The increasing number of luxury property foreclosures has triggered new marketing tactics to attract buyers and investors alike to take a look at available inventory. Las Vegas real estate broker Luxury Homes of Las Vegas has struck a deal with JetSuite and flying potential real estate investors for free to take a look at beautiful properties. Not a bad deal for people who will skip the showing and head straight to Bellagio.
But all kidding aside, the rise of foreclosures on high priced real estate is nothing to joke about. The number of foreclosures in February has increased 121% compared to the same month a year ago. Developers of new high end properties are losing their hopes to sell brand new homes as well and it clearly shows that the main driving force behind residential real estate market is modest and affordable homes purchased by buyers who qualified for tax credits.
Due to these changes real estate agent income has been reduced significantly and sellers of luxury properties engage in various marketing schemes to compete; the hunt for prospects has become fierce. The attitude of real estate moguls has changed; there is too much inventory and not enough qualified buyers, and the traditional prospecting and marketing methods do not produce desired results.
For example, in Chicago a beautiful 1.15 million dollar condo in the landmark Palmolive building was initially offered on the market as a short sale but there were no buyers and as a result it is owned by the bank. The reality is that lenders would prefer the short sale to foreclosure because there is much more money in it for them and less legal costs but since in today’s market even short sales do not attract enough buyers the number of foreclosures on luxury properties is steadily rising.
Each geographical area has its own definition of luxury property which is not based on the home’s price. A 1.5 million dollar estate in Kentucky is a high end property where 2 million dollar property in Brentwood, Los Angeles is a comfortable condo with a community pool. That’s why some of the luxury property foreclosure statistics are “out of whack”.
Majority of luxury property owners are mostly business owners and some highly paid professionals. The fact that these types of properties are foreclosing at highest rate is a reflection of a terrible economic environment for small businesses. Of course, one of the contributors to this phenomenon is the fact that many real estate investors in not so distant past have considered pretty much any real estate deal is a safe and reasonable thing to do.
It looks like high end realty is becoming the thing of the past for many realtors and no matter what your broker says as an agent you must diversify to serve new home buyers demographics.