Luxury Clues

Real Estate Marketing Theme for 2010: "Real Estate Still the Best Shelter"

As we approach the final two months of the year, it's important to start preparing for 2010. As I look at the mind-boggling amount of debt that is piling up in Washington, the rise of gold, and the decline of the dollar, the question many people are asking is, "where is the best place to put my money?" The banks certainly are paying much of a return and the stock market is much to volatile for my taste. If the government decides to print a lot of money, we will have increased inflation. The result will be our savings and stocks will be worth less. In contrast, commodities such as gold and real estate normally keep pace with or exceed inflationary rates over extended periods of time. 

Real estate has taken a huge hit. Interest rates are at all time lows. When I started in the business in 1978, rates were at 9.75 percent and soon hit 10 percent. We had an awesome market. This is the best time in our lifetimes to be a buyer. If a buyer can qualify with a lender or get private financing, real estate is one of the best hedges against inflation.

Let me give you an example. I inherited some property from my parents. The value in 1998 was $168,000. Granted that it is in California and about three years ago, was worth close to $600,000. Today, the property is worth in the $375,000 to $400,000. That's over a 100 percent increase in eleven years. If I had liquidated the property and put it in the bank, I would have about $225,000. 

There's a reason that investors are snapping up properties left and right. The big fortunes have always been made by those who are contrarians--they buy when others are selling, and sell when others are buying. 

Consequently, as you create your marketing plan for 2010, show people the cost of renting vs owning (use online mortgage calculators). People who pay down their mortgages have a source for paying for retirement, sending their children to college, or paying emergency medical bills. It's never been more true than right now: "Real estate is still the best shelter." 

Posted by Bernice Ross, author of the #1 Selling Book at NAR 2008, Real Estate Dough(R) Your Recipe for Real Estate Success. 

Act Now to Stop High Gas Prices!

The cost of oil cuts across every aspect of our economy. More importantly, it’s hurting millions of Americans who are struggling to make ends meet. I have friends and members of my own family who live on only their Social Security. What scares me for them is how are they going to heat their homes this winter? Are they going to have enough money to buy food and the medications that keep them alive?

    

A few days ago, I was in our local Office Max picking up some copying. I was talking to the young man who was helping me. He said he was saving for a home, but now the money he could have saved was going to pay for gasoline. The high costs hurt our client’s ability to make that first down payment or to stay in the homes that they have already bought.

            

What’s frustrating about this is that we’re begging the folks in the Middle East to produce more oil when we’re sitting on billions of barrels here at home. Did you know that a recent find in North Dakota and Montana has 400 billion barrels available? The largest field in Saudi Arabia only has 50 billion barrels. We have proven reserves off our coasts. China and Cuba are sucking out the oil just 60 miles off the shore of Florida.

      

Another major problem is that we have is that we have not built a new refinery in 30 years. The good folks in South Dakota passed a measure that will allow the building of refineries there.

    

Did you also know that the oil companies make four percent in gross profit and that the government takes 15 percent in taxes?

            

These issues are troubling and they dramatically affect our business. I think that everyone is in agreement that we have to take steps to protect our environment and that alternative energy sources are needed. There’s much that each of us can do in these areas. There is one other thing you can do. If you’re part of the 81 percent of Americans who believe that we should, “drill here, drill now, and pay less,” sign the on-line petition at http://www.americansolutions.com/ to get Congress to take action to do something to help us now.

Posted by Bernice Ross

Photo by Cyfer13

New Record for UK Luxury

What does it cost to live between the Prime Minister of England and the Queen? About $280 million (or $12,000 per square foot. Currently, the the world's second-most most expensive home is under construction at "One Hyde Park." The unit will sit a top 82 other apartments with sales prices in approximately the $40 million range. (source: Daily Mail)

Number One Hyde Park is the former home of the Duke of Wellington. It's no surprised that this location is one of the most sought after in London.

Posted by Bernice Ross, www.RealEstateCoach.com The Place You Go to Make Real Estate Dough!(TM)

Photo by LondonConstant

New Record Set for Sale of Two New Luxury Homes in the UK

The London Times is reporting sales of two new homes shattering price records in the U.K. The Toprak Mansion, also known as the "Top Whack Mansion" shattered the record that was set just two weeks earlier by the sale of a property called Palladio. Both properties on the so-called Billionaire's Row in London, home to the Sultan of Brunei as well as members of the Royal Saudi family.

