Luxury Institute News

June 20, 2014

Real Estate In a Global Consumer Landscape

By: Ginette WrightHomes & Estates
Luxury Living Worldwide Edition 2
A Special Supplement for the Wall Street Journal
June 20, 2014

It is no secret that fine property today trades among an increasingly international circle of clients who appreciate the multi-faceted value of real estate. These world citizens have a truly global perspective and see country boundaries as less meaningful in the search for their desired home experience. After all, one can just as easily enjoy an evening sunset from a balcony in Paris or Miami.

What this means is that clients demand that the reach in the marketing of their home be international in scope. One could argue that all borders are crossed in connecting to buyers online; to an extent that is true. Yet there is an important distinction: trust. Am I more likely to click on a property associated with a company I recognize, whether I consciously acknowledge it or not? Milton Pedraza, CEO of the Luxury Institute, notes: “Luxury brands that offer both expertise and trust and are also recognized for delivering the ultimate in global reach in an extremely relevant and personal category such as real estate have a definite advantage in today’s marketplace.” With a heritage that spans over a century and locations in 48 countries and territories, the Coldwell Banker® brand and the Coldwell Banker Previews International® luxury marketing program are familiar to a vast audience that is interested and engaged in acquiring real estate. Our international marketing, whether online or off, enjoys the halo of our global reputation. In the United States alone, we close over $100 million dollars in luxury real estate each day.*

We also believe in the strength of partnerships with brands that have longevity and heritage similar to our own. To that end, the Wall Street journal is a world-class organization with sophisticated readership in all corners of the world. The Homes & estates publication you are holding will land in the hands of Wall Street journal subscribers in major cities on three continents. It’s an investment we make because we want our clients to have access to every potential buyer anywhere in the world.

There is so much more I’d like to share about the value of the Previews® program and the expertise of our fine associates, but I am limited by the space on this page. Instead, I invite you to enjoy a fine read on Robert A.M. Stern Architects (buying his firm’s new book “designs for living” is also a must) and consider the housing possibilities we’ve included in this magazine. do you see a property that fits your view of living? Since summer is upon many of us throughout the world, we chose to look at the luxury lifestyle from the view of the coastline. After all, few moments are more prized in luxury real estate than the moment when you catch that first glimpse of water from your residence and feel a sense of serenity, knowing that you own this experience—the experience of home.

March 17, 2014

Wall Street Shares Wealth, for Better or Worse

By: Martha C. White
NBC News
March 15, 2014

The $26.7 billion in bonuses that Wall Street hauled in last year will help fill city and state tax coffers, and certainly boost retailers when bankers sport Patek Phillipe wristwatches and slip into Maseratis. But all that green is a double-edged sword for New York City.

Wall Street bonuses grew by 15 percent in 2013, to an average of $164,530, according to the New York State Comptroller’s office. Milton Pedraza, CEO of research firm the Luxury Institute, estimated that Wall Streeters spend between half and three-quarters of their bonuses, then save or invest the rest, and about half the amount they spend is funneled into the local economy.

Because they spend an incredible amount of money in their jobs, “I think that spills over in their personal life,” said David Friedman, president of research and consulting company Wealth-X.

Click the link to read the entire article: http://www.nbcnews.com/business/economy/wall-street-shares-wealth-better-or-worse-n53071

September 30, 2013

Wealthy homeowners want open floor plans, automation

By Lauren Beale
Los Angeles Times
September 28, 2013

Flexible spaces, tech-savvy features and outdoor-oriented living are popular with well-to-do U.S. homeowners, a pair of recent surveys show.

Among the 300 wealthy consumers polled, open floor plans, full automation/wiring and swimming pools topped the list of important amenities, a study by Coldwell Banker Previews International and the Luxury Institute found. Lower priorities for households earning at least $250,000 annually were staff quarters, tennis/sports courts and catering kitchens.

Architects also are seeing high interest in wireless and energy-efficient systems, results of an American Institute of Architects second-quarter survey show. And homeowners are still seeking outdoor living rooms and home offices.

http://www.latimes.com/business/money/la-fi-mo-home-amenities-20130928,0,6355914.story

September 24, 2013

Younger Buyers to Dominate Luxury Market

Realtor Mag
September 23, 2013

A new survey by Coldwell Banker Previews International and the Luxury Institute finds that wealthy younger buyers are driving the luxury real estate market, and they are willing to pay more than similar wealthy buyers age 55 and older.

