by Weichert Real Estate Affiliates Inc. | Aug 16, 2024 | Industry, News Feed
A record 8.5 percent of all U.S. homes are worth $1 million or more, up from 7.6 percent last year and 4 percent before the pandemic, according to a new Redfin analysis. California is adding them faster than other states.
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In some markets, a $1 million home is considered a luxury property — but the number of places in which that still holds true is shrinking all the time.
The number of homes in the U.S. with an estimated value of $1 million or more has hit a new high, with 8.5 percent of all homes hitting that value, according to data from Redfin provided to The Wall Street Journal.
Last year, the share of $1 million homes in the U.S. was 7.6 percent. Before the pandemic, it was just 4 percent.
More homes are commanding that once-lofty price as home prices have soared nationally. The median home sale price was up 4 percent year over year in June to a record $442,525, according to Redfin. Meanwhile, the median sale price for luxury homes, or the top 5 percent of the market, increased 9 percent year over year to a record $1.18 million during the second quarter of 2024.
“Years ago, if you owned a $1 million home, you would have been considered pretty rich,” Redfin economist Chen Zhao told The WSJ. “Now, that’s the entry point for some markets.”
Although homebuying demand has softened in recent quarters because of high mortgage rates, prices continue to rise due to low inventory, which is driving competition, Redfin’s report stated. Inventory has grown in recent months, but is still approximately 30 percent lower than pre-pandemic levels.
The growing share of $1 million homes in the U.S. is a good thing for homeowners and sellers since it means growing equity in their portfolio, but it adds to affordability challenges for homebuyers, especially those purchasing their first home.
“Home prices, insurance and mortgage rates have shot up so much that many people are either priced out of the market or weary of committing to such a high monthly payment,” said Redfin Premier agent Julie Zubiate, who is located in the Bay Area.
“The people who are buying without hesitation are in tech and work at Google, Apple, Facebook or a similar company. Many Bay Area buyers — especially those without tech money — are getting more selective, jumping ship if a small problem comes up in say, the inspection. They’re spending too much money to rationalize not getting everything on their must-have list.”
Recent drops in mortgage rates have helped buyers with affordability, increasing their purchasing power by tens of thousands of dollars, Redfin noted. That drop is bringing some buyers back into the market, Zubiate said.
The share of $1 million homes is also growing in most major metros across the U.S., except for Austin, Texas, where it declined by 0.1 percent year over year and Indianapolis, Indiana, and Houston, Texas, where the share of $1 million homes stayed flat on an annual basis. In Texas, a push on new construction has helped curb prices.
Meanwhile, California, which already had the largest share of homes valued at $1 million or more, continues to gain them at a more rapid clip than anywhere else in the country.
Anaheim saw the greatest increase in $1 million homes year over year, with 58.8 percent of home hitting that threshold, up from 51 percent one year ago. Next, San Diego (42.6 percent up from 36.5 percent) and LA (39.3 percent up from 35 percent) saw the greatest annual gains in $1 million homes year over year. In those markets, the median home price was already around $1 million, which meant that many properties were poised to hit or surpass that mark.
The Golden State also has the metros with the most $1 million homes — in San Francisco and San Jose, about 80 percent of homes are worth at least $1 million, and in Anaheim, 58.8 percent command at least seven figures.
However, there are still a few metros out there that hardly have any $1 million homes, including Detroit, Cleveland, Pittsburgh and Kansas City, Missouri.
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Email Lillian Dickerson
by Weichert Real Estate Affiliates Inc. | Aug 13, 2024 | Industry, News Feed
Inman Connect is moving from Las Vegas to San Diego in 2025 and it’ll be bigger, better and bolder than ever before. Join us for Inman Connect San Diego on July 30-Aug. 1, 2025 with the brightest minds in real estate to shape the future of the industry. Reserve your spot today for an exclusive discount.
Are you worried about doing fewer deals as a result of the National Association of Realtors (NAR) commission suit settlement and resulting policy changes? Many agents are. There are two ways to earn more income: sell more homes or sell higher price point homes. Almost every sales program focuses on selling more homes, but few teach how to sell more expensive homes.
After 33 years in real estate, I have learned what works and doesn’t work with affluent buyers and sellers. There is a misconception that luxury buyers or sellers are more sophisticated than your average client.
They are usually very good at one thing, which makes them successful, whether as attorneys, doctors or business owners, but they are typically less knowledgeable about real estate.
Also, because most affluent buyers are all cash, you don’t need to worry about financing issues or dealing with an appraiser who values a property under the asking price.
