So long 2013, welcome 2014

HNY Clean the slate and reset the clock. But before we start jotting down notes on the agenda and activities on a business plan, let’s take a few minutes to go back in time. Below, I propose to bring you back to 2013. To do that, I have selected a key sentence from nearly each one of my weekly blogs. Let’s revisit together the events we witnessed during the year we just left behind. Here goes the long recap, starting exactly a year ago and stretching through the end of 2013:

  • The US is still incredibly attractive to buyers looking for a safe-haven, a safety net for long term real estate investments, a friendly land to create a business and a wonderful place to live and raise a family…
  • Guess what the most notable word will be in 2013: “Fiscal”… We did avoid the “Fiscal Cliff” this time. Good. Now, let’s deal with the other cliffs: growing deficit, rising debt ceiling, etc. What cliff do you like better?…
  • The market is poised for a welcome price appreciation this year. Hopefully this will prompt more sellers to put their homes on the market and provide impatient buyers with an opportunity to pick & choose in all price segments…
  • Going forward, it is reasonable to assume that we are going to ride this economy like brand-new drivers who push the brake pedal and the accelerator at the same time, jerking the passengers back & forth…
  • We are not even done with the first month of 2013 and the real estate activity is already in full swing. The calendar says “January” but it is “March Madness” that we see…
  • There is a heck of a lot more than Rio’s Festival and the magical beach of Copacabana that comes to mind, today, when thinking about Brazil. It is a wake-up call for all of us looking to samba in a new real estate “Mecca”…
  • We are supposed to care enough for our sellers to look all over the world map for the best buyers. That’s what marketing is all about. In that respect, let me suggest that the fact that so many buyers come from foreign lands is the “New Normal”. It is a new paradigm…
  • In many countries, Realtors are resisting cooperation in the name of self-preservation, oblivious to the fact that, at the age of consumerism, full-accurate-free & fast information is not an option…
  • Four of the top 5 global cities in terms of investment dollars are in the US. A survey from the Association of Foreign Investors, listed New York as the most wanted city in the world. It is followed by London, San Francisco, Washington DC and Houston…
  • Wealthy consumers now have a different focus. What matters most to them in a home today is quality & craftsmanship. Gone are the days when the “best price” was the number 1 criteria to guide their choice…
  • 36% of homes sold last year were all-cash deals. The percentage was just short of 30% in 09 and was 15% in 07…
  • I don’t mean to scare anybody, just merely bring all of us back to reality… Let’s face it, good things don’t last forever. Sooner or later, mortgage financing will be more expensive…
  • The world is shifting. There is a quiet but merciless competition developing in between countries & towns of the New World and those of the Old World for real estate buyers & investment dollars…
  • Time to sell! Anybody disagrees? No? Good! I am glad we all agree. So explain to me why we are still suffering from a lack of listings most everywhere in the US?…
  • What is driving the construction business? Have you noticed how much new homes of roughly the same sticker price look alike? Sure the style of the façade & roof line vary, from French Country to Cape Cod, to Tudor… But when you get inside, more often than not, it’s the same picture…
  • Since 2011, we have seen a slow but steady recovery in the residential market. Healthier real estate firm’s P&L statements are here to prove it. Even though listings are still scarce, unit sales remain at a high level and the $ volume is going straight up thanks to a fast rise in prices…
  • One of the crowd-pleasing initiatives the French government has been promoting is to raise taxes on the wealthy. Nice concept to gain popularity, but the French pushed it to the “guillotine level” by announcing a …75% tax rate. Those who own pricey homes can’t pack their bags fast enough to leave the “fiscal inferno”…
  • The extraordinary growth we experienced with our Prestigio global marketing program came as no surprise. Real estate has changed. Technology has caused the world to shrink. Local is now Global. The chances you will sell a trophy home to a foreign national or an out-of-state buyer far exceed the chance to sell to a “local”…
  • US lenders don’t know what you do with your money after you change your charge-card account to a foreign address. The FICO score will die 6 months down the road. Forget about obtaining mortgage financing on your would-be next home if you let the clock tick too long…
  • The timing for buying in Tokyo reached a zenith. The reason is not the infamous “Lost Decade” of the 90’s which cleaned out lots of savings, or the restrictive policies put in place to curb speculation, or the global economic slowdown of 2000. No, the reason is just the on-going slide of the yen on the currencies market…
  • Is the sequester arbitrary? Sure. Given the choice, it would have been better to tailor the cuts to our needs and means. But the thing is… There was no choice. And, as it may turn out, a bad decision may be better than no decision at a time when billions are piling up in the deficit column…
  • If we wait for the business pulse to beat at the same tempo all over the US map, we may be in for a long wait. In the meantime, we will miss extraordinary opportunities to benefit from the obvious real estate recovery…
