Thought this blog was so true & very well written!

While the real estate market has seen many changes over the last couple of years, it appears that the luxury market is facing even greater challenges.  While it has become more difficult to sell a luxury property, it is still possible and we are able to get it done!

Here's the Bad News ...  (As reported by the Luxury Home Marketing Institute) The luxury market is facing increasing pressure, aggravated by credit market difficulties in the jumbo mortgage market. As a result, The National Association of Realtors reported that the share of home sales above $750,000 has fallen from 4.4% of total home sales in 2007 to a projected 2.3% of total sales in 2009 (NAR Projection based on partial year statistics). 

Limited loan availability, higher than usual interest rates for jumbo loans (from 150 to 200 basis points higher than conforming loan rates), and stringent loan qualifying requirements have slowed sales of luxury properties.  This has caused the national inventory level of homes priced above $750,000 to rise from 18 months worth in 2007 to more than 40 months worth as of the second quarter of 2009.

The lack of refinancing opportunities, fewer qualified buyers for luxury homes, a growing inventory of unsold luxury homes, and an economy in recession are all creating the "perfect storm" for luxury homeowners who need to sell and can't.  NAR also reported that as of October 2008, the foreclosure rate on jumbo loans was more than double the rate on conforming loans. 

Here's the Good News ... While the above facts are creating greater challenges for us, as Realtors who consider the luxury home market our forte, we are steadily looking for options for our luxury home owners in selling their property.

In fact, we made a trip to the closing table today, representing the seller of a luxury waterfront home today, with a selling price of $1,100,000 here in Hot Springs, Arkansas.

One of the most critical bits of criteria for this home sale was the fact that this luxury home had all the basic necessities  - meticulously maintained, in perfect condition, appraised for the selling price or better, and had a great location.  Knowing that we had a great home that we believed would pass the inspection and appraisal process, along with the fact that we had an extremely savvy businessman as the seller, we began to look at options for him and his wife.

We knew that our seller's first interest was to sell the home outright and move on.  However, in this difficult market, we realized the chances of that were getting slimmer based on the facts mentioned above.  We began to discuss the "trade" option to our seller, as we believed that this would be an option for our savvy seller to reach his final goal more quickly, while he sold his large luxury home, and then scaled down to a smaller, more sellable property.

We then reviewed all the previous potential buyers who had expressed any interest in the home, and believed that we had one that would love to buy the home at a fair price, but he also needed to sell his waterfront condominium (valued around $400,000) at the same time.  We approached this buyer's agent and began discussing a trade option, and to make a long story short ...  it was a perfect match.

The trading of real estate property does take some creative matchmaking skills and extra work, and it can be done as long as we have the two major ingredients ... 1) Great property and 2) Savvy seller willing to consider options.

Debi Jones of the Kennedy Team volunteered as one of the auction items in a local fundraiser for the American Cancer Society sponsored by Reed Plumbing last week.  While Debi was glad to help with a good cause, Debi knew that it would be an interesting evening when she agreed to be one of the Bachelorettes to be auctioned off to an unknown bidder.  Jeff and I (Paulia) attended the big event and enjoyed the show of Bachelors & Bachelorettes as each paraded across the stage, anticipating who would be their next date.  When it came Debi's turn on stage, Debi turned beat red as she stood and watched two nice gentlemen begin a bidding war for her.  Glenn Wilkins wound up as the lucky winner with a date with Debi, and the American Cancer Society appreciated the generous donation he made.

Paulia forwarded an interesting article to me entitled, "Top 10 Fashion Colors for Fall Provide Clues to What's New in Home Décor" from here.

Sellers seeking advice from listing agents who wish to update their properties with the freshest colors can take a look at the fashion industry for direction.  A color palette seen first on the fashion runways is picked-up by decorators and builders from wall paints to furnishings, towels and placemats.  The Top 10 colors for 2009 can be downloaded and viewed here .  This year's color range spans from semi-bold hues to catch a consumer's eye to a collection of subtle, basic colors which coincides with today's economic uncertainty.  All of the 2009 colors are harmonious with each other reflecting our country's desire to 'get back on its feet'.