The survey looked at Americans age 21 or older with a minimum gross annual household income of $250,000. It found that 43 percent of younger wealthy consumers are considering purchasing residential property in the next 12 months, compared to 21 percent of those age 55 and older. These younger, wealthy buyers spent an average of $2.1 million on their most recent purchase of residential property, approximately twice the average amount spent by older and similarly wealthy buyers.

“Luxury homes are for more than successful and retired empty nesters,” says Milton Pedraza, CEO of the Luxury Institute. “Today’s luxury buyer is both dynamic and diverse, and it’s reflected in the homes and products they’re buying.”

So what are these younger buyers looking for? The survey found they are significantly more likely than wealthy buyers age 55 and older to want homes with amenities such as a pool, outdoor kitchen, home gym, home theater, wine cellar, and four or more garages. They are also more than twice as likely to value green or LEED-certified properties.

“This trend toward younger luxury buyers is leading a change in desired home amenities,” says Betty Graham, president of Coldwell Banker Previews International NRT. “Whether these younger buyers have young families or are single without children, they are looking for homes that fit their active and unique lifestyle.”

For most luxury buyers, location is the most important factor when considering the purchase of residential property. And though they may travel internationally, only 6 percent of wealthy homeowners surveyed own residential property located outside the U.S.

http://realtormag.realtor.org/daily-news/2013/09/23/younger-buyers-dominate-luxury-market

Here Are The Amenities Rich Americans Want Most In Their Mansions

By Megan Willett
Business Insider
September 23, 2013

“Open floor plans” is the newest buzz phrase for wealthy real estate buyers.

A new survey from real estate franchise Coldwell Banker Previews International and research firm Luxury Institute asked 300 Americans with an annual income of more than $250,000 about their real estate shopping habits.

In response to a question about the most important residential amenities, 39% said a home with an open floor plan was more important to them than it was three years ago, and 32% said a fully automated home that they could control via remote or voice activation was more important.

Of less importance to today’s wealthy buyers were tennis courts, safe rooms , and multiple garages:

Here are a few other interesting points from the study:

  • Thirty-eight percent of those surveyed own two or more homes. Only 6% own another home outside of the U.S.
  • The average purchase price for wealthy consumers’ most recent residential property was $1.6 million.
  • The most important factor when purchasing a home was by far its location, with 70% of respondents saying it was the most important factor in their last real estate purchase.
  • Younger buyers are driving the luxury real estate market: Forty-three percent of Americans aged 21 to 55 with a household income of $250,000 are considering another residential property in the next year, and spent almost twice the amount on homes than those aged 55+ ($2.1 million compared to $1.1 million).
http://www.businessinsider.com/what-wealthy-buyers-want-in-a-mansion-2013-9#ixzz2fltHpZ9U

May 16, 2013

U.S. 2 Percenters Trade Down With Post-Recession Angst

By Cotten Timberlake
Bloomberg
May 15, 2013

Jennifer Prentice, a medical-equipment saleswoman in Minneapolis, once had no qualms about dropping $600 or more for Gucci purses. Now she spends $300 for Coach Inc. bags and is filling in her Burberry wardrobe with pieces from j.-crew.

“The things we went through over the last couple of years definitely have an impact on what I am doing,” Prentice, 45, said in an interview. “I tend to be less frivolous now.”

While good times keep rolling for the super-wealthy, many Americans at the bottom end of the privileged group with incomes of $250,000 or more are thinking twice. These “two-percenters,” unnerved by the most recent recession, are trading down to less-expensive offerings from Coach Inc. and Ralph Lauren Corp. (RL) rather than pricier goods from Prada SpA (1913) and Giorgio Armani SpA. Even with the stock and real estate markets rebounding, they’re not draining their wealth again, and the shift may prove challenging for the highest-priced brands that can no longer lean on credit card-fueled aspirational customers.

Click the link to read the entire article which includes a quote from Milton Pedraza, CEO of Luxury Institute:
http://www.bloomberg.com/news/2013-05-15/u-s-2-percenters-trade-down-with-post-recession-angst.html

January 26, 2012

Luxury Real Estate Marketing: Is Customer Service a Luxury?

