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Marketing High-End Real Estate
Stephen Press is a principal of Press/Cuozzo Realtors in Hamden, which markets and sells a large number of high-end homes. We asked him about the residential market generally and the challenge of marketing very expensive properties in a generally down economy.
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Business New Haven
6/23/2003
By: BNH
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What is the state of the market for residential real estate?
It's the strongest we've seen it since the high prices of the 1980s. For the last 24 to 36 months we have seen continued appreciation. There has been a shortage of inventory, interest rates are at all-time lows and bidding situations on most houses [attract] multiple offers. This is for all price ranges.
Which communities are seeing the most activity right now?
New Haven is very hot. We have seen people moving back from the shoreline, moving back from Woodbridge into the city. People are moving into Westville, the East Rock area along Whitney [Ave.] and into Hamden's Ridge Road area. Hamden's Millbrook and Spring Glen have benefited from the return to the city. The Wooster Square area is another part of the city that has seen great activity. This is for residential homes whether it be condominiums or single family.
At what price point do 'luxury' homes begin?
In a lot of towns 'luxury' could be considered anything over $500,000, but I think in towns like New Haven, parts of Hamden, North Haven, Woodbridge - the shore especially - it's probably from $750,000 or $1 million on up. There have been a lot of homes sold in the $500,000-to-$1 million range in New Haven or are currently on the market. $500,000 would probably be a good benchmark.
How is the market for these more expensive homes?
What I hear from fellow brokers from Fairfield County and up along the shore is that homes over $1 million have slowed. From our office's standpoint we have really have not seen that; we've been very active. It's been Fairfield County and the shoreline that has [seen] the phenomenal appreciation. The overall economy is not great and I think that the number of New Yorkers that may have been looking on the shore has slowed since probably last November. Also, the spring market on more expensive homes is starting a little bit later. That may be due to the weather.
How do you market a million-dollar home?
When we meet with the homeowner and go over a marketing plan, they all have some preconceived notion that the buyer is going to come from New York City, but most of the luxury home-buyers are from this area, either moving up or moving from town to town. They were local buyers that we attracted through either our direct mail, our database of high net worth or current luxury homeowners and through local advertising.
Where do you concentrate most of your residential market?
The base of our market is Hamden and all the towns contiguous to it. New Haven, North Haven, Wallingford, we represent a number of up-scale homes in Woodbridge and on the shore. Not long ago in Guilford we sold [a house] on the water for $1.5 million.
How are luxury homes marketed differently than non-luxury homes?
When we prepare a brochure it outlines the amenities of the property. We often take aerial photos shot by a professional photographer. It is definitely more intensive - and expensive - than marketing non-luxury homes. Normally you put the listing in the Multiple Listing Service, you run ads in local publications and you wait for either a buyer to call or you co-broke with another agent. With the higher-end home it very often takes longer to sell, but you are dealing in most cases with a more sophisticated buyer and seller. From the buyer's standpoint, when you are buying a house for $1 million or over you are going to more selective, you are going to know what type of high-end finishes there may be, from kitchen counters to lighting. We sold the house in Guilford last week where we know the buyer is probably going to tear off the second floor of the house and rebuild the house. He is buying location across from the water.
How much does waterfront add to the price of the house?
A lot. I can't give you a percentage because it would be based on [what] town. Very often a waterfront buyer doesn't want to be across the street from the water; they want to own true waterfront. Some may have boating in mind and want to know if they can have a dock or build a dock. If you had a house in Guilford that was selling for $500,000 due to the square footage, and another house that had half of the footage but was on the water, it could probably sell for $1.5 million. The house we sold on Vineyard Point was 2,400 square feet, was beautifully finished and was on only 0.2 acres, but it had unbelievable views and it sold for $1.5 million. In most towns you could probably buy an inland estate on three or four acres with a much larger house for $1.5 million.
How many $500,000-and-up homes in the area are going to sell this year?
There have been many more in the last 24 months than there were in the previous ten years. In the past two years in New Haven, 31 homes have sold for over $500,000, and one over $1 million. In Woodbridge, 67 sold for over a $500,000, 11 for $1 million-plus. In North Haven 14 sold for over $500,000 and two for $1 million. In Hamden 26 for over $500,000, three for over $1 million. Orange had 37 for over $500,000 and none over $1 million.
What is your take on these valuations?
I think it's interest rate-driven and that a lot of those $500,000-to-$600,000 homes were $350,000 two years ago. The great appreciation and the demand has driven up prices. We have had [an acceleration] in appreciation since around 1999. Throughout the 1990s we had erosion after the banks failed and we had the real-estate crash in the late '80s/early '90s. All homes that we're selling probably have surpassed their highs of the 1980s. We've seen homes that sold two years ago for $185,000 to $200,000 back on the market today at $300,000 or above. Most condominiums have come back very strong. The ones that did were well located and are a decent quality construction. We know some situations where buildings couldn't be sold because they missed the '80s market, were rented for ten years and now are being sold for prices they were [selling for] in the high of the '80s or higher.
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