Key Highlights
- Condos in hot locations may serve as market “placeholders” until ideal properties become available
- Think of condos in hot locations as “starter homes” for strategic positioning
Encourage Your Buyers to Compromise in Hot Lux Market
When “ideal” lux properties such as $25M ranches in Old Snowmass are increasingly unavailable to luxury buyers, what’s an enterprising real estate agent to do? Encourage your lux buyers to compromise
Compromise? Do luxury buyers even know the meaning of the word “compromise?” They will when you explain the word in terms they can understand.
Inventory Realities Forcing All to Think Strategically
2020 pandemic demand has continued just as wildly into 2021. The results are ever-scant inventory at all price points and ever-higher prices.
Strategic thinking may involved settling and waiting…luxury buyers wanting turnkey compounds in their “favorite destination” spots may just have to settle for a condominium or a fixer-upper just to “get in” to their favorite destination and then wait until that ideal compound becomes available down the road a bit.
According to Chris Leavitt, aDouglas Elliman agent in Palm Beach FL, said, “…people are grabbing whatever they can (just) to get a foothold, to get a residence down here.”
Canny Market Strategy
Buying whatever property now as a “placeholder” can leave buyers well positioned to upgrade later in a highly competitive market
Ryan Dickey, an agent with Windermere Real Estate, an affiliate of Luxury Portfolio International in Park City UT, believes that having a physical presence in a preferred market means owning something as either a rental income source or smaller residence. That way the client keeps up with local price appreciation with or without any rental income.
Ashley Copeland, an agent with Brown Harris Stevens in Palm Beach, agrees. Copeland said, “I’m definitely telling people to look for a condo as a starter home.”
Copeland continued. “Besides just getting in and finding a place for the time being until more homes come on the market, you’ve bought a condo which is inevitably going to go up in value by next year. So you’ve effectively lived here for free and (you’ll) make a nice profit on the condo when you sell it in a year or two to buy a home.”
Owners of “Any” Property in Market Hot Spot Have Home Field Advantage
Most agents agree that owning an existing property (be that property serving as rental income or residence) in a hot market offers those buyers distinct advantages over out-of-towner buyers. Quite simply, it’s easier for “local” owners to find off-market deals via their agents…”local” owners are seen as already committed, serious buyers who are ready, willing and able to pull the trigger when the time comes.
According to Riley Warwick, co-founder of the Saslove & Warwick team with Douglas Ellimann in Aspen CO, said, “When there’s an area where you ultimately want to be…we’re seeing buyers (who already own locally) as being much more focused and more prepared when something does become available.
Help your lux clients become “more focused and more prepared” by helping them see the virtues of compromising by “settling and waiting”with a placeholder property.
Thanks to MansionGlobal.
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