What’s in a name? Keywords in luxury home listings changed in 2013 compared to 2012, according to a report by Trulia, an online company which specializes in marketing real estate. Does it mean sellers are more willing to flaunt opulence than they have been in previous years during the recession? Are homes with high-end, custom amenities hitting the market in higher numbers, or is something else at play?Flickr|http://www.flickr.com/photos/tomtomsuites/4124127275/sizes/o/in/photostream/
The report compared keyword data for real estate listings priced at least four times the median home price in a given metropolitan area. This strategy allowed for more equal comparisons between markets with very different median values. As Jed Kolko, chief economist at Trulia, noted, “A million-dollar home in Rochester, NY is a luxury listing, while a million-dollar home in San Francisco is not.”
The study found some very notable and seemingly odd changes in the way listings were worded when the two years were compared. The use of the term “marble bath” increased in 2013 by 78 percent between the two years, and marble floors were noted 30 percent more often. The phrase “roof deck” jumped by 63 percent, and terraces were mentioned 42 percent more often.
High-end amenities got a lot more attention in luxury home listings too. Wine rooms, home gyms, tennis courts, private elevators and ponds were all mentioned with far more frequency in 2013 listings. Panoramic and ocean views were each mentioned 18 percent more often.
Kolko said luxury home listings were also more likely to reference windows in the property descriptions in 2013, and the numbers dominate the list of trending topics. Oversized windows were noted 56 percent more times, floor-to-ceiling windows 39 percent and ceiling windows 37 more. Additionally, the mention of “large windows” rose by 20 percent, but what does it all mean?
What was out in 2013
While the use of phrases about outdoor kitchens and summer kitchens trended upward by 22 and 20 percent respectively, other kitchen-related terms dropped overall. Islands, custom cabinets, countertop materials and other features faded from the spotlight in luxury home listings along with the term “gourmet kitchen.” The use of descriptors related to appliances also dropped off. Words associated with items like stainless steel refrigerators and double sinks. Other cooking-related items were left out of listings; barbecue grills were 16 percent less likely to be included in the property description in 2013 for example. On top of that, references to both formal dining and formal living rooms each dropped by 4 percent, according to the report.
Are there simply better lighting features and fewer custom cabinets in a huge percent of the homes listed in 2013 over 2012, or is something else going on?
Kolko said the changing trend in the way listings are written has to do with the shift in markets where homes are being listed. Listings for luxury homes have increased in urban areas, hence the rise in roof decks over barbecue grills. However, he noted tennis courts and outdoor kitchens aren’t going to be found in urban settings, so what is driving the changes must be more complex.
Matt Wallaert, a behavioral psychiatrist at Microsoft, told Marketwatch it’s a sign that wealthy homeowners may be tired of the ongoing, hefty bills associated with owning a high-value property with big amenities. “We don’t often think about access to light as a luxury, but that’s what it is. Large windows equal large heating bills,” Wallaert said.
To Wallaert, these sellers aren’t flaunting their wealth but trying to unload the associated burdens. “It’s a good lesson that building that wine room isn’t something you really need—and it might come back to bite you, forcing a home sale later on.” So while home sales are rebounding, including sales of luxury homes, the motivating factors might not all be related to an improving economy.
That said, the Federal Reserve Bank is expected to raise mortgage interest rates in the coming months because of positive data on unemployment, an uptick in economic growth and strengthening housing markets.