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October 22, 2014

Insights Into Luxury: New Survey Offers Snapshot of Pricey Market

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Insights Into Luxury: New Survey Offers Snapshot of Pricey Market

Long listing contracts, selling times are norm for high-end homes

If you've always viewed the high-end residential market as a mystery, we’ve pulled back the curtain to show you how those with the Midas touch are changing the listing and selling of luxury properties into gold.

To give you a peek at that chic milieu, the National Association of REALTORS® in 1997 conducted a joint study--Profile of the Luxury Real Estate Market--with Unique Homes magazine that looks at the luxury real estate market.

Here are some of the things REALTOR® respondents told us.

  • Sixty-eight percent report a gross personal income of $100,000 from all real estate activities.
  • Forty-eight percent indicate their average contract length is between seven and 12 months. Thirty-one percent say their average contract length is one to six months, and 21 percent report it’s between one year and two years.
  • The average selling time for 45 percent of respondents is between seven and 12 months, 26 percent say it's between one and six months, and 24 percent say it’s between one and two years. Three percent take longer than two years to sell a listing, and 2 percent take one month or less.
  • More than half of the respondents are affiliated with a national franchise.
  • Most respondents--87 percent--are members of NAR's International Section, and 16 percent are members of the Appraisal Section.
  • If a respondent holds a designation, it's most likely to be the GRI(47 percent), followed by the CRS® (39 percent).

Internet Fast Facts

  • More than 90 percent of respondents list properties on at least one Internet site
  • 74 percent list their properties on their own company's Web site
  • 24 percent list their properties on their own Web site
  • 20 percent of those who list properties on the Internet say they generate 5 percent of their business from the Internet

Source: Profile of the Luxury Real Estate Market, April 1998

What a Luxury Specialist Looks Like

The typical luxury specialist is a 52-year-old female affiliated with a franchise that has three offices and a sales force of more than 50 salespeople. Three percent of her company's luxury home sales stem from intercity referrals.

Years in the business 17
Years working the luxury market 11
Hours worked per week 50–59

Source: Profile of the Luxury Real Estate Market, April 1998

Promotional Tool Kit

Respondents say referrals are the most important tool in promoting and selling their luxury listings, giving it a 4.3 ranking on a scale of 1 to 5. They typically spend between $500 and $799 a month on marketing themselves and their listings. The table shows how they rank other top marketing tools.

Print advertising in magazines 3.90
Four-color brochures 3.87
Print advertising in newspapers 3.75
Yard signs 3.69
Direct mail 3.29
Internet 2.92
Open houses 2.58
Broadcast media 1.90

Source: Profile of the Luxury Real Estate Market, April 1998

Price of Luxury

What is a luxury property? The definition varies from market to market, say respondents, from a low of $500,000 to more than $2 million.

About $500,000 (21%)
$500,000 to $1 million (40%)
$1 million to $2 million (19%)
More than $2 million (20%)

Source: Profile of the Luxury Real Estate Market, April 1998

More: High-End Marketing: Don't Even Think of Scrimping on Quality Promo Materials--Five Secrets of Luxury Selling

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