Looking ahead at Luxury and or Rural homes in Georgetown for 2016
Wednesday, 03 February 2016, 12:40:00 PM
This week....one of my absolute favorites!
Luxury Homes and Rural Homes
2016 outlook from a Buyers and a Sellers Perspective
Folks generally think that realtors absolutely drool over $1,000,000 dollar listings. With dollar signs for eyeballs, we would do anything to get a listing in this price range. I will let you all in on a little secret....realtor's love listings...any kind, from vacant land to $4,000,000 estates, but of all of the different varieties of listings there are, the listings for luxury homes are the ones realtors can often lose money on. (Lose money you say!!)
Lose Money I say.
We spend money on every listed property. Staging consultations, photo's, video, high quality Feature Sheets, Web sites, there is a long list of things that a realtor can spend money on to make a listing as attractive as possible to the buying public. At the Luxury end of the market you can imagine that these homes are not quite as easy to sell as say a $400,000 bungalow on Delrex Blvd. There simply are not as many buyers in this market segment. Listings take longer to sell, they are negotiated fiercely, and sellers who are frustrated with the amount of time it can take often place the blame on the Realtor. With a property worth 7 figures, it is tempting for every realtor to do everything that we can to help in the marketing of an expensive home, the best photos, drone video, high value publications for print advertising, the list goes on and on, and after 295 days without a decent offer it is not uncommon for the seller to sit down with the agent and have that talk ;)
I love these listings, yes they carry risk, but I feel that my approach to luxury homes offers me an excellent opportunity to do an outstanding job for my clients. Why do I feel like this end of the market suits me uniquely?
At this price range communication is vital....with sellers, with prospective buyers, an agent who is superior at communicating is going to be more successful.
It is wise to remain calm and trust your plan, having a process - one proven to work, is key. You will get horrible feedback on your price, people will challenge your thinking, and will try to convince you of fictional facts! Trust yourself, the plan and stay even keeled. Your sellers will appreciate your confidence!
Do a ton of research....I love stats, I love math...and I love beautiful homes. All three things make this market a lot of fun for me! My sellers know what is happening, they trust I am working non-stop to ensure their home is positioned where it needs to be in order to get a fair deal for them.
What is ahead in 2016 for this category of homes....homes worth at least $750,000 and with no upper limit.
From a Sellers perspective:
I have a very strong sense that the market for this category of homes is getting stronger, there is a number of reasons for this...let me highlight a few:
The volume of trades in this price range, we had 155 trades at $750,000 or higher in 2015. Up from just 91 in 2014. Part of that is the average price is getting higher and so we will see more houses at $730,000 last year hit this category this year, but we are up 70%
Why so many more trades? For 5-6 years the banks were warning of a steep correction in prices, that interest rates would be going up, that the market was too hot....and when this is all you hear about, the people who buy these homes wait for it before spending $1,000,0000. After 4-5 years of it. they now just no longer believe it. We don't hear about steep corrections, or rapid interest rises....we are hearing soft landing.....need to keep interest rates low until jobs recovery is solid.
The average Price of the 155 trades last year was $990,000 and sellers on average achieved 95% of their list price. It took on average 53 days to sell one of these homes.
So far in January alone we have had 9 properties sell firm at this price range, and 3 more sold conditionally. If this pace continues this could easily be a record year for this range.
There are currently only 45 properties available in all of Halton Hills in this price range. With approximately 3 months worth of inventory in a category of homes that usually has twice that amount, I anticipate sellers will be having a good year.
When people sell a luxury home, it follows that they become (in often cases), buyers for a different luxury home.
Advice: Choose a realtor with some experience at this price level, look at their stats, look at a plan for marketing your home, and talk to clients of that agent. This is one of your most expensive assets, and there are not likely going to be hundreds of similar homes that have sold to define the market well....you need an agent who knows this market, who has been successful in negotiating deals at this price level, and who will communicate effectively with you and on your behalf. Buyers will be doing due diligence on the internet, this is where they will see the home you wish to sell for the first time, and in most cases they will select or disqualify the home after viewing the digital marketing the first time.
In general, 2016 should be a great year for people selling luxury homes!
From the buyers side:
Not quite as rosie a picture, you are looking for something specific....acreage, outbuildings, Log Home, geothermal heating, whatever it is, buyers in this range have a lot of money to spend but are always looking for something unique before putting in an offer. With lower inventories and more buyers, this segment of the market is changing from a clearly Buyer's Market to more Balanced, or even slightly tipped towards Seller's Market. It makes sense that at the low end $750,000 to $900,000 this is more the case, and as the price gets more expensive, the number of buyers drops quickly.
If you are spending 750,000 - 900,000, I suggest you be more diligent, see listings early, see all that are potential ones and as always if you are sure, make your offer. Waiting in my experience just costs more... if you don't lose the home to another buyer who is ready to act, then you are inviting more potential buyers the time to see it and compete when you do make your bid.
Let your realtor know your geographical limits, budgets, and style preferences, and be honest with them and yourself as to what these limits are. I cannot tell you how many times I have been told an absolute must have need from a buyer only to purchase a home that is totally different. Talk things out, what are needs, what are must haves, and what are "would be nice" features....
look at the cost of gas, and the commute....it's pretty simple economics, the farther you are away from the CN Tower, the further your dollars go! If you want 10 acres, paddocks, a heated shop and inground pool for under $1,000,000 then it's likely that you need to look in Erin, or even East Garafraxa. They are lovely places to live, and you may actually find a property that meets your needs there.
Choosing a Realtor with experience is critical here, buying a rural home, century home, home with acreage, etc. these homes have different systems for plumbing, heating, sewage, and your value can be affected more substantially if you are not aware of zoning on adjacent and close properties, green belt legislation, severances, Conservation Authorities, you absolutely need a realtor who can coach you through the process and ensure that your rights and ability to inspect and ensure these systems will support your use of the home are protected.
I hope that this information is helpful, it is something that I enjoy doing, looking at the various segments of our market and look at them from both the Buyers ad Sellers perspective, if you have any comments or questions, please feel free to contact me at any time, through the website or via my email
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