By Ron and Alexandra Seigel
Real Blogging
January 25, 2012

“The greatest danger for a luxury firm is to lose its status as a differentiated, premium brand, but wealthy consumer perceptions suggest that luxury overall may be in danger of losing its cachet,” said Milton Pedraza, CEO of the Luxury Institute. “This calls for a renewal of efforts to be unique and exclusive and to execute well on customer service.

The most frequently cited qualities that define luxury-superior quality (76%), craftsmanship (65%), and customer service (57%)-are the areas where wealthy consumers are finding the greatest dissatisfaction. More than half (56%) say that craftsmanship of luxury products is on the wane; 51% say that quality is decreasing; 50% notice a slippage in customer service quality and 48% say that luxury products are losing their design value.”

How does this apply to luxury real estate marketing?  Real estate as a profession is a service business, real estate agents and brokers are service professionals.   As we interview agents across the country for our series 50 Top Luxury Markets in the USA, we find that those who respond immediately to our queries are thriving in their marketplaces and those who want to eclipse the market leaders.  They are easy to access, willing to share their insights, passionate about their marketplace, return calls and emails promptly and are a delight to talk to.   One of the top market leaders recently interviewed said that you have to be nice to everybody regardless who they are or what their status in life.  He returns everyone’s calls personally.  As a result his client lists grows and referrals are plentiful.

Many of the agents we interviewed who are market leaders did not have websites, do not engage in social media, and do not know or care what SEO means or being #1 on Google.  They are differentiating themselves on service, manners and excellent communication skills.   They knock on doors; they meet people day in and day out.  They are relationship oriented.  They network face to face.  They practice the fundamentals of business.  They water plants for their sellers when they are out town.  They send handwritten notes, birthday cards, and take their clients out to lunch.  Tech is not the priority focus in their success equation and in many cases has been relegated to the back burner.

Luxury by definition implies rarity and exclusivity.  Given the results from the Luxury Institute, it is evident that customer service is a key indicator in choosing a brand/service professional.  People will remember you for your luxurious service.  In our practice as branding and marketing strategists, we feel that customer service should take priority, and technology should facilitate customer service.

http://realblogging.com/ron-seigel/luxury-real-estate-marketing-is-customer-service-a-luxury/#ixzz1luBoqj1N

July 5, 2011

Wealthy Americans Upgrade into Pricier Primary Residences in Post-Bubble Housing Market, 37% Own Million-Dollar Homes; Vacation and Investment Property Purchases Also Pick Up Since 2008

(NEW YORK) July 5, 2011 – Amid still-depressed housing numbers that dominate headlines, a new survey by the independent and objective New York City-based Luxury Institute and the Institute for Luxury Home Marketing shows high net-worth U.S. homeowners taking advantage of the downturn to trade up into higher-priced new primary residences. More than one-third (37%) of the wealthy value their homes at $1 million or higher, while 32% assess their primary residence to be worth $500,000 or less.

Lured by lower prices, one in four U.S. consumers with annual income of $150,000 or more have bought a residential property since 2008 at a median purchase price of $509,000, up 3.2% from the 2005 to 2007 period. Most new residences (83%) are single-family homes and two-thirds of these are in suburban settings. Seventeen percent plan to purchase additional property this year, while 23% of those younger than 50 plan to buy in 2011.

Seventy percent of wealthy homebuyers used a real estate agent to help with their property purchase and two-thirds of those say that they would work again with the same agent.

“Luxury homebuyers recognize that many premium homes are available at relative bargains,” says Milton Pedraza, CEO of the Luxury Institute.  “Similar to the luxury retail landscape, luxury home sales provide more evidence of durability at the high end of the market.”

“Luxury is the good news story in real estate,” says Laurie Moore-Moore, CEO of The Institute for Luxury Home Marketing. “The number of wealthy households has jumped back to pre-recession levels and affluent home buyers are actively purchasing. The National Association of Realtors’ statistics show that national home sales at $1 million and above were up more than 18% year-over-year in 2010.  Strong activity continues this year as well.”

For complete details from this WealthSurvey on wealthy homebuyer attitudes, plans and marketing preferences, visit LuxuryInstitute.com.

