There are four vital statistics that every agent needs to know when selling luxury properties.
- Understand what luxury home prices start at in your market. I know certain people define luxury properties as anything above $1 million across the board. But, this simply isn’t fair. $1 million in Silicon Valley will get you a lot less than $1 million in Iowa. That being said, you need to understand the analytics for your market. My own team and I define the luxury market as anything that is at least three times the average sale price for a given market.
- Know how many months of inventory there are for luxury homes in your market. A given area might be a seller’s market overall, but the luxury market within that area could be seeing completely different conditions. While the market in general for a certain location might have very little inventory, for example, the luxury market in that area might have 12 to 16 months of inventory. As a reminder: a buyer’s market is any market where there are seven months of inventory or more; a seller’s market is a market with inventory levels at four or fewer months; and an even market has between five and six months of inventory.
- Know what price point a buyer’s market starts at. This could be a price point above or below the threshold of the luxury market, but most markets will have a point where buyers are in control.
- Understand list-to-sale ratios.In other words, if a home is listed at $1 million and it sells for an $850,000, that would constitute a 85% list-to-sale ratio. It’s important to be informed about current list-to-sale ratios in both the luxury and general market.
These tips will all be vital to your success with working in the luxury market. If you’d like more tips for getting started in luxury real estate, check out www.luxurylistingspecialist.com.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.