Color hues range from American Beauty Red, which is described as a 'feel good color' depicting cohesiveness and patriotism.  Fashion designers such as Charlotte Ronson selected the color Iron for her collection, which has been described as today's 'new black'. Iron can be illustrated as a deep gray which pairs well with other metal colors, deep navy and chocolate browns. Ms. Ronson found inspiration with Iron to be "...a Postwar decadence that combines elements of military menswear with feminine tailoring."  Since our country is still embattled in war with Iraq, the color Iron reflects today's cautious atmosphere.  Home décor will also reflect the same.  With widespread hope mirrored through a new President and the change promised, today's hue reflects this tenacious optimism.

"According to Pantone, in this time of economic uncertainty and political change, optimism is paramount and no other color expresses hope and reassurance more than yellow."  The top color for 2009 is Mimosa.

Agents offering advice to sellers choosing to update their homes can refer to the PANTONE® fashion COLOR REPORT fall 2009 for a complete list. 

Home decor updates do not have to be extensive or expensive color changes either. Homeowners can create a table setting with today's hues, change towels, paint a door, add rugs or change-out lampshades for example as each of the listed colors is compatible with each other as well as with most neutral tones.  Builders consulting with decorators, agents and stagers can offer the similar options and can present wall colors reflective of this appealing palette. 

These colors give a fresh new look to properties and just the right colors can set one home apart from another. In today's competitive market, updated 2009 colors may just be that edge agents need to sell a home.

Janine Gregor
Virtual Assistant

Website statistics for our primary web site,  www.BestofHotSprings.com broke another record today!  This site had 76,348 total hits during the month of March.  That tells us that the real estate market is very active and heating up!

 Along with this great news, one of my favorite financial analyst, Dave Ramsey, appeared on Fox News today and gave his opinion on the economy with much focus on the real estate market. Dave believes that the housing market will be the major player in getting the economy back in shape. He called attention to the most recent report on home sales being up around 5% in February nationwide.  He also reiterated the wonderful opportunity for home buyers at this time with terrific interest rates around 4.5%, there is a huge inventory of homes to pick from, and then wrapped it up by stating it's the "best opportunity for buyers in 50 years".  Dave also predicted that the real estate market would be "vibrant" by this fall and "on fire" by next spring.  When asked "if we've hit the bottom yet?".  He stated that he thinks we may have hit the bottom about a month ago and we're now on the upswing.

 I tend to agree with Dave Ramsey, as we are seeing many signs of the upswing.  Let's get busy and have a wonderful 2009.

It's a great week this week in Hot Springs.  The spring weather is here with temperatures in the 70s, the Bradford Pear trees are blooming, the lake levels are back to normal, and the streets are packed with tourists in town for the horse races.  You can feel the excitement!

On top of all this great news, our local Chamber of Commerce made the headlines in the local newspaper with their very positive reports on statistics.  Here's some of the information that they reported earlier this week:

•  Arkansas's unemployment rate is currently 6.4% - much better than the national average at 8.1%
  
  
• Hot Springs unemployment rate is 5.9% - even better than the state & national average, and also improved from Hot Springs' rate 5 years ago at 6.4%
  
  
• Hot Springs experienced a 28% growth in per capita income since 2004.  This is the highest percentage growth in Arkansas.
  
  
• Arkansas experienced a 3.8% increase in tourism in 2008, & a portion of that increase can be attributed to Hot Springs, which saw a 1.54% increase in hospitality tax collections.
  
  
• As a major contributor to the tourism sector of Hot Springs, the Oaklawn Horse Racing Track is seeing higher attendance than virtually ever other race track in the country.  Attendance at every race track in the U.S. is down by an average of 30%, while "Oaklawn" is up 2% over last year in attendance and bets made.
  
  
• Home prices in Hot Springs fell only 0.35%, while Arkansas reported an 8.3% decrease.  Home values are holding in Hot Springs.

  In addition, we are also pleased to report that our web site:  www.BestofHotSprings.com is booming with hits.  We are now averaging 55,000 hits/month over our last year's average at 35,000 hits/month.  This tells us that we have more interested buyers out there.

So let's turn the TVs off and get out & enjoy some wonderful Hot Springs.

