Where have all the Texans gone?
Roger Hukle says that today’s luxury buyers are looking for more than just a house, and many are only interested in something new.
Sales of high-end second homes not expected to rebound quickly
Seasonal buyers looking for a second home will account for only 15 percent to 20 percent of the total luxury home market during 2009.
That’s a stark contrast to four years ago, when The Broadmoor sold two-thirds of its $1 million to $2.5 million Brownstones to investors, rather than to local buyers, said Roger Hukle, a former broker with Broadmoor Properties who today heads Flying Horse Realty, where the same trend was initially true.
Since sales began at Flying Horse’s upscale Toscano three years ago, developer Classic Cos. has sold 11 lots priced from $500,000 to $1.5 million.
Hukle said he has met with dozens of million-dollar-plus buyers from Denver, Texas, Chandler, Ariz., and Palm Springs who find the on-site K-12 campus, golf course and clubhouse compelling.
“The same is true of The Broadmoor’s West condominiums or Kissing Camels,” he said. “In today’s economy, buyers who can afford million-dollar homes are usually looking for more than just a house. And many of them want new.”
Hukle said that while sales have slowed, million-dollar home customers are still surprisingly common.
“You may see only three closings of homes priced at $1 million and up, but that doesn’t give the whole picture,” he said. “Up here in Toscano, Cathedral Pines or High Forest Ranch, a lot of people are working directly with custom builders — and those homes never hit the MLS.”
Like his counterparts, Hukle has experienced challenges during a tight lending environment.
“In one recent resale, the bank ordered an appraisal that came in at $1.2 million,” he said. “They requested a second appraisal, and that came in at $850,000 two days later. That adds even more challenge to an already tough home sale market.”
Overall, however, Hukle expects wealthy buyers who have been sitting on the sidelines to re-emerge during the next two to three years.
His view is shared by national real estate analysts at DataQuick and J.P. Morgan/Chase, who say that well-heeled luxury home buyers are being prudent and conservative, waiting for prices to decline more before making their move.
National Association of Realtors Chief Economist Lawrence Yun offered hope to NAR luxury brokers this March when he said that long-term demand looks quite favorable.
Yun’s research showed that a large number of people are entering their prime years for buying a second home, and despite the current economic factors, “the fundamental demand from these large population groups will remain.”
But other analysts see a long-term rather than an immediate high-end recovery.
J.P. Morgan/Chase mortgage bond analysts, according to CNNMoney.com, are predicting that upscale home prices “may not bottom out until 2012, when prices will be down 60 percent from their peak.”