  • Now that the residential real estate market is hot again, and prices are either rising or, at least, stabilizing, weekend homes are looking awfully attractive…
  • The real estate picture in Spain is bleak. In a country where the rate of home-ownership exceeds 80%, prices have fallen 30% over the last 5 years and are expected to lose another 5% this year. A huge fraction of the housing stock is in foreclosure…
  • Last year, the top 1000 agents in the US, combined, sold a record $50Billion worth of homes… An average of $50M per agent! Now, please, keep in mind that we are talking about the best of the best here, hardly 0.1% of the agents’ population…
  • The strange thing is that, somehow, we got so used to the harsh economic realities and the somber prognostics, that many of us swallowed the Fed’s stimulus & easy money policies like an attractive substitute to a free economy…
  • We can observe a considerable difference in the real estate market between the various states & regions. Some have yet to absorb and digest a massive wave of distressed properties, while others have left the crisis behind and are enjoying a market they had not seen in 7 years…
  • Do you pick your Realtor based on relevant findings about the individual and his/her firm? Or do you follow your heart and intuitions? Or do you play Russian roulette, shake hands with the first agent who comes around, cross your fingers & hope for the best?…
  • I am a lucky guy. Over the years, I had the privilege of working with many of the most successful Realtors in the country specializing in the luxury market. All of them are still around today, and so am I. It’s a good sign…
  • How to decide who, as an agent, do you want to work with? The options are open, based on such criteria as experience, batting average, market knowledge, company’s affiliation, etc. Often, what may proved to be the most important ingredients are overlooked: chemistry, enthusiasm and optimism…
  • The real estate activity is still pretty good but we have the feeling that the speed of recovery is stuck in 3rdgear while we expected to be in 4th. What’s between the foot and the accelerator pedal?…
  • In any town, state and country, you basically have 3 different markets. Each one is defined in relation to the local median price. You have the “low-end”, the “average” or core price, and the high-end. Each one moves at its own tempo and enjoys or endures different experiences…
  • There is little doubt Chinese buyers have had and still have a major influence on our recovery. This is particularly true at the high-end, the segment of the market which eventually pulled residential real estate out of 5 years of misery…
  • There is a mystery that puzzles me. In years past, when a big IPO hit the street, you could count on a raid on luxury homes 6 to 12 months later, when the jackpot winners could cash their interest without leaving too much to Uncle Sam. This year, we have not seen the demonstration of the theory…
  • The desire to bring “indoor” to the outside, or “outdoor” into the house, is reflected in many of the most striking homes recently built, everywhere, irrespective of the climate conditions…
  • Bermuda offers the magic combination of being exotic & civilized. Good feeling when you are on vacation. Better yet when you have a pad there to go to from time to time. Not many foreigners do though. The truth is that not too many can. At least could not…Times are changing in Paradise…
  • We can feel the wind of financial freedom blowing over China. It’s only a breeze, but it feels good nonetheless. It represents a welcome omen for the many Chinese now jumping through hoops to find a way to get money out of the country to purchase real estate in the US…
  • Last week, I was at a power meeting with lots of real estate brains. When asked about their take on next year, the popular answer was “cautious optimism”. It’s like saying that you look forward to a good year, but with your fingers crossed. I know the feeling…
  • Real estate is dependent on its environment. It can benefit from an economic momentum or be victimized by anything that can disrupt it. With a fragile recovery in need of an energy booster and the future as clear as the London fog, doing business can be a challenge…
  • A house cannot be considered high-end if it is located in an area which is not regarded or perceived as high-end. It may be a terrific home but good looks are not the most important factors…
  • If you want to eventually be recognized as a high-end player, you first need to be recognized to begin with. If you devote most of your activities to your primary market, you will soon become known as a local expert. That’s the first step on the way to becoming a local hero in the high-end…
  • When money opens all the doors, what are the most desirable places in the world to buy a second home? According to buyers from China, Russia, the Middle-East, the US, Europe, Japan, Brazil… the French Riviera is at the top of the ladder…
  • Just returned from a trip to Asia, hopping from Hong Kong to Singapore, then to Vietnam. Asia is fascinating. So many of these countries are developing so fast that, by comparison, one gets the feeling that we are hardly moving…
  • The stock market believes in Santa Claus! Closing records have been falling lately. Maybe the market caught the holiday spirit. No matter, it’s comforting to see that, as we are about to turn the last page of the calendar, optimism has conquered Wall Street. Next: Main Street. That’s the program for next year.

Alain Pinel The Luxury Insider

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