The Palladio property sold for $35 million pounds (approximately $70 to $75 million U.S.) and the Toprak Mansion sold just two weeks later to Horelma Peramam, a billionaire from Kazakhstan for $50 million pounds ($100 to $110 Million U.S.) According to the Times account, Peramam plans to upgrade the property by spending an additional $30 million pounds.

Quite frankly, the four photos don't seem to suggest this high of a price, but then again, 2 acres in the most desirable part of London does have a tremendous lot value.

Posted by Bernice Ross

Photo by Yomanimus

LuxuryClues Up & Running Again

To all of our readers, please accept my apologies if you have commented and did not hear back right away. I was without my laptop for 6 weeks and had to rely on Shane for doing a stellar job of getting my posts up. I'm back at the Wheel with my tablet working again. Thanks for your continued support--lots of terrific posts in the pipeline!

Bernice Ross

Cumberland Harbour: The Premiere Marina on the East Coast

I spent the weekend at the Grand Opening of Phases 11 and 12 for a magnificent development from the Land Resource Company called Cumberland Harbour. It was a complete bash including two complimentary nights at a major Florida resort coupled with unlimited food, unlimited alcohol, helicopter rides, boat tours, massages, a petting zoo, plus a bag full of gifts. I also picked up a baseball signed by former pitching great, Gaylord Perry as well as a couple of hand-rolled cigars from tabacco grown in the Dominican Republic.

Cumberland Harbour, once the marina is built out, will probably become the Premiere Marina on the East Coast. The reason? If you live in Georgia, you can actually get insurance for your boat or yacht. Furthermore, property taxes and insurance rates are 1/3 of what they are in Florida. In fact, insurance is so expensive in Florida that many homeowners are doing without it. In Georgia, these are a fraction of the cost.

Cumberland Harbour is the most westerly point along the East Coast. As a result, the hurricanes tend to cause minimal damage because the Gulf Stream steers them away from this part of the coast. Many Florida boat owners will take their boats to this area to protect them from hurricanes.

What was interesting to watch was how smoothly the whole event went. There were 54 salespeople on site with 54 SUVs, taking potential buyers out to see the yet-to-be developed land. The whole event tapped into reptilian buying codes by giving people the best possible day in terms of fun, food, and great activities including kayaking and bike riding.

Land Resource Company has a total of 11 developments currently in the pipeline in several Eastern Seaboard states. What was also surprising were how many people I spoke with who were investors. Virtually all of them were buying their second or third piece of land. Since Land Resource Company is selling the property prior to putting in the roads and the utilities, the upside potential for investors is quite good. It also means that owners can get a major break on their lot cost if they buy early.

Part of the value proposition is the proximity of a major airport as well as the Mayo Clinic plus having a low cost of living and a low tax rate.

Cumberland Harbour itself is a magnificent subdivision. Over 90 percent of the 1000+ lots are sold, but there are only 30 homes. What I saw was quite beautiful and evoked the classic homes of the Antebellum South.

Here's the great news--you can earn a full 5 percent commission simply for making a referral. Contact me at [email protected] if you have clients or friends who are considering purchasing property where they can retire or build a second home. If they would like to attend an upcoming Land Resource event, Land Resource will cover up to $350 of their airfare plus their hotel accommodations as well as all of the costs of the event. Your clients will have to put up a REFUNDABLE $1,000 deposit to attend.

For any one considering retiring and/or building in Georgia, North Carolina, South Carolina, Tennessee, or West Virgina, this is something they should consider. This is also a great play for investment clients who like purchasing land. Best of all, this will be the most fun they ever had looking at property.

Posted by Bernice Ross

Photos from the Land Resource website

Forbes Top 400 Richest Americans--Entry Price $1.3 Billion

Forbes just published their list of the wealthiest individuals in the U.S. This year, to make the top 400, you had to have earnings of at least $1.3 Billion--that's an increase of over $300 million from last year. This dovetails with the research that Robert Frank reported on in Richistan--the amount it requires to be considered truly wealth continues to climb. The top 10 earners in the U.S. are all male and the bulk are in the computer/software business. Bill Gates tops the list at #1, Larry Ellison of Oracle is #4, Google founders Sergey Brin and Larry Page tied for #5, and Michael Dell was #10. Not surprisingly, Warren Buffet was #2. Oil, gambling, and hedge funders pushed the Walton family (Wal-Mart) out of the top 10. Many of the newcomers at the lower levels were hedge fund managers.