Have you ever wondered why some agents in your market sell more expensive homes? Have you been intimidated by working with more affluent clients, buying or selling $1 million, $2 million, or $5 million-plus homes? Below are some strategies for increasing your average sales price: getting higher-priced listings and buyers and increasing your commissions.
1. Define luxury in your market
What is luxury in your market? Many Realtors think luxury is multimillion-dollar homes. It can be, but it is best defined as the 10 percent most expensive homes in the market. For some markets, that could be $500,000; for others, it could be $20 million.
2. Make sure you look the part
Clothes, car, marketing materials. You need to be consistent so that whenever you are out, you look high-end but don’t overdress for your area.
For example, in Malibu, you would never wear a sports coat or a tie.
Things you would want to think about in Malibu are:
- Does your business card and logo match a luxury brand?
- Are your marketing and promotional pieces consistent with the clients you are trying to attract?
- Do your A-frame open house or real estate signs need a refresh or rebranding?
Visit higher-end open houses. Analyze the listing agents’ marketing materials, appearance and how they show the home. Does your attire match the picture on your website?
3. Consider your title
Everything. Most likely, your title is buyer’s agent, sales associate or some variation, especially if you are on a team. If you are on a team, check with your team leader if you can start using the sales partner title. High-net-worth individuals will be more comfortable with a sales partner, even if someone may be younger or with less experience.
4. Know your luxury market data. Take a luxury seminar or negotiation class
This is one of the most important lessons: Luxury clients need your expertise more than you think.
Know your luxury market, including average price, median, days on the market and cost per foot. Always use annualized data rather than monthly since with fewer transactions, especially at higher price points, using smaller amounts of data can skew your numbers.
Each area is very localized, so knowing what north or south of specific neighborhoods commands more money is critical.
Many affluent buyers and sellers have business managers, accountants, attorneys and handlers, whose main job is to protect their clients (and justify their worth), so they expect you to be very knowledgeable in real estate data and trends.
Research your central city as well as any neighboring cities you work in:
- What did the most expensive home sell for in 2021, 2022, 2023, 2024?
- How many homes sold in the top 10 percent for 2021, 2022, 2023, 2024?
- Look for any trends or unusual changes regarding prices or the number of sales.
Take an advanced negotiation class, such as Harvard Business School, the Karrass Negotiation Seminars, or RENE (Real Estate Negotiation Expert) classes from the National Association of Realtors, or a luxury real estate seminar or real estate designation (Luxury Home Marketing Specialist).
The Unsold Inventory Index is the best way to gauge a market. It will tell you if you are in a seller’s or a buyer’s market. To calculate it, you take the existing inventory and divide it by the number of homes that sold in the previous month.
Over five months is considered a buyer’s market, and under five months is a seller’s market. We have seen as low as one month and as high as 20 months. This is an excellent tool because it’s not uncommon in the same area to be in a seller’s market for entry-level price points (bottom 10-20 percent) while being in a buyer’s market for the luxury market.
In some markets, higher-end homes tend to sell off-market (due to the seller’s privacy concerns and not wanting open houses or a sign in front), so checking the public records or working with your title representative to access this information is essential.
Keep a list of off-market home sales to gain an even better understanding of the luxury market. This will also impress the luxury clients’ attorneys and business managers.
5. Know what your USP (unique selling points) are
What is your secret sauce? Something you do better than anyone else in your market. This will take time to figure out, and it’s even harder to articulate when working with buyers.
A few things to consider:
- Do you have a driver to pick up your out-of-town buyers from the airport?
- Do you have a large database of off-market homes?
- When showing them homes, do you find out what food or drink they prefer to have on hand?
- Are there any schools where you can set up tours for them?
If they have kids, arrange for them to meet other families with similar-age kids. If it is raining, bring extra umbrellas. Bring sandwiches and drinks in a cooler if you are tight on time. Preview all homes so there are no surprises. Take CubiCasa floorplans of the houses so you can show them the layout of each house.
6. Leverage the media
This is the most underutilized area yet has the highest return on investment. Start writing articles in the local paper and online on the most expensive home to sell in your area. You don’t have to be the one who sold it.
Start writing a blog about the top three homes each month, what they sell for, including where they sold, how long they were on the market and any key facts. Eventually, you will be viewed as the expert in the luxury space.
Research and create a spreadsheet of the real estate writers from your local paper, favorite real estate podcasts or radio shows. Set up coffee or Zoom dates with them to discuss what articles or topics they want. Think of creative and timely articles that would be of interest to their readers.
Start writing a few articles. Dictate, use ChatGPT for planning, or hire someone to help you write them.
Here are a few tips. When the media calls, answer them ASAP. Treat the media like a hot lead. They usually have very short deadlines. The ones they reach first get the interview.