Website hits are up!  The Kennedy Team's website, www.BestofHotSprings.com expects more than a 33% increase in site hits by the end of January.  Historically, this website averages 35,000 hits per month.  As of today, with one week remaining in the month, 42,500 hits have been calculated with an average of 1,635 hit per day! That's 470 more hits per day than the usual 1,166! If this increase in web activity continues, and it is expected that it will, The Kennedy Team should have 52,300 hits by the end of January 2009. What a great way to begin the New Year!

The Broker at the main office at Trademark Real Estate, Inc. also reports a swell in activity with increased showings on all of the office listings.

I asked Paulia Kennedy, real estate marketing guru, if she was advertising her listings any differently.  Paulia's reply was, "I recently changed our print ads and focused on a professionally designed general print ad in the homes magazines which is different from the other agents' ads showing just little pictures of houses." 


Paulia continued to explain, "Another reason for good hits on the site has been the attention paid to our holiday gifts that we sent out in December. We received lots of thank you's along with good referrals." The gift that keeps on giving!

Paulia and the Kennedy Team have a number of new listings this month.  I've been posting virtual tours nearly every week. As a result, there are many more Kennedy Team lawn signs out there as well.  Paulia said, "We're also getting more people say they see our signs everywhere... (and we've got more signs out there now)."

Along with these results Paulia is confident that the market is changing for the better. She has seen an increase in buyer confidence, and the Kennedy Team is preparing for a booming real estate market in 2009!

Janine Gregor
Virtual Assistant to Paulia Kennedy

After posting my initial Tough-Love Real Estate Marketing entry, a number of people asked me to clarify the details of a Paulia Kennedy's 'honesty talk' and what the criteria was for 'being choosey'. 

Paulia explained that, "We first determine how motivated they are (if they really want and NEED to sell).   If they say, 'We don't really have to sell' -- then we really do not want their listing. If the need is there, then we spend a lot of time during the interview process explaining the complete process.  We want to make sure they are ready to work with us - which means we need their full involvement and participation in order for us to be successful. We consider the seller the No. 1 person on our marketing team."

Paulia continues, "In order to sell a home, there are 3 things that the seller has control of -- the home must be priced right; it must be in good condition; it must be easy to show.    If the seller sticks their head in the mud and ignores our advice along with all of the ongoing information that we send them after we enter into a listing agreement, such as the showing feedback reports, the ongoing market reports and the competition home reports then we try to amicably exit our listing agreement.  It then becomes only a waste of our time and their own.  We also consider the other factors of the property (which are out of our control) -- location, the actual property, etc.  -- and determine if we think it has a chance of selling."

Resulting in continued, steady sales, Paulia exclaims that many agents are sending their listings to The Kennedy Team knowing that this Tough-Love approach means that the property has a better chance of selling. 

I asked Paulia why outside agents would give up their listings to The Kennedy Team. She explained, "Actually, I think the referring agents' biggest problem is that they do not have good follow-up systems with their sellers.  The agents do not keep their sellers involved - which then causes the seller to be disgruntled.  At that point, the agent has totally lost the relationship which we work so hard to develop and nurture between agent and seller.  So by referring the property to us, I think it is the other agents' way to try to hold on to the deal somewhat and at least earn a referral fee.  We also hear from those sellers we take on that they are seeing our homes all over the internet, with virtual tours, etc., and they wonder why their agent is not doing the same marketing for them.  All of the internet work is standard marketing for us." 

Paulia concludes that, "The Realtors have to work much harder now, and it takes a full team to handle all the work involved with a listing.  And it seems to be a survival of the fittest mode now.  The Kennedy Team saw this coming and we have been fully prepared."

Janine Gregor
Real Estate Virtual Assistant to Paulia Kennedy

I received an interesting email from Paulia Kennedy last week. She explained me, "We're really getting hammered with new listing calls lately -- seems like we've been averaging about 3 new calls per week.  It's getting to be so many, that we really have to be choosey about the properties we list.  We have been deliberately honest, upfront and realistic with the sellers.  Then after the honesty talk, some of them are deciding to hold off on selling." 

Having worked with Paulia for sometime now, I am well-aware of the integrity that defines The Kennedy Real Estate Team, so I asked her to characterize, 'honesty talks'. 

