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Luxury buyers are ‘willing to spend a whole lot more than ever before’

10/04/2019

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How do you thrive in today’s luxury market? Don’t miss Inman’s Luxury Connect, October 15-17, 2019, in Beverly Hills, California. Walk away with the marketing, technology and luxury intelligence to grow your business while expanding your referral network with built-in networking sessions. Join 600 of the most notable names in luxury real estate. Reserve your spot here.

The luxury real estate market may have had a slow year but that doesn’t mean that agents should sit back and wait for more high-end clients to come to them with time. Craig Hogan, the vice president of luxury at Coldwell Banker, says that affluent clients are clamoring for high-end homes like never before — but, given market fluctuations, agents specializing in luxury had better be constantly “in the know” and prepared to answer rising questions about what makes a good investment.

Craig Hogan

Hogan will be sharing his high-end real estate market wisdom at Luxury Connect, Oct. 15-17, at the Beverly Wilshire Hotel, but in advance of the conference, we spoke with him about how agents can dominate the high-end real estate space in any conditions.

What is happening in the world of luxury real estate in 2019?

I don’t want to sound negative, so I’m not going to remind you that the market slowed. It’s a different time. But especially in luxury, we’re seeing some of the biggest listings we’ve ever had. That is a really good sign. The market’s a little cooler, but we’re a big brand, and we weather all conditions.

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What are some challenges you’ve seen in this sphere lately?

It’s a changing industry, and pricing is probably never more important than right now. Consumers are very savvy, especially in the upper tier. They know what they’re looking for, they know what they want to pay. It’s just a different climate. The consumer is willing to spend a whole lot more than ever before. That’s a good sign.

We have some listings that are just absolutely phenomenal that are coming on the market. We’ve had some great successes this year; we’ve had a really, really good year in the $20 million-plus range. But it’s a changing time and the consumer’s very savvy. They’ve got a lot of support, they’ve got a lot of information and they know how to read the market. Thank God they still need us.

Affordable homes tend to get snapped up at breakneck rates while luxury homes tend to sit on the market longer. Is that in line with your own observations?

I think that’s very true. The high-end price point does sit on the market a little longer, but not always. We also sell some of the very high-end homes off the market with one single buyer and one offer and we’re done. So that’s the other end of that spectrum, that happens as well.

That’s part of the value of having a really sharp agent who knows how to put deals together. There’s never been a better time for agents to know the skillset of bringing a buyer who doesn’t want to move and a seller who doesn’t want to be realistic and putting that together. That’s the skill, and that’s the win.

So what skills do you need to be a luxury agent?

We’re really big on skillset. In the top 1 to 5 percent, you really need to what you’re doing. The days of being a real estate agent part-time because you didn’t have anything to do — that is long gone in our history. Today the top agents are real pros. They know what they’re doing, they practice their craft, their skillset is very high and they are professionals at a level that I didn’t see when I started selling 25 years ago. I see it today.

You have to practice your craft, you have to keep learning, you have to always be on and know every aspect of the market. It’s very important. People expect it today. They expect us to be better than we were 20 years ago.

How do you start out in this branch of the industry? What’s the trick for finding star clients and securing luxury home listings?

It’s tough. I don’t know if this will ring true for everybody, but my advice would be to always be learning and partner up with people who are at the top of their game. At some point, you will need help in this part of the market. At some point, you’ll need guidance, mentorship and leadership.

Partner with people who are at the top of their game, and let them carry you along until you’re able to do it on your own. Trying to be a top luxury agent right out of the gate is not impossible, but it’s not the way it works. You really have to do this for a while — watch others, learn from others and let them lift you up.

How important is a strong social media presence for a luxury agent?

Very, very important. Not only is it important, but it’s important to do it the right way. It’s important to pay attention to Facebook, Twitter and Instagram. Instagram is super hot. Quick video, less than forty seconds, is super hot. It’s the way that we communicate in real estate today.

Instagram has just changed the way we look at the world. The quick photos that we see make us want to go eat, make us want to go buy something, make us watch something. Real estate agents doing it right are really nailing it in this space.

What else do agents need to be doing online?

Video, video, video. Can’t stress that enough. It is just the way we communicate today. We’ve actually had international buyers purchase property from a video. It’s something that we absolutely know — we’ve seen it, we’ve tracked it. It’s real and anyone who thinks that it’s not important is missing the boat on that.

If I’m in another country, and I can see a 30-second video that makes me go to that property website and look at a full video and read about it, then that’s a win. And that’s what happens.

What’s the question you hear most from luxury clients?

Should I buy it? Is it too much? Is it going to go up or down in value after I buy it? How much renovation will it take? I think buyers today want to know, more than anything, if they’re making the right move. They’ll buy it, and they’ll pay for it, but they all wonder if it’s the right time to buy. And I would tell you right now that it is the right time to buy.

Email Veronika Bondarenko

Reserve your spot at Luxury Connect here. Thinking of bringing your team? There are special onsite perks and discounts for team who register together. Just contact us to find out more.

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