :roll:
Rental Property Investor · Lisbon, CT · Member since 2008 · 120 posts · 29 votes
18y
Forgive any ignorance.... :oops:
Is this a niche market? I'm assuming a small percentage of the population owns luxury homes? Wouldn't the volume of sales be lower? Although I'd assume the returns would be higher...
EDIT
Although... you may be in a market where homes are more affordable; in my area middle class families own 350k 3bed homes and luxury means 5bed 3bath at around 500k to 1mil.
Attorney · Washington, DC · Member since 2008 · 99 posts · 2 votes
18y
I wouldn't say the high end market isn't effected, at least in my area it has been. Everything has slowed down. I don't see a huge drop off in price here except where people got in over their heads. I usually only build houses $1M plus which isn't considered real high end in the areas I've been building and they are still moving but much slower than they were two years ago. I got lucky as I was plenty busy with work for clients and did not get stuck with any property that I had to move in this down market. I'm looking now to take advantage of others mistakes and pick up a couple of properties while the getting is good. In my area I just think it's important to buy in markets that have been historically strong and stable and things will get better this year. Really high end stuff doesn't be seeming to move at all lately. My old employer has been sitting on atleast 3 finished houses listed for over $5M for about 3 years. When I worked there we rarely had a house finished before it was sold. Just shows you that this slow down has effected all aspects of the housing market.
Real Estate Consultant · Bowie, MD · Member since 2008 · 27 posts · 0 votes
18y
Every market has felt the change to some extent. The higher end luxury homes aren't moving as quickly because there are so many other, new homes on the market that are big and luxurious, but not AS expensive, and builders are giving all kinds of incentives to buy, including discounts.
Still there are players, both investors and end-buyers who purchase no matter what and are doing so right now. It is important to connect with the right people and give something of value.
And yes... this would be considered a niche. Everyone should have an area that they feel most comfortable in or that they are most educated in, although you can work them all if that is your desire.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
Funny - I'm working 2 seperate markets right now - rental property where the banks got screwed by the subprime default and I'm getting them for pennies.....and beachfront mansions in Belize. Two ends of the spectrum here that's for sure. I haven't got a close in Belize yet - buncha leads. Working on it though - wouldn't mind picking up some euros outside the US and keeping it outside the US tax system. :-)
Residential Real Estate Broker · Aspen, CO · Member since 2008 · 155 posts · 4 votes
18y
The high end second home market is somewhat shielded from the trouble. People always had to put more down (20%) and people that are in the second home market are at least moderately successful to even be thinking about a vacation property.
I think in a moderate economic down turn, the wealthy will actually diversify out of stocks and into real estate, into markets where they feel their money is safe.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
Toby - I saw that from an Italian friend who lives in New Zealand and bought a Chateau in Aspen. Bought it at about 40% FMV and with the currency conversion, she made a killing on it. The US economy may be screwed temporarily, but apparently international investors are smelling a rebound coming.
Investor · DFW, TX · Member since 2008 · 66 posts · 2 votes
18y
In Dallas there is a lot of speculation whether their new development project to make the Trinity River kind of like the Riverwalk in San Antonio will increase local market values. I've been thinking maybe I should get in the game with luxury townhomes and even commercial property.
There is a lot more risk involved than I am normally used to. The market around there right now is really depressed, almost ghetto-like. If one had the money to play with, however, it could be something really big.
Residential Real Estate Broker · Aspen, CO · Member since 2008 · 155 posts · 4 votes
18y
Tim,
if FMV is fair market value then I have to strongly disagree. The Aspen market has never seen a down market and the last stable period after 2001 is now 7 years back. It is hard to buy things at 100% fair market value in Aspen, let alone below that.
Chateaus are not very common around here even though we have as few condominium developments that are called Chateau Aspen, Chateau Chaumont, Chateau Dumont etc...
We are indeed seeing more and more international investors. So far mostly British and latin american buyers. A few eastern European sprinkled in with the odd German etc.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
18y
Toby,
I understand your position as a realtor looking at mls properties but we're talking about a piece of property well beyond the means of most people. She didn't get this through a realtor. A porn film producer was going through a divorce and she knew a contact through the bank who knew she had the cash to get it done.
The truly wealthy aren't much affected by th economic troubles of us peons.
The people who are paying 10 million dollars for a house aren't worried about ARMS adjusting.
However, nobody gets rich by squandering their money, and people with money are value shoppers. They won't pay 10 million for just any fancy big house.
I would say the really expensive real estate is going to do just fine in really desirable areas to live or vacation.
Real Estate Investor · Baroda, MI · Member since 2008 · 204 posts · 2 votes
18y
our luxury home market is suffering quite a bit. million$ + homes are sitting for years when they used to sit for days.
Many of the builders that have started buildng the luxury homes are just getting the shell of the home built until it sells and those are sitting even longer.