About Luxury Institute (www.LuxuryInstitute.com)

The Luxury Institute is the objective and independent global voice of the high net-worth consumer. The Institute conducts extensive and actionable research with wealthy consumers about their behaviors and attitudes on customer experience best practices. In addition, we work closely with top-tier luxury brands to successfully transform their organizational cultures into more profitable customer-centric enterprises. Our Luxury CRM Culture consulting process leverages our fact-based research and enables luxury brands to dramatically Outbehave as well as Outperform their competition. The Luxury Institute also operates LuxuryBoard.com, a membership-based online research portal, and the Luxury CRM Association, a membership organization dedicated to building customer-centric luxury enterprises.

About The Institute for Luxury Home Marketing (ILHM) www.LuxuryHomeMarketing.com

ILHM is an international training and membership organization serving real estate professionals who work in the luxury housing market. ILHM awards the prestigious Certified Luxury Home Marketing Specialist (CLHMS) designation to those who meet strict performance criteria. The designation is the official designation for a variety of national and international real estate brokerage brands. ILHM training is available through live sessions and online.
214-485-3000
info@LuxuryHomeMarketing.com

For Further Information, Please Contact:
The Luxury Institute, LLC
Martin Swanson
Vice President
(914) 909-6350
mswanson@luxuryinstitute.com

March 14, 2011

Christie’s auction brand may help local realtor Hall & Hunter

By Greta Guest
Detroit Free Press
March 12, 2011

Christie’s, the word’s largest auction house, has launched a real estate branding effort that could help local affiliate  Hall & Hunter Realtor of Birmingham boost sales.

Earlier this year, Christie’s changed the name of its real estate division from Christie’s Great Estates to Christie’s International Real Estate, a move aimed at giving its luxury listings global exposure.

While Christie’s isn’t part of the Hall & Hunter name, the local brokerage’s connection to Christie’s helps it compete with SKBK Sotheby’s International Real Estate in Birmingham for the area’s most luxurious home deals. Other rivals include Max Broock Realtors, Coldwell Banker Weir Manuel, Re/Max New Trend and Real Living Cranbrook.

“Sotheby’s and Christie’s are two truly premier names,” said Milton Pedraza, CEO of the New York-based Luxury Institute. “It does give you a significant edge.”

Birmingham homeowner Sarah Deson-Fried and her husband, Harold Fried, decided to sell their $3.695-million custom home with Hall & Hunter’s Meredith Rands Colburn, an associate broker.

“I chose Meredith and luckily enough she was affiliated with Christie’s,” said Sarah Deson-Fried on a recent tour of her home. “I wanted a brand that would appeal to true luxury buyers.”

The couple, both attorneys, built the French-inspired home in 2002. The house has four bedrooms, five bathrooms and 6,324 square feet.

It features a solid mahogany front door with an etched glass insert, travertine flooring on the first and lower levels and a hand-forged wrought-iron handrail on the curved staircase. The kitchen features Italian pistachio-green Valcucine cabinetry and a solid walnut floor.

Hall & Hunter remains an independent brokerage, yet met the criteria to become a Christie’s affiliate and works under its guidelines. In contrast, Sotheby’s real estate arm is a franchise system in which local brokers take on the Sotheby’s name and use it to market all its properties. The Christie’s name only goes on local properties listed for sale at $750,000 and above.

Dennis Wolf, Hall & Hunter’s CEO, believes the affiliation with Christie’s brings amazing business. Ten months ago, the owner of 300 acres on Lake Michigan picked up a Christie’s brochure that led to listing the property with Hall & Hunter for $34 million.

Don’t expect Wolf to divulge his client roster — which has included automotive executives, business owners and professional athletes. “We deal discreetly with the clientele.”

The brokerage, founded in 1954, has always sold upper-end real estate. It was affiliated with Great Estates, a network of luxury realtors based in Santa Fe, N.M.

Christie’s ventured into residential real estate in 1995 and purchased Great Estates.

“What Christie’s brings to the table is obvious,” Wolf said. “What they brought to the table is the ability for us to market the properties not just locally but internationally.”

