I read an interesting article last week claiming that our upper end real estate market in Leon County is in a slump. The underlying tone of the article was that ‘Luxury Homes Won’t Sell.’ This caught me by surprise considering that our firm has had one of its strongest years when it comes to listing and closing high end properties.
In fact, we have been able to set the bar for some of the highest price per foot sales on luxury homes our community has seen, historically speaking.
All of this being said, it is important to note that our unique Tallahassee real estate market has a small percentage of active buyers seeking homes in excess of $800,000.
So, to understand that the higher end home does need longer market exposure than the average price point of $300,000 to $500,000 is a given and has always been the case in our community.
Therefore, when we do offer these luxury properties we must understand exactly who the target market is and through what avenues we can best reach them. We must think outside of the box and use a different philosophy to attract well qualified buyers; mainstream advertising is often not the most effective.
It is also important to make sure that prior to a luxury home being placed on the market that the property has been well staged, appropriately priced, and is in prime showing condition.
I decided to dive into the facts of this hot topic and I think it of importance to share this information with the public. Below are some enlightening statistics that I think you will find refreshing as it relates to our luxury home real estate market.
Homes from $800,000-$1 million
First, let’s take a look at homes priced $800,000 – $1 million: In 2017 year-to-date homes were selling at an average of 94.5% of their listing price. Fast forward to 2018 and you’ll find homes of this price point selling for an average of 97.5% of their listing price.
Essentially, the negotiating margin has been cut in half on behalf of luxury home sellers— meaning that for a home listed at $950,000 in 2017 it would have been reasonable to expect a sales price of $897,750.
In 2018, we could expect to see that same $950,000 listing sell for $926,250, netting an additional $28,500 for the seller. In addition to a higher list price to sales price ratio, 2018 has also brought with it a 30% rise in the number of homes sold in this price point.
Homes from $1 million-$1.5 million
Now we evaluate homes priced from $1 million – $1.5 million: In 2017 homes of this value sold at an average of 90% of their listing price after being on the market for an average of 111 days. This year-to-date, homes of this price point are selling at an average of 92% of their listing price after being on the market for an average of only 75 days. And you guessed it, the number of homes sold in this price range have also gone up — by 17%!
This demonstration shows us that 2018 offers luxury home sellers a better outlook than 2017 as it relates to not only list price to sales price ratio, but also their average time on the market.
Knowledge of the facts is always the best tool in determining when is the right time to market your high-end home. Selling luxury homes is a specialized niche. It is important to find the right broker or sales agent who knows how to effectively market these unique properties.
Jason Naumann is broker/owner with The Naumann Group Real Estate, Inc. Contact him at 850-933-0328 or email firstname.lastname@example.org.
Naumann, Jason, Guest Columnist, “Tips for Navigating the Luxury Real Estate Market”, Tallahassee Democrat, Page E06, 11 Aug. 2018