Isle luxury real estate cheap to some buyers
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Compared to the rest of the global high-end home market, Hawaii's luxury real estate is almost cheap, according to according to two mainland specialists.
Few real estate offerings across the state are priced high enough to make Unique Homes magazine's top-1,000 list of luxury homes around the world, which this year has a minimum price of $11.5 million. And none make the magazine's top-10 list, which starts at $75 million.
But Sharon and Tami Simms, two Florida-based luxury real estate marketing specialists in town to teach agents how to cater to the ultra-affluent, say Hawaii's lifestyle gives homes here an emotional connection to buyers who might otherwise set their sights on a higher price range.
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However rarified it may seem to most homebuyers, Hawaii's luxury real estate market is competitively priced, according to two mainland specialists in extreme high-end properties.
"Really, the definition of what's the top end of wealth varies by individuals," said Sharon Simms, part of a mother-and-daughter team in town this week to teach local agents how to cater to ultra-affluent buyers. "There's a billionaire in India whose current home is a mere 27-story skyscraper and it's not big enough -- so he's working on 60 stories. I've also seen $155 million spec homes built in Montana."
Sharon and Tami Simms, Sharon's daughter and business partner at Re/Max Metro in St. Petersburg, Fla., are certified luxury home marketing specialists and certified international property specialists. In addition to their teaching duties this week, they also attended the National Association of Realtors Certified Residential Specialist Sell-a-bration, which drew Realtors from all over the country.
Few real estate offerings in the islands are priced high enough to make Unique Homes magazine's top-1,000 list of luxury homes around the world. The current cutoff for the top-1,000 list is $11.5 million, and a property must be priced at $75 million or above to make the magazine's top-10 list, said Sharon Simms.
While there are 289 Hawaii listings on the Unique Homes site, ranging from $900,000 to $23.7 million, only seven of these homes would be eligible for the magazine's top 1,000 list.
Hawaii may not have the world's ber properties among its inventory, but it does have a very attractive lifestyle -- which offers an emotional connection to buyers and makes homes here more competitive in the global marketplace, Simms said.
"Most luxury investors or buyers are not buying principally for investment, they are buying lifestyle, and you've got that all over the place," she said.
The state's proximity to Asia-Pacific nations -- where real estate investors have nearly doubled the allocation of the net worth that they have invested in real estate -- is a positive sign, too, she said.
In addition, technology has made Hawaii an ideal place for semi-retired baby boomers, a group that is expected to have a significant impact on the multiple-home market, she said.
Also potentially appealing to top-end buyers shopping Hawaii's high-end market are the new branded-luxury fractional ownership, vacation-ownership or hotel residential suite properties, said Tami Simms.
"Trump Tower and the Ritz-Carlton Residential Suites are the kinds of lifestyle ownership opportunities that get attention from the high-end market," she said.
Foreign buyers also will continue to play a major role in the luxury real estate market for Hawaii and other parts of the U.S., but there are a few challenges on the horizon, Sharon Simms said.
While most foreign buyers pay cash for properties, the recent drop in interest rates has further weakened U.S. currency, which has the effect of discounting U.S. real estate for them, Simms said. However, in order to really capitalize on this trend, the U.S. will have to continue easing access for international travelers, she said.
"Despite the fact that the U.S. is on sale because of our currency, there are visa issues," Simms said. "There are some real estate people lobbying, but not nearly what it should be."
Simms said she's like to see the United States continue to ease access for international visitors as well as consider the possibility of creating retirement visas for qualifying travelers.