las vegas luxury real estate - white paper
Post on 06-Apr-2016
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INTRODUCTIONIn an effort to provide clients and agents with the most accurate and up-to-date information, Windermere Real Estate, in conjunction with Lawyers Title, proudly presents its 2014 White Paper on the luxury home market in Las Vegas.
The purpose of this White Paper is to define the luxury market by price segment and geographical location, determine whos buying luxury homes in Las Vegas and discover the must-have features and amenities that luxury buyers have on their list. What types of new trends are appealing to those buyers?
We know Las Vegas is attracting international buyers who recognize value in a market still recovering from the bursting of the bubble. Where are they coming from? How many luxury buyers are paying cash? Do they prefer single-family homes in the suburbs or high-rise condos on the Strip?
We also want to explore technological advances in the real estate industry, from virtual tours and digital marketing to applications that make it easier to close the deal. How essential is it for Realtors to be wired to their iPhone, iPad or laptop?
We want to examine every aspect of the luxury home market. Whether youre buying or selling, knowledge is power. We want to bring everyone to the table with a clear understanding of evolving dynamics in the Las Vegas housing market so that they feel comfortable and assured when they sign on the dotted line.
Luxury agents are relentless in the pursuit of helping clients realize their dreams, so that at the end of the day, buyers can emerge with a house theyre proud to call home and the confidence they made the right decision.
Statistics in this report are based on home closings of $500,000 and above from 2004 through 2013, according to public records from the Clark County Recorders Office, provided by Lawyers Title. In gathering in-depth information on the intricacies of the luxury market, Windermere Real Estate contracted an independent third party to conduct telephone and e-mail interviews with top luxury real estate brokers and marketing executives in Las Vegas.
This report remains proprietary to Windermere Real Estate and the contents may be reprinted with attribution to Windermere Real Estate.
EMERGENCE OF THE LUXURY MARKETTo believe that Las Vegass luxury home prices will return to their peak anytime soon is to dream the impossible dream. Perhaps before the return of Halleys Comet.
Most real estate experts agree that Las Vegas home appreciation rates during the boom were unsustainable. Las Vegas led the nation with consecutive quarters above 40 percent appreciation during the height of the boom, which began in the 1990s and lasted through 2006. As a result, luxury home sales in Las Vegas grew simply due to increasing prices in many instances. Homes that originally sold for $250,000 were going for $500,000 plus.
Moderate luxury ($500,000 to $1.5 million): Sales peaked at 7,326 in 2006,bottomed at 621 in 2011 and rebounded to 1,294 in 2013.
Mid-range luxury homes ($1.5 million to $3 million): Sales peaked at 224in 2006, bottomed at 48 in 2012 and rebounded to 98 in 2013.
Ultra-luxury ($3 million plus): Sales peaked at 50 in 2007, bottomed at 12in 2011 and rebounded to 27 in 2013.
Las Vegas luxury home sales are driven largely by Nevadans moving up and Californians cashing out and buying the same home in Las Vegas for roughly half the price. Nevadans make up roughly half of luxury home buyers in Las Vegas, while Californians account for about 20 percent.
Definitely the California entourage. They want to get away from taxes and traffic. Im one of these myself. A lot of my buyers are Midwesterners sick of the cold weather. Its just a hop, skip and a jump for them to get here. A lot are coming from the East Coast. Compared to Palm Springs and Florida, Las Vegas usually wins. People like our accessibility to the airport and our weather. Las Vegas has so much more to offer. Sharla Scharpnick, Windermere Real Estate
International buyers saw value in Las Vegas depressed real estate market, particularly the British. The report found that Brits represented 29.1 percent of international buyers from 2004 to 2013, followed by Hispanics (16.6 percent), Chinese (15.3 percent) and Canadians (8.6 percent). Of the Canadians, nearly 39 percent were from Alberta and 35 percent were from British Columbia.
In the ultra-luxury market, Arabic, Israeli, Persian, Chinese and Korean buyers were most prominent.
Brokers are seeing buyers from all over Europe and Asia, but primarily they see American buyers.
