Is a $400,000 house a luxury home? Is $1,000,000 the starting point? Is there a higher category of homes? Super or Uber Luxury?
As a real estate broker in the Dallas, TX market who works in the "luxury real estate" market frequently, I get this question a lot. My initial response internally is typically, "who cares?" The label is almost entirely void of value.
Research proves that very few home buyers get online and type "luxury real estate" or "luxury homes" into google. Even fewer search by terms like chateau, estate or mansion. People who purcase homes beyond the common price range for any area are still searching for and buying a home that seems appropriate for them in most cases.
When your income or assets allow for the purchase of a $3,000,000 home, you simply think of it as a house or a home. Maybe you specifically want a property with some additional land, water, views or amenities, but you aren't as attached to a label as the traditional market might believe.
After accepting an invitation to a gathering of the nation's top "luxury home marketers" last year in Charleston, SC, I committed to better define this target market for my team of world class agents and expert support staff. I explained to them that each of my certification courses and additional training seminar providers define the high end market differently.
Some say that a "luxury home" is any home that is valued at more than two times the average sales price for an area. While this sounds acceptable, this doesn't fit in an area where the average price is $92,000.
Others say that a "luxury home" is any property worth over $1,000,000. This makes no sense if that property is 500 acres as that would make it very affordable land.
I reminded my team that the world of residential home sales is hyper local and ought only pay attention to a very small geographical area when determining a properties value and the best approachto marketing the home. We start with market average pricing for the market in question. If we are evaluating a home to consider marketing it for a seller, we first determine what is an average sales price for homes in the immediate area. If we are discussing West Plano, Tx for instance, I might search the entire area and determine that $118 per square foot is typical. I might be better served to chose the few blocks just around my prosective client's home to find out that the average in this hyper local area is above $151 per square foot plus adjustments for age, lot size, amenities etc.
If my property is more than double the average price for the general area, I'll be glad to call it a "luxury home." More importantly, I'll have a better idea of who my likely buyer is, where to market images, persuasive written copywriting, video and custom pieces to locate, incentivize and emotianally motivate a buyer or multiple buyers.
The moral of the story is to worry less about the label a property has and to focus on how to market the home to achieve a desired result. Labels can help, but they are as valuable as they way they are used.
For more information about high end houses in the Dallas, TX area, check out the area and community pages HERE!
By: Todd Tramonte
