In a recent years, the real estate market has indisputably belonged to the buyers, so why are they so intent on taking less than the “best” that they can get? According to a recent survey, buyers of vacation homes, at least, are buying smaller not just because it’s smarter or because they do not have the budget to “go big,” but because the perceived bargain on the home is as much of a draw as the property itself. In short, although banks are desperate to lend to the dwindling pool of qualified borrowers out there – and in many cases, lend big – the borrowers themselves are redefining the way that they look at real estate and downsizing their dreams in the process. Furthermore, according to a recent survey conducted by Denver’s Kelsey/Norden Real Estate, “Green building is no longer a rare quality….It’s become the standard”.
The survey focused mainly on buyers interested in purchasing second homes, since the area in which the survey was conducted has a large “vacation home” population thanks to skiers and people wishing to enjoy the fresh mountain air. According to the results, today’s buyers have accepted the “new reality” that allows them to expect discounted values of “20 to 40 percent” for at least the next two to three years, but that instead of causing the buyers to buy big and grand, instead “value is king.” Buyers have been compromising (down) on unit size, services and degree of exclusivity, with high carrying costs being generally unacceptable. This may be due, in part, to the fact that a lot of qualified buyers are baby boomers who are starting to think about retirement, but it also because there is a new “affluent group of Gen-X’ers in their late 30s” who are focused on wellness, community living and sustainability when they evaluate a potential second home. Ulrich Salzgeber, an agent with Buyer’s Resource Real Estate, believes that in the future “a healthy lifestyle and consciousness about the environment [will be] more appealing than the glitz and the glitter.” If he’s right, then the best thing to do with your foreclosed mountain mansion could be to split it up in to condos and sell it five times.
Do you agree that in the future, smaller will be considered better even in the luxury market?
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