When you ask a seasoned real estate professional if selling a “luxury” home is different from selling a non-luxury home, a lot of them will tell you that “luxury” means just another zero (or two) to the price tag. The truth is, the luxury home market is very different from the non-luxury market and the differences extend beyond the price tag.
In Arizona, for example, the market for luxury homes has remained incredibly competitive — in large part due to inventory issues — while the rest of the market has reset from its recent, frenzied seller’s market high.
Luxury, as with many things, is subjective. It can be defined in a variety of ways, particularly when it’s being defined by an average home buyer or someone who isn’t a real estate professional. The reality in real estate is that to be defined as “luxury” the property must meet a certain set of unwritten rules.
What qualifies as luxury real estate
When it comes to real estate, a “luxury” property is generally defined as one that is priced in the top 5% of the local market. In larger metropolitan areas, such as Phoenix, where homes and values differ dramatically from town, to neighborhood, to subdivision, what qualifies as “luxury” may vary from area to area. From a homebuyer perspective, luxury may mean premium amenities, high quality materials, interesting features and desirable locations that are in demand.
Of course, list prices can reflect all or some of those things — including acreage — which means a luxury listing may require repairs or updates to check all the additional boxes home buyers are in search of.
From curb appeal to interior home remodeling and upgrades, there are a number of things a property may require to attract home buyers and increase its value in a highly competitive market.
How to make a luxury home listing stand out
Listings for luxury properties have the ability to stand out in a number of ways. It’s likely everyone has seen homes with unbeatable views, incredible backyard living spaces that include spectacular swimming pools, and unique features that set them apart from other properties.
But, when it comes to the resale value of a luxury home, by far and away, improvements and upgrades made to its kitchen prove to have the highest return on the homeowner’s investment. Updated flooring, from carpet to hardwood to tile, is a close second. Luxury buyers come into the market with a certain expectation for the properties they are considering, and subpar or outdated kitchens or flooring don’t align with those expectations for luxury listings. Homeowners who list their home in a luxury neighborhood with outdated features set themselves up for failure by expecting dated features to fetch the same price as homes that have been remodeled.
The mindset of a luxury buyer does not vary dramatically from that of a buyer down-market: Both will consider purchasing a fixer-upper, a full remodel, or purchasing a home that needs to be built. Generally, luxury buyers are attracted to luxury at the outset, but are not beyond putting their finishing touches on or completely remodeling a home, even when that home has recently been renovated.
Beyond interior upgrades, luxury buyers are moved by outdoor living spaces that allow for serenity and provide thoughtful areas for entertainment. Smart home integration, from security to remote-access control features to entertainment systems, are also attention-getters from luxury buyers — however, nothing has as high of a return as kitchen, flooring and bathroom upgrades.
Interested in listing your luxury property or with learning more about our luxury buyer offerings? Connect with us to begin the luxury real estate experience you deserve.
If you’re considering a home purchase or sale, the team at Halpern Residential is ready to help. We keep an eye on market trends so you don’t have to. Moving or investing in real estate is an exciting time of transition, and we’re ready to help you with it. Contact us today so we can learn more about how we can support your needs.