Setting the correct asking price matters when selling any home, but that is doubly true when it comes to luxury properties. A glass-enclosed wine cellar, a steam room or a horse stable may be the X factor that sparks an offer, but sellers cannot bank on uncommon features resonating with every buyer who comes through the door.
The complexity linked to pricing high-end homes when few comparable properties exist makes the luxury market a specialty among Realtors, says Gar Lowenguth, licensed broker and associate at RE/MAX Realty Group.
“Not everybody can deal with it,” said Lowenguth, a 35-year veteran of
the real estate industry. “Not everybody is known for it.”
Selling a high-end home without the representation of a broker or an agent is even more difficult than doing so with a starter home, Lowenguth added.
“You either give it away…or you put $100,000 or $150,000 on top, over what it should be, and you don’t sell it,” he said. “Then it gets a bad rap.”
When a home has a price tag of $750,000 or more, buyers look for “upgrades from what you would typically see in a more standard cul-de-sac or development kind of house,” said Trip Pierson, owner of Mitchell Pierson Jr. Inc. Realtors. A gleaming kitchen with top-shelf kitchen appliances and a master bathroom with a soaking tub and a walk-in shower with multiple body jets are at the top of a well-heeled buyer’s checklist.
Uncommon exterior features, including broad swaths of facade accent stone, also have become part of what buyers of luxury homes expect, said Jeffrey Smith, CEO of Pittsford-based Woodstone Custom Homes Inc.
“Over the last two years, we’ve seen substantially more money being spent on tile work in the homes, both in selections of the tiles that are unique as well as quantities,” he added.
“One thing that has been very constant has been expenditures on cabinetry in kitchens and bathrooms, countertops in kitchens and bathrooms, and appliances,” Smith noted. “And that clearly is where we see substantial differences between a modest-priced home and a higher-end home.”
Given that the median sale price of a home in the Rochester area was $130,000 in 2017—marking an increase of 4 percent over 2016, according to Greater Rochester Association of Realtors Inc.—luxury homes are far from common in the Rochester area. Only 30 houses listed at $750,000 or more were available in Monroe County as of early March; Ontario County had 13 in that price range.
Across the price spectrum, a lack of inventory continues to be a challenge for the local residential real estate market.
According to Greater Rochester Association of Realtors, 3,135 homes were for sale in the region in 2017, a 12.4 decline when compared with the 3,578 homes on the market in 2016. The inventory of available homes was 4,818 in 2015, versus 5,009 in 2014.
For some buyers, luxury living means being on the water. One available property that fits the bill is 340 Rock Beach Road in Irondequoit. Built in 2003, the six-bedroom home has 84 feet of frontage on Lake Ontario and a spacious patio with elaborate awnings. Its interior features range from radiant heated floors to a three-story turret. The home is listed at $1,295,000.
“The master suite has beautiful views, but it also has beautiful walk-in, his-and-hers closets,” said Pierson, whose company has the home’s listing.
For other buyers, luxury living means having minimal upkeep. A three-bedroom townhouse built last year at 81 Barrington St. in Rochester falls in that category. Listed at $729,000, the home has 10-foot ceilings, 8-foot doors, and “you can go in and pick all your (finishes),” said Lowenguth, who has the listing.
Over the past few years, the luxury home market has slowed a bit, said James Yockel, CEO of Greater Rochester Association of Realtors.
“Everything seems to be driven by a critical—at this point—lack of inventory” affecting every price range, he said.
Exactly how the recently enacted federal tax reform law will affect the market remains to be seen, Yockel said. One provision in the law caps the mortgage interest deduction at $750,000 of debt—down from $1 million.
“I don’t think (the law) will stop deals from happening,” he added. “But certainly, it’s an impact on value, and we’ll see over the next couple of years if property values take a hit.”
Some people who own waterfront homes in the Finger Lakes are having a hard time staying put because of rising taxes, Yockel noted.
Even so, surging consumer confidence bodes well for the future.
“The spring always brings flowers and optimism,” Pierson said. “The last several springs have been very hot (in terms of sales) in most of the markets for a percentage of houses available. And so, hopefully, that will carry through this year as well.”
Sheila Livadas is a Rochester-area freelance writer.