What's got me wondering is the continued slide of the dollar against other currencies. For the first time in 31 years, the Canadian dollar is equal in value to the U.S. dollar. One of my banking friends tells me this is a good thing to pay off all of our debt. On the other hand, you have to wonder whether the slide in the U.S. dollar is hitting the bottom line of these big players. My guess is probably not--they're probably either hedged against the declining dollar or just selling more product because U.S pirces are cheaper.

Posted by Bernice Ross

Photo by Jeremy Johnstone

And you thought your car insurance was expensive!

Luxist has a great series of posts about luxury cars including a link to the Motor Trend blogs about the $1.68 million V12 Lamborghini Reventon that debuted at the Frankfurt Motor show. There's also a post about Steve McQueen's Ferrari that he drove for four years that went for over $2 million on the auction block.

What I found to be particularly interesting, however, was their discussion about insurance rates. I guess those of us who drive run-of-the-mill Jags, Mercedes, and Beamers aren't being hit as hard with insurance. We have our Jag and BMW insured for under $2500 per year. Upgrade to a S-class Mercedes, BMW M5 and M6, or other high end vehicles and look for the price to jump above $15,000. Forbes suggests that you plan on paying about 20 percent of the value of the car. As Luxist suggests, you might want to check out the insurance rates before you decide to lease that superfast racing machine.

Posted by Bernice Ross, www.RealEstateCoach.com

Photo by Catnip Intoxicating

The Reventon, powered by a 650-horsepower 6.5L V-12 and wrapped in CFC carbon fiber composite, has harsh, angular lines down to the spiky arrow nose. With just 20 slated for production and each one of them spoken for, the Reventon is reserved for only the richest, most exclusive customers, but the rest of the world gets to look at it, at least, as it sits on the show floor at the Frankfurt Motor Show this week.

And the Winner Is...

Blogger Connect: Congratulations to our friends Mary Pope Handy and Frances Flynn Thorsen on winning the Inman and Active Rain Blogger Competition! The competition was stiff with a great pool of talented blogging coaches and apprentices competing. The prize was $5,000 which Mary and Fran donated to CARE. This money will go to help bring water and much needed services to many of the poorest women and children in the world. Fran and fellow coach Joeann Fossland took an active role in raising money for CARE through their Women’s Web Giving Circle. For those of you who are interested in haunted houses, Mary has the best haunted blog site in the business. Great job ladies!

Posted by Bernice Ross

Book Review: Richistan-A Must Read!

Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich by Robert Frank is a must-read for any Realtor who works the luxury real estate market. I heard Frank speak at the Luxury Conclave in January.

Frank has spent several years studying the residents of "Richistan," a country that exists inside our country composed of people who have net worths of at least one million dollars. For Richistanis (those who inhabit Richistan) a one million dollar net worth is not wealthy--it's simply being affluent. People whose net worth is $1 to 10 million reside in "Lower Richistan." To move into "Middle Richistan," your net worth must be between $10 million and $100 million. Upper Richistan is occupied by those who have a net worth of $100 million to $1 billion. The most exclusive residents are the "Billionaire's Club."

Richistanis are constantly competing to show that "mine is bigger than yours." They have "400-foot-yachts, 30,000-square-foot homes, house staffs of more than 100, and their own “arborists.” Only in Richistan would you be ridiculed for buying your girlfriend a mere SLK or would the owner of a 100 foot yacht call it a dinghy. To learn how to act like "proper rich people," Richistanis hire "household managers" rather than butlers.

Not only are the paranoid about germs, Richistanis are also paranoid that they don't have enough and could lose it all. Most Richistanis, including many of the billionaires, believe they would feel secure provided they have about twice as much as they have now.

Richistanis have exceedingly complex lives. Frank told a marvelous story at the Conclave about "The Mouse in the House." The principal character in the story said that before he became rich, if he found a mouse in the house, he would sweep it outside with a broom. Now he must contact his "household manager" who will contact the grounds keeper. The grounds keeper contacts the exterminator. The exterminator comes out and removes the mouse from the house. He then notifies the grounds keeper who notifies the household manager who notifies the owner that the mouse in the house has been removed.

This book is your handbook to understanding the psychology of the wealthiest real estate clients. It will give you great insight to what makes them tick. More importantly, it's filled with great stories that both your normal and your Richistani clients will enjoy.

Posted by Bernice Ross, www.RealEstateCoach.com