profile of luxury clients
DESCRIPTION
Profile of Luxury Clients. Survey Methodology. 730 online surveys were received in November 2013. Respondents are Luxury clients who purchase/sell a home for over one million dollars. Maximum sampling error: ±3.5 percent at two standard deviations (a 95% confidence level). - PowerPoint PPT PresentationTRANSCRIPT
PROFILE OF LUXURY CLIENTS
Survey Methodology• 730 online surveys were received in November 2013.
• Respondents are Luxury clients who purchase/sell a home for over one million dollars.
•Maximum sampling error: ±3.5 percent at two standard deviations (a 95% confidence level).
Type of Client Represented
Q: Who did you represent in your last transaction?
41%
40%
18%Buyer Seller Both
The Typical Luxury Client
74% College
Educated
48% Single
92% permanently reside in the United
States
71% Caucasian
53 Years Old
$350K Median Income
Singles made up 48% of Luxury Clients in 2013
Married Single Other0%5%
10%15%20%25%30%35%40%45%50%
Over 70% of Luxury Clients were White
African American/
Black
Asian Caucasian/White
Hispanic/Latino
Other Unsure0%
10%20%30%40%50%60%70%80%
2%7%
74%
7% 7%2%2%
16%
73%
2% 5% 3%
Buyers Sellers
Client Profiles
Luxury Buyers
Traditional Buyers
Luxury Sellers
Traditional Sellers
Age 46 Years 38 Years 60 Years 46 Years
Median Household
Income
$350K $125K $275K $140K
Marital Status Single (57%); Married (24%)
Single (37%); Married (63%)
Single (44%); Married (30%)
Single (32%); Married (48%)
Over 70% of Luxury Buyers were White
African American/
Black
Asian Caucasian/White
Hispanic/Latino
Other Unsure0%
10%20%30%40%50%60%70%80%
2%7%
74%
7% 7%2%
8%
28%37%
26%
1% 0%
Luxury Buyers Traditional Buyers
Over 70% of Luxury Sellers were White
African American/
Black
Asian Caucasian/White
Hispanic/Latino
Other Unsure0%
10%20%30%40%50%60%70%80%
2%
16%
73%
2% 5% 3%12%
25%
36%
26%
0% 0%
Luxury Sellers Traditional Sellers
More than four of five luxury repeat buyers owned more than one property
0 1 2 3 4 5+0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
17%
38%
21%
9%5%
9%
Mean: 2.4 properties
Q. How many other properties does your last luxury client own?
International Buyers Are Purchasing Properties in California
Luxury Homes All Homes0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
5%
8%
SERIES: 2013 Housing Market Survey and 2013 Luxury Clients SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
PROFILE OF LUXURY PROPERTIES!
Majority of Luxury Transactions were Traditional Sales
Regular/Tradtional/Equity Sale
REO/bank-owned
Foreclosure
Short Sale
Other
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%
90.3%
2.7%
0.1%
3.0%
3.9%
Luxury properties often had a hilltop or ocean view
Ski resort
Lakefront
Resort area
Oceanfront
Mountain area
Golf course
Ocean view
Hilltop
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%1%
4%
9%
10%
12%
16%
28%
41%
Luxury Buyers intended Largely to use their Luxury Homes as their Primary Residence
Primary Res-idence
Vacation/Second Home
Investment/Rental
Property
Other0%
10%20%30%40%50%60%70%80%90%
79%
10% 9%2%
Property Value Breakdown
$1M - $2M $2M - $3M $3M - $5M $5M - $10M $10M+0%
10%
20%
30%
40%
50%
60%
70%
80% 76%
13%
6% 3% 3%
Median Price: $1,375,000
BUYING AND SELLING PROCESS
BUYING
Main Reasons for Purchasing a Home
Other
To Rent it Out
Desired Smaller Home
Tired of Renting
Change in Family Status
Desired Larger Home
0% 10% 20% 30%11%
2%2%3%
5%5%6%
11%11%
20%25%
Luxury Home Buyers
Q. What primarily motivated the client in your last luxury transaction to buy within the past year?
Other
Retirement/Move to Retirement Community
Desired Smaller Home
Desired Better Location
Investment/ Tax Considerations
0% 10% 20% 30%
9%
2%
3%
4%
4%
4%
15%
17%
21%
23%
Traditional Buyers
Reasons for Buying – All Homes First Time Homebuyers Vs. Repeat Homebuyers
Q. What was the single most important reason for selling/buying the property?
Tired of RentingDesired Larger Home
Investment/ Tax ConsiderationsDesired Better LocationChange in Family Status
Changed JobsForeclosure/Short Sale/Default
Desired Smaller HomeRetirement/Move to Retirement
CommunityOther
0% 10% 20% 30% 40% 50% 60%Repeat Buyers First-Time Buyers
SERIES: 2013 Housing Market SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
The Median Number of Years that Luxury Buyers Intended to Keep the Property was 10.
Luxury
Traditional
0 1 2 3 4 5 6 7 8 9 10
10
6
Q. How many years does the client in your last luxury transaction intend to keep the property?
One –Third of Luxury Buyers Paid with All Cash
Luxury Buyers Traditional Buyers0%
5%
10%
15%
20%
25%
30%
35%
40%35%
27%
% of All Cash Sales
• More than a third of luxury buyers paid with all cash
• The share of all cash buyers had been on the rise for overall sales until this year
SERIES: 2013 Housing Market Survey and 2013 Luxury Clients SurveySOURCE: CALIFORNIA ASSOCIATION OF REALTORS®
Majority of Luxury Home Clients used their Personal Savings as the source of their down payment
27.8%
55.7%
1.4%7.1% 8.0%
Proceeds from a Previous InvestmentPersonal Savings1031 ExchangeOtherDon't Know/Unsure
What was the source of the down payment in your last luxury transaction?
