The Rich Are Different

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The Changing Luxury Market

I am a specialist in luxury homes and marketing luxury goods to clients throughout the world. This current economic climate though has changed my opinion of the definition of luxury. Times change, people change and luxury has changed.

Luxury clients were once an elite group of individuals who were fairly obvious to even the most amateur of sales executives. But luxury elite status has dimmed somewhat as firstly, many people are now able to afford luxury goods and secondly, many luxury clients remain cautious after the real estate and financial meltdown.

Today’s luxury homeowner may look wealthy (expensive diamonds, cars, art) but underneath their demeanor is a homeowner who is living month to month and wondering how to maintain appearances. It’s a fragile world and frankly, they are ill prepared.

Today’s TRUE luxury client often looks different and buys based on knowledge and experience. The smart ones are people who have not fallen prey to every excess on the market, purchased a bucket load of baubles and continue to drive the latest most expensive cars. I am finding many luxury clients asking me to assist them as they work through a financial downturn they never anticipated or saved for.

It’s a scary world. Our next election means a great deal for our economy. As I have said in the past, home sales equal a strong economy.

Today’s luxury client could mean dreadlocks and diamonds. In other words – today’s luxury is not the obvious…in fact, it’s the reverse.

Today’s luxury buyer has invested well and with discretion. They may may drive a Ford and not have a multi-million dollar medieval castle. They wear jeans and Nikes. The high-end buyer is unique and totally in tune with the market.

80% of today’s luxury buyers are tech savvy and researches every purchase. And most importantly, today’s luxury customer rarely buys on impulse. Long term investments are the rule with multiple properties instead of one show home. It’s actually an interesting turn of events.

I am reminded of my grandmother who came from great wealth but lived her later years in a charming bungalow of about 970 square feet. She mowed her own yard in knee highs and pearls. She drank her tea on fine china in a tiny kitchen. That’s somewhat representative of today’s luxury.

They luxury buyers are different, they act different and they have a certain rule for living that is going to redefine the future. They may not have a million dollar home but their home will be chic and charming. Gaudy is out and tasteful and charming is in. Small is the new big. This is going to be amazing to watch the old world appeal of outlandish display transformed by a new era of discrete buyers.

To quote F. Scott Fitzgerald, “The rich are different…”

Obstacles to Homeownership: Perceived or Real?


Americans believe in homeownership and their desire to partake in this piece of the American Dream. Unfortunately, some of the buyers believe there are obstacles preventing them from attaining that goal. However, studies have shown that many of the obstacles are perceived, not real.

A recent study by Fannie MaeWhat Do Consumers Know About The Mortgage Qualification Criteria?, revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. Let’s break down three such challenges.

Down Payment


Many renters have mentioned that the lack of an adequate down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Maereport:

  • 40% of all renters don’t know what down payment is required
  • 15% think you need at least 20% down
  • An additional 4% think you need at least 10% down

The Reality

There are programs offered by Fannie Mae, Freddie Mac and FHA that require as little as 3-3.5% down. VA and USDA loans offer 0% down programs. According to the National Association of Realtors, the typical down payment for a first time buyer is 6%.

Credit Score


Many renters have mentioned that the lack of an adequate credit score is preventing them from moving forward with the purchase of a home. According to the Fannie Maereport:

  • 54% of all renters don’t know what credit score is required
  • 5% think you need at least a 740 credit score

The Reality

Many mortgages are granted to purchasers with a credit score of less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average credit score on all loans is 722.

Back End Debt-to-Income Ratio (DTI)


Many renters have mentioned that they carry too much debt which is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

  • 59% of all renters don’t know what DTI is acceptable
  • 25% think you need at under 25%
  • 7% think you need under 39%

The Reality

Lenders like to see a back-end ratio that does not exceed 36%. Fannie Mae’s maximum total DTI ratio is 36% of the borrower’s stable monthly income. The maximum can be exceeded up to 45% based on credit score and other requirements.

Bottom Line

Don’t let a lack of knowledge or misinformation keep your family from buying a home this year. Call me and we will get a loan officer to evaluate your ability to buy now! No obligation, of course.

Homeownership Still Part of the American Dream


he National Association of Realtors (NAR) just released the first edition of their Housing Opportunities and Market Experience Survey (H.O.M.E.). NAR explained that the report covers:

“…core topics that will be tracked on a monthly basis such as views on housing as a good financial investment, whether homeownership is part of the American Dream…”

The current survey confirmed two long standing beliefs regarding homeownership:

1. Americans at every income level believe homeownership is part of the American Dream


2.)  Americans at every age believe that homeownership is a good financial decision


Bottom Line

Americans in all age groups and income levels believe in homeownership as a piece of their American Dream. If you are ready and willing to buy your dream home, CALL ME so I can help you determine if you are able to.

Top Reason to List Your House For Sale Now!


If you are debating listing your house for sale this year, here is the #1 reason not to wait!

Buyer Demand Continues to Outpace the Supply of Homes For Sale

The National Association of REALTORS’ (NAR) Chief Economist, Lawrence Yun recently commented on the inventory shortage: “While feedback from REALTORS® continues to suggest healthy levels of buyer interest, available listings that are move-in ready and in affordable price ranges remain hard to come by for many would-be buyers.” The latest Existing Home Sales Report shows that there is currently a 5.1-month supply of homes for sale. This remains lower than the 6-month supply necessary for a normal market and well below November 2014 numbers. The chart below details the year-over-year inventory shortages experienced in 2015.


Bottom Line

CALL me so that I can show you the supply conditions in Central Florida and assist you in gaining access to the buyers who are ready, willing and able to buy now!

Small Spaces


I love projecting future trends. This one isn’t too difficult to predict. People are going smaller. The Millennial generation is not enamored with great, big houses and desire a lifestyle that won’t leave them bankrupt.

I have downsized from a very large home to two smaller home, one as my permanent residence and one for vacation. If you put my two homes together you would have one big house. I love them both.

I find smaller homes are easier to tend and maintain. I also like the fact that you have to think of a purpose for every item of furniture, clothing and mementos. A place for everything and everything in its place.

Designer Gary McBournie says: “I prefer living in a small house. It just puts its arms around you and makes you feel at home.”

Go small and go home…





Home Prices: Past, Present & Future


CoreLogic released their most current Home Price Index last week. In the report, they revealed home appreciation in three categories: percentage appreciation over the last year, over the last month and projected over the next twelve months.

Here are state maps for each category:

The Past – home appreciation over the last 12 months


The Present – home appreciation over the last month


The Future – home appreciation projected over the next 12 months


Bottom Line:

Homes across the country are appreciating at different rates. If you plan on relocating to another state and are waiting for your home to appreciate more, you need to know that the home you will buy in another state may be appreciating even faster.

Call ME to help you determine your next steps. I look forward to it.