I think the international buyer is a bit overhyped. We sell to Chinese, English and Canadians, but theyre not the majority. Maybe 10 to 15 percent. What I see is a lot of Californians buying in Nevada. They sold their home to Asians. Asians would rather buy on the coast in Los Angeles or San Francisco than take the next step to Las Vegas. Ken Lowman, Luxury Homes of Las Vegas
Demand for high-end, custom homes in Las Vegas produced exclusive, guard-gated subdivisions such as Red Rock Country Club, The Ridges, Bellacere and Eagle Ridge, all within the master-planned Summerlin community on the elevated western rim of Las Vegas Valley, adjacent to Red Rock National Conservation Area. Summerlin encompasses approximately 26,000 acres and is home to about 100,000 residents.
Other million-dollar neighborhoods include:
The high-rise luxury condo market sprouted with Turnberry Place and Park Towers in the late 1990s, and blossomed with chic and modern projects in the resort corridor and the exquisitely designed One Queensridge Place in the upscale suburbs. High-rise condo sales rose from 217 in 2004 to a high of 1,337 in 2007. They were back down to 281 in 2013.
Other high-rise condos include Metropolis, Sky Las Vegas, Panorama, The Martin, Allure, Trump Tower, Palms Place and Veer Towers in the resort corridor; and SoHo Lofts, Newport Lofts and The Ogden in downtown Las Vegas.
The wealthy empty-nester is about taking control of what they want to experience in life. If they want to grab a condo at Queensridge, they have a concierge and all the amenities. They spoil themselves. Theyre just going to do what they basically want to do. Randy Char, Char Luxury Real Estate
Roughly 30 percent of luxury single-family home sales in Las Vegas are second homes and vacation homes. Particularly in the high-rise luxury condo market, the report showed that 82.8 percent of sales were nonowner-occupied. Of those, 70.2 percent were cash transactions.
TRANSFER OF WEALTHMost luxury buyers tend to be baby boomers. Theyre wealthy empty-nesters whove worked all of their lives to achieve financial freedom and have now decided to enjoy the comforts they deserve. Theyre downsizing not because the children are gone or because of affordability, but to lessen their responsibilities.
These buyers are planning their transition to retirement. They are enjoying making their decisions about their new lifestyle. Di Redman, Windermere Real Estate
Young affluents are savvy from observing the market crash. Generation X is starting to enter the luxury market as they recognize theyll be in the cats seat for the next 20 years, earning maximum income. They occupy key positions in companies and are emerging with wealth and confidence. Generation Y is still fairly young. They watched their parents go through the economic pain of the real estate bust, many of whom lost their homes to foreclosure, and they want nothing to do with it.
According to Luxury Portfolio International, 21 percent of young affluent purchased a primary home in the past three years, compared with 9 percent of those 50 years and older. However, baby boomers definitely outnumber Generations X and Y in buying a home above $500,000.
For the luxury market, its typically the baby boomer that worked their whole life and made it financially. Well get the occasional younger athlete or entertainer or dot-com founder that took his company public. Ken Lowman, Luxury Homes of Las Vegas
CATERING TO YOUR CLIENTSLuxury home buyers and sellers are definitely high-maintenance. They require special attention and expect the highest level of personal service.Real estate agents and marketing directors cannot be complacent when working with luxury clients. These are sophisticated, successful people who are innovative thinkers. Theyre going to look for the same qualities in their Realtor.
Luxury buyers differ from traditional buyers in that their wants are motivating factors instead of needs. Mostly, they want convenience and to make purchases that fit their lifestyle. They compromise less, but are comfortable paying a high price as long as its for something they see value in. Even the wealthiest people consider value and quality before making a purchase. -- Randy Char, Char Luxury Real Estate
In dealing with international buyers, real estate agents must consider:
Working with luxury home buyers and sellers can be a lot of fun. I get to work with some pretty amazing and talented people. However, its not all peaches and cream. One of the biggest challenges of working with high-end sellers is to get them to price their home right. Rob Jensen, Jensen Group
Two most common statements from sellers: I dont have to sell and I wont give it away. Theyre clarifying that they are not in a financial hardship and they want to get the best price. This leads to homes being overpriced and sitting on the market for months, even years, before the seller repositions the property by lowering the price.
I find that most sellers just expect you to get the job done, whatever that takes. Its common to still see poorly taken photos, bad copy and mistakes in marketing these days. Personally, we h