Christie’s real estate affiliates pay annual fees and then pay to advertise their properties in the Christie’s glossy magazine in which a full-page ad costs $3,400 and includes a listing on the Christie’s International Real Estate Web site, www.christiesrealestate.com.

Nearly 90% of the houses listed on the site are priced at $1 million and up, said Gregg Antonsen, senior vice president of Christie’s International Real Estate. And affiliates can join the Christie’s network by invitation only.

Christie’s International had sales at auction of $5 billion in 2010. Sotheby’s had sales of $4.8 billion from auctions last year. Neither reports residential real estate sales.

J. Bradley Wolf, vice president and associate broker for Hall & Hunter, said roughly 5% of the firm’s clients use its full services, which can include auctioning some of a home’s contents.

“One of the services we offer for clients with a lot of art work or jewelry is we can have someone come out from the auction house in New York to appraise things,” he said.

The image of the auction houses suffered as a price-fixing scandal sent A. Alfred Taubman, founder of Bloomfield Hills-based Taubman Centers, to prison in 2002. In addition to Taubman starting the shopping center company, his family had a controlling stake in Sotheby’s, which he sold in 2005 amid the controversy.

Still, Christie’s and Sotheby’s still have enormous clout among the wealthy, said Robert Passikoff, president of Brand Keys, a New York-based consulting firm.

But those luxury brands don’t necessarily impress the masses.

Mike Bernacchi, a University of Detroit Mercy marketing professor, said the auction house names rub off only on the well-heeled consumers and homes.

“It is a good demarcation for anyone who is interested … that is not everybody,” Bernacchi said.

http://www.freep.com/article/20110313/BUSINESS04/103130379/Christie-s-auction-brand-may-help-local-realtor-Hall-Hunter

December 30, 2010

Wall St bankers, publicly modest, eye fancy toys

Wall Street execs research pricey goods ahead of bonuses
* Red Ferraris, Hublot watches still on most-wanted lists

By Phil Wahba
Reuters
Wednesday, December 29, 2010

NEW YORK, Dec 29 (Reuters) – Wall Street executives may face smaller bonuses and a public that still eyes them with suspicion, but that isn’t stopping them from rediscovering their love of luxury cars, oceanfront homes and private jets.

A soaring stock market, a surge in merger deals and an uptick in hiring on Wall Street are allowing bankers to gradually return to the lavish lifestyles they enjoyed until the 2008 financial crisis came crashing down on their party.

Despite talk of bonus cuts, many businesses that cater to bankers’ whims, such as the luxury car dealerships on Manhattan’s Park Avenue, are teeming with Wall Street suits.

“Even if they are worried about bonuses, their egos are involved here,” said one dealership manager, who said requests have been filing in for $225,000 crimson red Ferraris and $170,000 Audi R8 convertibles.

Wall Street paid out $20.3 billion in bonuses for 2009, and the numbers for 2010 are expected to be up modestly, according to various estimates, including one from New York’s comptroller.

Hedge fund managers and investment bankers who advise on mergers should see some of the biggest increases, while bond traders can expect cuts of as much as 30 percent.

Financial industry employees will find out in January how big a bonus they’ll get, and those who aren’t sure if they’ll get much seem to be waiting before they spend lavishly.

Nonetheless, there are enough Wall Street tycoons expecting big paydays to feed luxury spending.

Swiss-made Hublot watches, which cost 6,500 euros ($8,500) on average, are still regarded as success symbols and remain popular in London’s City and on Wall Street. Chief Executive Jean-Claude Biver of Hublot, part of LVMH (LVMH.PA), told Reuters that December would be a record month.

“They still want their toys,” Luxury Institute CEO Milton Pedraza said of bankers.

Financial industry honchos have wasted no time lining up rentals months in advance in the Hamptons, a string of seaside hamlets on Long Island where New York’s elite summers.

One top banker shelled out $200,000 to rent an oceanfront house in Amagansett on Long Island for the month of August, said Paul Brennan, a Prudential Douglas Elliman broker.

Wall Street’s money is trickling back down to companies like Avantair (AAIR.OB), which offers private jet timeshares. John Colucci, Avantair’s executive vice president, said inquiries are up this year though many are waiting for their bonuses before actually committing.

Click the link to read the entire article: http://www.reuters.com/article/idUSN2927380420101229?pageNumber=1

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