As 2013 comes to a close, The Financial Times reflects on five reasons the luxury real estate market has seen a promising upswing over the last 12 months. Compared to the U.S. as a whole, the luxury market has experienced a superior recovery from the housing market bust with home prices in the top 5% increasing by as much as 10% since September of 2012 while the other 95% increased 6% over the same time frame. Read on to find out what has fueled this healthy boost in the luxury market.
- The increase in wealth. While everyone the world over is rejoicing in the recovering U.S. economic conditions, high-net-worth individuals are doing a decidedly more vigorous celebration dance. Recent data has revealed that the top 1% of households by income has captured 95% of the income gains between 2009-2012. Larger stock portfolios held by these high income individuals have benefitted from a booming stock market. The wealthy are searching for homes to fit their lavish lifestyle and are less likely to let interest rate increases dissuade their buying choices. In addition to these staggering numbers, the remaining 90% of the country has experienced fallen incomes by 16%.
- Affordable (Oversized) mortgages. It’s no secret that cash is king in the luxury real estate market, but when a mortgage is needed, they are accessible at historically low rates. Larger loans (usually $625,000 in high-cost areas) were generally more expensive and had stricter requirements than conforming loans, but recently have become more in line with conforming loans in terms of affordability and screening requirements. Another factor is the tax break, interest on loans can be written off up to $1M.
- Foreign buyers. The media has been reporting a sharp increase in purchases by foreign buyers. From Europeans to Asians, buyers are coming in from outside the U.S. with a sense of urgency to buy. Metropolitan cities like Miami, L.A. and Honolulu have seen the largest upswing in purchases by foreign buyers.
- New construction is back. For several years after the market downturn, new construction of luxury properties was virtually nonexistent. But contractors are getting back in the game as inventory continues to stay low despite an ever increasing demand. The country’s largest builder of luxury homes, Toll Brothers, have increased signed contracts by 23% in dollars and 6% in units in the fiscal fourth quarter. Co-founder of Toll Brothers Robert I. Tolls discusses the current state of the luxury home building market and it’s relationship to the overall luxury real estate market, “The supply of luxury homes is still not meeting current demand, let alone the pent-up demand of the last seven years. This supply constraint could lead to a further escalation in luxury home prices above and beyond normal trends until industry production returns to historic equilibrium.”
- Existing homeowners are trading up. First-time homebuyers are not the sector fueling the increase in luxury home market increase – existing homeowners are coming up from beneath the water, now having the ability to sell their homes and move to larger, more expensive residences. According to The Financial Times article, more than 85% of homeowners with a mortgage in the second quarter have some equity in their homes, this number up from 75% in 2011. Low inventory is allowing trade-up buyers an easier time selling their current home.
Forget the sugarplums, visions of jewels and dresses are dancing in her head this holiday! The glittering season calls for sparkling attire and a fresh, rejuvenated spirit. But fret not, we have scoured Montecito compiling a list of the most luxurious and stylish gifts certain to enchant the women in your life. Read on to take the guesswork out of shopping for your ladylove’s holiday gift.
1. Parker EXCLUSIVE. Let her shine at every holiday soiree in this glittering Parker EXCLUSIVE Racerback Sequin Dress ($398). Montecito’s newest boutique INTERMIX in the Country Mart carries the dazzling cocktail dress and a plethora of designer apparel and accessories.
2. Echoz Crystals. The earth’s healing energy and chic style combine in these designs by Echoz Crystals. Echoz Crystals necklaces are designed with simplicity and elegance, each necklace is uniquely and carefully handcrafted. The crystal pendants create a bold statement, trumping the need for other pieces of jewelry. With a fantastic price point (necklaces start at just $30) you can gift your girl a collection of these beautiful, metaphysical pieces.
3. Antik Batik. An unique piece inspired by the designer’s global travels, this Mirrored Ale Wallet by Antik Batik ($325) is sure to be appreciated by your lady all year round. Intricate embroidery and beadwork applied to exquisite leather create a piece both refined and relaxed. Visit Calypso St. Barth in the Montecito Country Mart to admire this remarkable clutch.
4. EVE LOM. Give the gift of beauty this year with EVE LOM’s Ultimate Collection ($275). Montecito Country Mart’s SPACE.NK.apothecary carries this luxurious set which includes an array of products designed to enhance her natural beauty.
5. Montecito Yoga. Inner peace is a priceless present, but you can help her find it with a year of unlimited yoga sessions at Montecito Yoga ($1700). Class schedules are flexible, accommodating those who enjoy morning and evening sessions.
This wraps up our holiday gift guides for 2013! It has been yet another year of working with fantastic clients and lovely agents. Riskin Associates wishes all a joyous holiday and a wonderful new year!
Looking to impress the man in your life with the IT gift of the year? Fear not as 2013 did not disappoint, with a list of exclusive gifts and gadgets from luxury electronics to designer accessories certain to delight the most distinguished gentleman! Read on to find the area’s most lusted-after wishlist.
