TRENDS IN LUXURY HOME IMPROVEMENT— PART II

Home improvements are up this year, especially in the luxury home arena.  Last week we talked about the green improvements that are the most popular in high end real estate.

Next on the list of favorite upgrades are kitchens and bathrooms. High end homes are expanding their culinary activities to more than one kitchen. A catering kitchen for dinner parties, a mini kitchen in the master suite for midnight snacks, and an outdoor kitchen for get-togethers by the pool are the latest additions to the traditional central family kitchen. 

Luxury bathrooms are becoming full fledged spas with an emphasis on the shower.  Multiple head rain and steam showers include aromatherapy, and chromotherapy (colored light therapy) features to wash away stress.  Outside the shower, the sky’s the limit. Luxury bathrooms are sumptuously fitted with everything from fireplaces, air-jet tubs, multimedia entertainment centers, wireless internet, wine coolers, smart toilets, electronic massage tables, dry saunas, tanning booths, espresso stations, and towel warming drawers.

Some of these improvements may seem extravagant, but most luxury homeowners have very active lives, and it is important to have a stress-relieving refuge that can comfortably support a healthy, busy schedule.

TRENDS IN LUXURY HOME IMPROVEMENT— PART I

Even though the current housing market in general is experiencing a readjustment, the luxury home market is still going strong. Many owners of high end properties see their homes as long term investments as well as a great place to live, and they are putting their money into improvements.  Harvard University’s Housing Studies Center estimated that $160 billion was spent on home improvements last year, and much of that went for the latest in luxury upgrades.

With environmental issues so much in the forefront these days, green is at the top of the home improvement list.  Energy efficient features- extra insulation, double paned windows, Energy Star appliances, and lighting using compact fluorescent bulbs and LEDs, are the most popular upgrades.

But America’s top homes are also being retrofitted to tap into alternative energy sources like solar, wind and geothermal. Environmentally conscious flooring such as bamboo or cork, and chemical free paint and building materials, will help support good indoor air quality. All these improvements will save the homeowner utility costs in the long run and dramatically improve the homes energy footprint on the planet.

WHAT DO LUXURY HOME BUYERS WANT?

An increasing number of prospective homebuyers are seeking a luxury home – specifically, a multimillion dollar residence located in a beautiful location and loaded with amenities. 

This was revealed in a recent survey conducted by the research firm ICR, which showed that high-end homeowners are particularly optimistic about home values.      

Key findings in the survey of the luxury market demonstrates that the typical million-dollar homeowner is invested not only in the value of their home as a current part of their portfolio, but also see long-term gains coming from this investment.   The survey polled homeowners whose current primary residence is valued at over $1 million.  Their average household annual income was $754,000.

“Must have” luxury amenities cited by respondents include designer kitchens, formal landscaping, water views, customized home entertainment centers, swimming pools, indoor gyms and wine cellars.  In the area surrounding their property, respondents cited a variety of desired amenities including a boat dock, putting green, and tennis or basketball courts.

MAKING AN OFFER ON A UNIQUE HOME

Negotiating the purchase of a very special luxury home is a fine art.   Only a qualified real estate agent with a reputation for closing high-end transactions can negotiate the best deal with the necessary expertise, sensitivity and discretion.  Well-informed buyers can also facilitate the process.

Before you make an offer on a home you wish to buy, schedule professional inspections of the house, fire, security and septic systems, so you have an objective evaluation of the condition of the home and grounds.  Have an attorney review the title search and clarify any outstanding issues relative to easements, boundaries, water and mineral rights or liens against the title.  When you draft your offer, try to avoid contingencies that may complicate or delay the sale.  Read the seller’s disclosure statement carefully, and ask your agent to explain any items you don’t understand.  Set a limit on the maximum dollar amount you are willing to pay for the property, so your realtor is operating within pre-established guidelines when negotiating price on your behalf. 

Stay in close communication with your agent while the terms of the offer are being resolved.

WHY GET PRE-APPROVED TO BUY A LUXURY HOME?

Realtors are often reluctant to ask high-end homebuyers if they have been pre-qualified by a lender.  They know that, for many buyers, the availability of cash will not be a problem.  If the agent does not pose the question, he or she is violating fair housing laws.

Many luxury homebuyers want to present a letter from their accountant confirming their solvency.  However, this can alert the seller to the fact that you are well able to pay their asking price—and more, which leaves less room for negotiating the price and terms.

A better strategy is to become pre-approved by a lender who will simply tell the listing agent that your credit scores are acceptable and your cash reserves are adequate, without disclosing the details.   By getting pre-approved you are guaranteed that the lender will provide you with the loan and protect your privacy.  The seller and the listing agent do not need to know your true buying power.

THE LATEST TRENDS IN LUXURY HOME DESIGN

What features are fashionable homeowners choosing to include in their newly built upscale homes?  Let’s take a look at what custom home clients consider the latest necessities of life.

Topping the list are the best home security systems, complete with camera surveillance viewable on all of the television sets in the home and walk-in safes.  This feature reflects the widespread concern for personal and family safety among high-end homeowners. Custom-designed entertainment areas with multiple kitchens, indoor and outdoor living rooms and playrooms for children are popular.  Homes with multiple levels may include a roomy garage that accommodates guest parking, indoor basketball or tennis sport courts and elevators that serve all levels of the residence. 

Areas that allow homeowners to pursue their favorite leisure activities are being requested more frequently in new custom homes.  Buyers want fitness workout rooms, home gyms, indoor and outdoor lap pools, spas and sports bars with plasma TVs where the latest sporting events can be viewed in style.  Massage rooms, steam rooms, yoga and meditation spaces are other amenities that are in high demand.

Building or buying a home with these features can improve the resale value of your property.

INSURANCE CONSIDERATIONS FOR LUXURY HOMES

When you own a property that is valued in the millions, insurance risk management reaches a whole new level.  The typical policy coverage is not sufficient to guarantee peace of mind for those with larger estates, multiple properties, yachts, classic automobiles and valuable collections of jewelry, art and antiques.

High-end homeowners want extended property and liability options that are not provided with most “brand name” insurance policies.  Many owners of trophy homes need individually tailored plans that will cover expenses associated with identity theft, background screening of household employees and security system planning and updates.  Expensive home furnishings, jewelry and art collections must be meticulously accounted for in the detailed documentation of the contents of each home.  Affluent homeowners may want to select from a broad schedule of deductibles based on the calculated risk for each property.  Above all, the range of client services offered by the insurance company should ensure that each homeowner feels utterly confident in both the level of insurance protection and the management of the policy.

Ask your real estate agent about insurance carriers that specialize in the luxury marketplace.