Many homeowners intent on selling a luxury residence in the near future are watching economic indicators nervously. They fear a possible recession could undermine their odds of a successful sale.
But housing economists offer calming projections for such sellers. They say it’s unlikely the next recession will cause home values to drop as they did during the Great Recession of a decade ago. The only impact would likely be to slow the velocity of sales.
Sarah Mikhitarian, a senior economist for Zillow, which tracks real estate markets throughout the country, has reassuring words for sellers intending to liquidate a luxury property in the near future.
“Yes, economists largely agree that a recession is on the horizon within the next year or so. But home values shouldn’t be heavily impacted this time,” Mikhitarian says.
The major reason the next recession will likely have less impact on housing is demographics. The millennial generation of buyers, who are now in their mid-20s to late 30s, are currently moving into their prime home-buying years.
Of course, relatively few young adults can afford a luxury property in a high-demand area. But those who can don’t have as many properties from which to choose as did upmarket buyers making a purchase prior to the last recession.
Still, Mikhitarian cautions luxury homeowners that it could take longer to sell their property in coming months, due to a weakening economy.
“Don’t stress out if your home doesn’t sell right away,” she says.
Here are a few pointers for those seeking to sell a high-end home in the near future:
-- Engage an agent who specializes in luxury home sales.
Many real estate agents have the expertise to market average properties. But fewer have experience selling upper-echelon homes, says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”
In searching for an agent, he recommends you look for someone with a network of friends and associates who travel in affluent social circles.
“Word of mouth is a huge element of success when it comes to selling expensive property,” Nash says.
How can you find the appropriate agent to help sell your luxury house?
“There’s no substitute for strong referrals. Try to find people who’ve been successful selling a high-end home and ask who they hired to represent them,” Nash says.
After you’ve assembled a short list through references, he says you should do in-depth interviews with all the agents on the roster before making your final selection.
“Request details about their marketing plans and how they’ll follow through to close a sale,” says Nash, noting that buyers of high-end houses typically expect more help with their housing transitions than do average purchasers.
-- Evaluate various pricing opinions.
As a basis for pricing, the owners of any For Sale property should analyze the results of comparable recent sales. But home sellers in the upper echelon usually need to make more adjustments.
“Don’t just rely on your one agent for a recommendation on the appropriate list price. Ask the agent to draw colleagues from the same office into the discussion and maybe their broker, as well. That way you’ll get more of a consensus on the correct price,” Nash says.
If in doubt on the appropriate price for your luxury home, Nash says you should move to the lower end of the suggested range.
“Because of the changing market, you really have to resist the temptation to price high. The buyers of these houses may have money. But they always seek to negotiate a good deal for themselves,” he says.
-- Underscore the quality of your local schools.
Though it’s not universally the case, most luxury home communities are served by public schools with good reputations. Also, many are within a short drive of private schools that are widely admired.
Given that school quality is important to buyers in all income categories, make sure the marketing materials developed to sell your home highlight statistics that show the strength of the local schools.
“Also list the tuition costs for the nearby private schools to show potential buyers how much they’d save if they sent their kids to public schools. Many people appreciate a bargain in education,” Nash says.
-- Put a huge emphasis on curb appeal.
A handsome front door with polished brass hardware and meticulously pruned shrubbery are status symbols that matter for many high-end buyers.
Though no home seller should expend a fortune to make a property more appealing to prospects, a sizeable investment in curb appeal could help hasten the sale of a luxury home.
“In some rare cases, even investing in that circular driveway with the fountain in the middle could be justified if it gives your house killer curb appeal,” Nash says.
(To contact Ellen James Martin, email her at email@example.com.)