1. Sonos Wireless Music System. Santa Barbara electronics company Sonos has quickly become a household name with its line-up of high-tech sound systems. Hifi speakers and audio components distribute your music collection throughout the home, allowing you to create a unique atmosphere for each room by customizing the soundtrack – controlling the entire system from your preferred device. Find it at Santa Barbara’s Home Integrated Technology. (Play:5+Bridge Gift Pack, $399).
2. Louis Vuitton Steeve Men’s Bag. Louis Vuitton’s coveted trademark checkerboard design adorns this stylish and functional men’s bag. For business or pleasure, the versatile bag holds all the important possessions to take your man from the boardroom to the gym and from the gym to dinner without a stop in between. Find this fashionable gift at La Cumbre Plaza’s Louis Vuitton boutique. (Steeve Men’s Bag, $2,600)
3. Taka Puna Bespoke Suits. Luxury menswear designer Tom Ford made 2013 the official year of men’s made to measure suits. Custom made suits in crafted in the finest textiles is the ultimate in luxury gift giving. Make your man the eye candy of every holiday soiree by outfitting him in a tailor made suit by Santa Barbara’s premier bespoke tailor, Taka Puna. (Starting at $1,950).
4. Breaking Bad – Complete Series. Breaking Bad, the men’s entertainment obsession of the year. Did your man miss out on the action? Is your TiVo backlogged with saved episodes he watches over and over? Remedy these tragedies with one easy gift – the complete series DVD gift set. Find it on Amazon.com. (New from $470)
5. Burberry The Britain. Owning a fine timepiece is a symbol of accomplishment and status. Shower the gentleman in your life with praise and show your appreciation for the hard work he puts in all year. The Burberry Automatic Alligator Strap watch is a modern take on the classic Burberry design. Find it at Nordstrom in Santa Barbara’s Paseo Nuevo. ($1,995)
Hostess Gifts that Won’t Disappoint!
Looking for that perfect host gift? We’ve got you covered. Santa Barbara and Montecito are riddled with shops bearing luxurious, one-of-a-kind trinkets sure to dazzle your next host or hostess and we’ve compiled of list of unique treasures ideal for gift giving!!
1. Brunello Cucinelli Cashmere Blanket. Saks Fifth Avenue brings you this cozy, italian made throw which just so happens to come in a gift-wrap friendly box. ($1,235)
2. Tiffany Holiday Teapot. Known only for classic and sophisticated designs, Tiffany & Co.’s Victorian inspired porcelain pot is just the centerpiece to a lovely tea set. ($255)
3. Rusack Winery. While anyone can grab a bottle of two-buck chuck from their local grocer, a sophisticated host will take notice when you present them with a high-quality wine. Order a case of a fine Rusack vintage and bring a bottle to every soiree to attend. They’ll be sure to send out your invitation next year. (Various selections.)
4. Baies Figuier Roses Candle Collection. One might consider the newest addition to the Montecito Country Mart, SPACE.NK.apothecary, a one-stop-shop when it comes to host gifts. Filled to the brim with luxurious bath and body items for the ladies and the gents, the space (natch) is also our go-to for it’s most delightful scented candles. When it comes to an impressive yet inexpensive host gift, this rose trio from Baies Figuier is a no-brainer. ($84)
5. Golondrina Candelabra by Jan Barboglio. Unique in both style and quality, this five-tier candelabra it set upon an aged stone base. We dare you to find another quite like it. ($650)
Yes, we give you permission to fall so deeply in love with these items, you can do nothing but deck the halls of your own home with them! Happy Holidays!
Montecito and Santa Barbara are renowned for year-round sunshine and temperate temperatures. The enviable climate allows for surfing, golf rounds, hikes, wine tasting and just about any other outdoor activity you enjoy, 12 months a year. Even the “cold front” which has moved into our lovely coastal town, bringing daytime highs down to the 50’s and evenings to almost freezing temperatures, hasn’t kept residents and visitors indoors, with many continuing with morning beach walks and strolls along Coast Village Road. Embracing our abnormally cool weather, Riskin Associates invites you to enjoy three cozy spaces where fireplaces are warm and inviting centerpieces. To enjoy more of these distinctive estates, click the links below.
From the top: Shadows of Provence, Stunning Ocean View Estate, Rustic Beauty
Turbulence in mortgage-lending activity is having a number of interesting effects on the real estate market. MSN.com reports that currently, refinancing is the dominant activity but as interest rates continue to rise the numbers seem to be dwindling at a steady pace. The increase in rates is discouraging homeowners from refinancing, slowing down business for lenders, effectively forcing many out of the business. How will this effect prospective buyers and homes sales in 2014? It means there will be fewer lenders to choose from when the time comes to apply for a loan on your new property. Implicating the law of supply and demand here, fewer lenders could mean a rise in the cost of refinancing and purchasing.
Another game changer coming into practice at the start of the new year is the new qualified-mortgage rule which will require lenders to take a closer look at applicants’ financial information to determine their ability to pay off their loan. Despite this tightening of financial investigations, home loans are predicted to lead the activity in 2014, which is of course good news for the real estate market as increased home loans means increased sales!