Welcome to Southern Georgian Bay Carriage Trade Properties

The southern Georgian Bay region is renowned for its natural beauty, the Niagara Escarpment, crystal clear blue water, the world’s longest freshwater beach and unparalleled recreational amenities from boating to private ski clubs and world class golf courses. The regions has been recognized as one of Canada’s premier four season recreational playgrounds offering the coveted lifestyle sought by many luxury home buyers seeking the relaxed sophistication reflected in the ultimate recreational property or full time retirement residence.

Real estate Broker Rick Crouch with Royal LePAGE Locations North (Brokerage) represents discriminating buyers and sellers in their quest to buy or sell the area's premium properties in Collingwood, Wasaga Beach, the Blue Mountains, Grey Highlands and Clearview.

Friday, September 27, 2013

What Constitutes Luxury Real Estate?

  In my inaugural posting of this luxury property blog one of the questions I posed was constitutes or designates a luxury property?  For years, the general rule-of-thumb has been anything that is in the top 10% of a given market from a value perspective which in the case of the southern Georgian Bay market would be $750,000 plus.  But is this simple definition enough?  In my opinion the answer is no, and this is shared by some of the top REALTORS® elsewhere that are actively engaged in the luxury property market.  
  Housing data accumulated in a U.S. Census some years back indicated that there were approximately 314,000 owner occupied homes in the U.S. valued at over $1 million.  A secondary study by the U.S. Federal Reserve came up with a higher number which illustrates the difficulty in trying to obtain accurate data in this regard.  Taking into account the conflicting results, it is very safe to say that the $1 million plus housing market is less than 1% of the total number of homes in the U.S.  and there is no reason to think Canada would be much different.
The issue here is the fact that markets differ widely from one are of the country to another.  In some locales such as Toronto or Vancouver for example, $1 million will buy you nothing more than a lot or a home that gets torn down in order for the buyer to build their luxury dream home.  In others, $1 million may allow you to buy the ultimate home on the water or on a large acreage.  
  In 2011, I attended the National Association of REALTORS® conference in the U.S. and met two of the leading luxury property REALTORS® in the U.S. whom I have kept in contact with.  Based on his years of experience listing and selling luxury properties, David Michonski has developed his own definition of what constitutes a “luxury property” which is reflected in the following formula:

Luxury Real Estate = two to three times the average price in a market+ requisite qualities.

  As of the end of August, the current 12-month average price for single family homes sold through the MLS® system of the Georgian Triangle Association of REALTORS® is $332,512.  Using a multiple of 3 times this average price would define luxury homes in our market as having an approximate value of $997,500 or greater which is about as close to $1 million as you can get provided they also have the requisite qualities or features that further contribute to the definition of what constitutes as luxury home.

  In my next posting I will explain the concept of “requisite qualities” as it relates to the value equation when defining luxury real estate.

No comments:

Post a Comment