PROFILE OF LUXURY CLIENTS

Survey Methodology 730 online surveys were received in November Respondents are Luxury clients who purchase/sell a home for over one million dollars. Maximum sampling error: ±3.5 percent at two standard deviations (a 95% confidence level).

Type of Client Represented Q: Who did you represent in your last transaction?

The Typical Luxury Client 74% College Educated 48% Single 92% permanently reside in the United States 71% Caucasian 53 Years Old $350K Median Income

Singles made up 48% of Luxury Clients in 2013

Over 70% of Luxury Clients were White

Client Profiles Luxury BuyersTraditional Buyers Luxury SellersTraditional Sellers Age46 Years38 Years60 Years46 Years Median Household Income $350K$125K$275K$140K Marital StatusSingle (57%); Married (24%) Single (37%); Married (63%) Single (44%); Married (30%) Single (32%); Married (48%)

Over 70% of Luxury Buyers were White

Over 70% of Luxury Sellers were White

More than four of five luxury repeat buyers owned more than one property Mean: 2.4 properties Q. How many other properties does your last luxury client own?

International Buyers Are Purchasing Properties in California SERIES: 2013 Housing Market Survey and 2013 Luxury Clients Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

PROFILE OF LUXURY PROPERTIES!

Majority of Luxury Transactions were Traditional Sales

Luxury properties often had a hilltop or ocean view

Luxury Buyers intended Largely to use their Luxury Homes as their Primary Residence

Property Value Breakdown Median Price: $1,375,000

BUYING AND SELLING PROCESS

BUYING

Main Reasons for Purchasing a Home Q. What primarily motivated the client in your last luxury transaction to buy within the past year?

Reasons for Buying – All Homes First Time Homebuyers Vs. Repeat Homebuyers Q. What was the single most important reason for selling/buying the property? SERIES: 2013 Housing Market Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

The Median Number of Years that Luxury Buyers Intended to Keep the Property was 10. Q. How many years does the client in your last luxury transaction intend to keep the property?

One –Third of Luxury Buyers Paid with All Cash More than a third of luxury buyers paid with all cash The share of all cash buyers had been on the rise for overall sales until this year SERIES: 2013 Housing Market Survey and 2013 Luxury Clients Survey SOURCE: CALIFORNIA ASSOCIATION OF REALTORS®

Majority of Luxury Home Clients used their Personal Savings as the source of their down payment What was the source of the down payment in your last luxury transaction?

Luxury clients utilized their personal contacts to find their agents. Q. How did you find the client in your last luxury transaction?

How Agents Find Luxury Clients Q. How did you find your client in your last luxury transaction?

Agents spent about 5 weeks on average looking for properties with their luxury buyers Q. How many weeks did you spend looking for a property with your client in your last luxury transaction? Q. How many properties did you view with your client prior to the client making a purchase in your last transaction? A luxury buyer typically viewed 10 properties with his/her agent before making a home purchase. A traditional buyer viewed 10 properties with his/her agent before making a home purchase

Luxury Home Buyer Made Fewer Offers Than a Typical Home Buyer Q. How many offers did your last client make on other properties?

SELLING

Main Reasons for Selling Luxury Home Q. What primarily motivated the client in your last luxury transaction to sell within the past year?

Traditional Sellers - Reasons for Selling Q. What was the single most important reason for selling the property?

Luxury Sellers Typically Keep Their Properties Longer than Traditional Sellers How many years did the seller own the property in your last luxury transaction?

Luxury Home Sellers Received Fewer Offers Than Traditional Home Sellers Q. How many offers did your last client received?

Over a Quarter of Luxury Homes Sold Above Asking Price Q. What was the initial/listing price of your last transaction? Q. What was the final sales price of your last transaction? A luxury home typically sold with 1 percent discount below its asking price in 2013 A traditional home typically sold with 0 percent discount below its asking price in 2013.

Over 9 out of 10 Properties were marketed through an MLS Q. How was the property in your last luxury transaction marketed? Select all that apply.

Marketing through the MLS was still the most effective way to sell a Luxury property. Q. Which of these marketing techniques was most effective in your last luxury transaction?

The Median Amount spent on marketing a luxury property was $1,000. Q. Which of the following professionals did you hire to help assist you market the property in your last luxury transaction? Select all that apply.

Marketing Breakdown The median amount that sellers spent on a photographer was 300 dollars. The median amount that sellers spent on a videographer was 250 dollars. The median amount that sellers spent on a designer was 500 dollars.

Luxury Home Prices Are Expected to Increase Luxury BuyerTraditional Buyer Luxury SellerTraditional Seller 1 Year Up71%36%67%43% Down1%20%2%21% Flat/Unsure27%44%31%36% 5 Years Up79%60%76%58% Down3%17%3%23% Flat/Unsure18%23%21%19% Q Do you think home prices in the neighborhood where you purchased will go up, down, or stay flat … in one year, in five years?

What Luxury Clients Needed the Most Assistance with?

The Takeaway Sales of luxury properties will grow steadily as the economy continues to improve International buyers are purchasing high-end properties in California Luxury clients need help, especially in the negotiation process Keep in touch with your clients