Cultivate media relationships. Be a contrarian thinker. They love unique perspectives, like why spring is not the best time to sell your home. Use data whenever possible.
7. Meet luxury buyers and sellers
Sponsor or attend luxury events. Join a high-end networking group, clubs and charity boards. Start charitable giving programs. Think about getting involved with polo, equestrian, car shows, whiskey clubs, gourmet groups, boats, wine, cigars, golf or any place where people with money may congregate. You must have a genuine interest in the luxury event so it is authentic.
Review your door-knocking fliers. Are they seller-focused or more about you and your company? For high-end sellers, focus on topics like putting their home in a living trust, accessing HELOCs (home equity lines of credit), or helping them renegotiate with the county assessor to lower their property taxes.
Join a high-end networking group (comprised of attorneys and finance), ideally with minimum (high) income levels.
Consider paying for coffee for the next 30 people in line at the local Starbucks or a popular coffee shop in the affluent area you are trying to break into. Then, sit at a table with something identifying you in real estate, and ask the manager to let people know you bought their coffee. This is a relatively inexpensive way to meet people.
Try contacting and befriending Hotel Concierges, or if there are any guard-gated communities around you, befriend the guards. Bring them movie passes and coffee gift certificates in exchange for them passing out your cards.
8. Strategies to increase your average sales price
Aim to increase your average sales price by 20 percent and then strategize how to achieve it.
Use luxury marketing companies like Leverage RE to market your high-end listings. They advertise weekly in The Wall Street Journal, The Washington Post, Robb Report, Financial Times, Mansion Global, Barron’s, and Juwai.com (China’s largest MLS). They are the best investment for marketing high-end properties.
9. Confidence and believe in yourself
Do you have what it takes (confidence) to sell a high-end property or represent a celebrity or high-net-worth individual? You must have confidence in yourself, as successful people want confident people.
I’m not referring to being cocky or arrogant but knowing your data and being an expert with the relevant sales, knowing off-market properties and ultimately doing what is in the client’s best interest. That may be telling them to refrain from writing on a property that may be overpriced, hard to resell, or has some other issue.
Anthony Marguleas is the founder of Amalfi Estates. Connect with him at Instagram and LinkedIn.
by Weichert Real Estate Affiliates Inc. | Jul 29, 2024 | Industry, News Feed
Inman Connect Las Vegas is LIVE this week! Get all your real estate questions answered and network with thousands of industry leaders. Join us virtually from anywhere in the world — the future of real estate is unfolding now.
Egypt Sherrod is on a tear.
Indeed, the 2023 Inman Influencer regularly juggles episodes of her “Marriage and Money Podcast with Egypt and Mike” alongside husband Mike Jackson and her popular HGTV reality series Married to Real Estate.
She also leads a home furnishing line, Indigo Road, which she’s expanding with the recently announced Indigo Road Training Center, a state-of-the-art center for real estate agents, and, of course, her brokerage firm, Indigo Road Realty.
And today she’ll appear on live on stage in Las Vegas for Luxury Connect.
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In advance of her appearance at Connect, Inman chatted with Sherrod via email (she was on a well-earned vacation) to hear more about her plans in Las Vegas and a recently announced season four of Married to Real Estate.
Inman: What are you looking forward to most at your first-ever Inman Connect Las Vegas appearance?
Egypt Sherrod: I am looking forward to connecting with some of my amazing fellow broker friends who are traveling from far and wide to attend. Also, relationship building and networking of course, and tapping into the pulse of the next hottest technology for our industry.
What do you like most about Las Vegas?
It’s the lights and action of the strip for me! I always try to catch a good show whenever I’m in town.
What can you tell us about the recently announced season four of Married to Real Estate?
It was just announced that our show spans 19 countries now. It’s still beyond belief! The fact that we come from such humble beginnings and this show has grown to be an international hit is mind boggling. Mike and I are so very grateful for the deep love and loyal viewership.
In season three, fans watched us launch Indigo Road. Now in season four, they get to see that the company has grown into not only a robust real estate brokerage, but a legacy brand with a family of companies under the Indigo Road umbrella including a full scale design house and a home furnishing division.
We also have some amazing clients who fans may recognize (wink), and both the projects and the family grow! That’s all I can share for now.
Do you have any fun plans while in Vegas for Inman Connect? What will you do, or where will you eat?
I am literally there for 20 hours before I head to speak in Cincinnati. Can you believe it?
But in that time I plan to have a few great business meetings, hold a fireside chat on Inman’s main stage about brand building, catch a delicious dinner at Giada’s, and speed shop!
Email Lillian Dickerson