Luxury clients utilized their personal contacts to find their agents.
Tradtional Buyer
Tradtional Seller Luxury Client0%
10%20%30%40%50%60%70%80%90%
100%
OtherInternetAdvertisingRelationships/Con-tacts/Referrals
Q. How did you find the client in your last luxury transaction?
How Agents Find Luxury Clients
OtherFor Sale Sign
Client responded to my adClient is a relative
Client found me onlineOpen House
Previous Client
Prior dealings with my brokerage
Referral from another agent
Referral from a previous buyer
Referral from a friendClient is a friend
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
10%
2%
3%
4%
7%
7%
8%
8%
9%
12%
15%
18%
Q. How did you find your client in your last luxury transaction?
Agents spent about 5 weeks on average looking for properties with their luxury buyers
Luxury Buyers Traditional Buyers
0
2
4
6
8
10
12
5
10
Wee
ks
Q. How many weeks did you spend looking for a property with your client in your last luxury transaction?Q. How many properties did you view with your client prior to the client making a purchase in your last transaction?
• A luxury buyer typically viewed 10 properties with his/her agent before making a home purchase.
• A traditional buyer viewed 10 properties with his/her agent before making a home purchase
Luxury Home Buyer Made Fewer Offers Than a Typical Home Buyer
0 1 2 3 4 5 6+0%5%
10%15%20%25%30%35%
# of Offers Made on Other Properties
Luxury Buyers Traditional Buyers
Q. How many offers did your last client make on other properties?
Luxury Buyers
Traditional Buyers
0 1 2 3 4
1
3
Median # of Offers
SELLING
Main Reasons for Selling Luxury Home
Other
Affordable Price
Investment/Tax Advantages
No Longer Wanted/Needed a Vacation Property
To Flip it for a Profit
Desired Larger Home
Desired Better/Other Location
Changed Jobs/Relocated
Desired Smaller Home
Change in Family Status
0% 2% 4% 6% 8% 10%
12%
14%
16%
18%
20%
15%
2%
4%
4%
5%
9%
12%
13%
18%
18%
Q. What primarily motivated the client in your last luxury transaction to sell within the past year?
Traditional Sellers - Reasons for Selling
Other
Desired Smaller Home
Changed Jobs
Retirement/Move to Retirement Community
Investment/ Tax Considerations
Desired Better Location
Change in Family Status
Desired Larger Home
Foreclosure/Short Sale/Default
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
16.7%
6.0%
6.3%
9.5%
10.8%
11.0%
11.6%
12.6%
15.5%
Q. What was the single most important reason for selling the property?
Luxury Sellers Typically Keep Their Properties Longer than Traditional Sellers
Luxury Sellers
Traditional Sellers
0 1 2 3 4 5 6 7 8 9 10
10
8
How many years did the seller own the property in your last luxury transaction?
Luxury Home Sellers Received Fewer Offers Than Traditional Home Sellers
1 2 3 4 5 6 or more
0%
5%
10%
15%
20%
25%
30%
35%
# of Offers Made on Other PropertiesLuxury Sellers Traditional Sellers
Median # of offers received by luxury sellers: 2Median # of offers received by traditional sellers: 3
Q. How many offers did your last client received?
Luxury Sellers
Traditional Sellers
0 5 10 15 20 25 30 35
30
11
Median # of Days on Market
Over a Quarter of Luxury Homes Sold Above Asking Price
% of Sales Above Asking Price0%
10%
20%
30%
40%
50%
60%
27%
50%Luxury Homes All Homes
Q. What was the initial/listing price of your last transaction?Q. What was the final sales price of your last transaction?
• A luxury home typically sold with 1 percent discount below its asking price in 2013
• A traditional home typically sold with 0 percent discount below its asking price in 2013.
Over 9 out of 10 Properties were marketed through an MLS
Other
Builder/Developer
Private Listing
Advertisement
Open House
MLS
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
10%
4%
10%
35%
37%
91%
Q. How was the property in your last luxury transaction marketed? Select all that apply.
Marketing through the MLS was still the most effective way to sell a Luxury property.
Other
Builder/Developer
Advertisement
Private Listing
Open House
MLS
0% 10% 20% 30% 40% 50% 60% 70%
Q. Which of these marketing techniques was most effective in your last luxury transaction?
The Median Amount spent on marketing a luxury property was $1,000.
47%
13%
14%
1%
11%
14%
PhotographerVideographerDesignerArchitectOtherNone
Q. Which of the following professionals did you hire to help assist you market the property in your last luxury transaction? Select all that apply.
Marketing Breakdown• The median amount that sellers spent on a photographer was 300 dollars.• The median amount that sellers spent on a videographer was 250 dollars.• The median amount that sellers spent on a designer was 500 dollars.
Luxury Home Prices Are Expected to Increase Luxury Buyer
Traditional Buyer
Luxury Seller
Traditional Seller
1 YearUp 71% 36% 67% 43%
Down 1% 20% 2% 21%Flat/Unsure 27% 44% 31% 36%
5 YearsUp 79% 60% 76% 58%
Down 3% 17% 3% 23%Flat/Unsure 18% 23% 21% 19%
Q Do you think home prices in the neighborhood where you purchased will go up, down, or stay flat … in one year, in five years?
What Luxury Clients Needed the Most Assistance with?
Negotiating (28.3%)
All aspects of buying and selling (10.2%)
Inspections (8.2%)
Contract (4.6%)
The Takeaway•Sales of luxury properties will grow steadily as the economy continues to improve• International buyers are purchasing high-end properties in California•Luxury clients need help, especially in the negotiation process•Keep in touch with your clients