Michael Marquette’s “View from the Bridge”
It was a wonderful Luxury Real Estate conference in Vail, Colorado and a great opportunity to talk with the best Luxury agents and brokers from around the World. Without doubt everyone wanted to know just how the real estate market was going in each country and especially how the Luxury segment was progressing.
With all of the misinformation and sensationalist reporting from the media it was a perfect opportunity to get information from reliable sources. The one constant from every country was that the Luxury market is selling at lower prices than had previously been achieved. Whether we discussed the United States, Europe, Asia, the Middle East or Australia the conversation was similar, with some areas suffering from reduced prices more than others.
It was difficult to put an exact figure on the extent of price reductions because of local fluctuations however 20% was generally accepted as fair and reasonable. It was also accepted that the recovery will be slow and gradual and that the “new normal” will be very different than that which had existed previously. It reminded me of an article I wrote a couple of months ago which is worth revisiting now.
So the big question for Luxury Home buyers and sellers is when will Luxury Home prices boom again? The answer is no time soon. We can expect people to be cautious with their spending and more careful about the decisions they make. We still have enormous levels of consumer debt around the world and debt reduction is something that will take many years for households to get on top of.
Unemployment and underemployment are huge issues in most countries with an estimated 20% of the Australian workforce fitting into one of these two categories. This is even higher in countries like the United States and Spain and will take years to correct.
In short it is more important than ever to employ the very best agents and brokers to sell your Luxury Home. We are in an extremely complex real estate cycle and Luxury experience, innovation and global reach are just three of the essential elements which you should insist on your broker proving to you before entrusting them with the sale of one of your largest assets.