Paulia explained, "It's being totally candid on what we think their property will sell for (with no sugar-coating) and how long we think it may take to sell.  We are upfront about the true negatives of the property that we will have to face.  We come up with a plan on how to offset those negatives.  We fully explain to the seller information they may not want to hear about their property based upon our market absorption rates, our knowledge and experience.  We often suggest they hire an appraiser - especially when they are being unrealistic - or it if it's an unusual piece of property with very few comparables available."

When the market was really lucrative, Paulia and The Kennedy Team would give a similar 'honesty talk' but they were not as adamant with their advice.  Paulia explained that they would often give in to the seller requests and allow them to start off with a higher price - as it was not as critical then.  She added, "The sellers did not seem to be in such desperate financial conditions and the buyers did not seem to be as demanding before."  In this volatile market, The Kennedy Team gives the seller the most realistic news, which more than likely is not what the seller wants to believe is the truth.  This frankness means that Paulia and The Kennedy Team can concentrate on selling only those properties, priced appropriately for their market working only with realistic sellers who fully understood the truth of today's market. 

It may also mean fewer listings but the reality is that the Tough-Love approach has meant stable sales.

Janine Gregor
Virtual Assistant to Paulia Kennedy

When we put our northeast home up for sale a few years ago, I remember the day that the real estate agent caravan stopped our home on agent Open House day.  There isn't much to say here about that day, as it was an uneventful experience.  The agents came, and then they went. So last month when Paulia Kennedy asked me to flag her internet sites to indicate that one of her listing properties was to have an Open House the following week, I didn't think much of her request.  I soon learned that this was not going to be a ho-hum event.

Paulia explained that everyone on The Kennedy Team pitches in for Open House activities to create a rather tasty smorgasbord for the invitees. Paulia wrote, "Our Realtor® Open Houses are Open to all, (the public and the real estate community) but we focus on having the event when it is convenient for the Realtors to come."  Paulia found that after holding a number of Open Houses, her team noticed better attendance on Wednesdays or Thursdays at lunchtime.  She added, "Then we cater the lunch and of course the free food gets them!"

I inquired about more details on the 'free food concept' and Paulia answered, "I've got the lunches mastered with a really good spiral-cut honey glazed ham from Wal-Mart that I bake for about 2 hours - cost is $23 and it feeds about 60 people." Paulia enlightens this conversation in her endearing southern vernacular by emphasizing, "...and everybody brags on it."  The menu does not stop at a glazed ham.  "Then we get rolls from the deli to make sandwiches and sometimes pick up potato salad. Debi (Jones) buys Kroger's great chicken salad that everyone loves and adds additional items and drinks.  Jeff  takes care of loading the drink coolers and putting out the signs.  Even John Watson, our resident handyman helps out with toting and stocking the coolers and then stops in to socialize with us."

I had not heard of such attention paid to an Open House menu.  But, then Paulia explained to me that, "All of the other Realtors rely on the Title Companies and Banks to cater their own Open Houses but we felt like that was misuse of those vendors.  So we do our own catering by ourselves."  Apparently, as Paulia clarified, "It seems that after we provided all the fixings for a few Open Houses, the local banks and title companies have now put their foot down on it with the other Realtors and as a result they [banks and title companies] appreciate that our Team is not constantly calling on them for food donations."

"We also invite the vendors to bring their own clients and occasionally I send out postcards to the neighbors to come; so we do try to welcome everybody.  Normally, we don't get many of the regular folks to come (other than the curious neighbors wanting to compare to their own home).  But we offer plenty of food to everyone.  We rarely do regular public Open Houses, as we've found that they aren't very effective."

I squirreled this conversation in the back of my head until I came upon an article yesterday from Realtor Magazine entitled, "Feed Them Well and the Associates Will Sell".   The article states, "Rather than provide a dish of candies or a pot of coffee, associates are finding that omelets, salads, and pastry bars, among other treats, are necessary to generate interest. Some realty professionals are going as far as offering homemade cookies in personalized tins to draw crowds, and a menu often is advertised alongside a listing's asking price and other features on materials circulated within real estate circles.

While some real estate pros would rather shell out cash on advertising, others are willing to serve lunch if that is what it takes to sell the home."

Yet again, The Kennedy Team is ahead of the real estate game...in a tasty way!

Janine Gregor
Virtual Assistant to Paulia Kennedy