We are now six years into the “Baby Boomer Sell-Off” of their luxury homes, that is as the Baby Boomers reach 65 (9,000 per day) they are putting their homes on the market to down-size, change their life style, or move closer to their children.
If you use Greystone, a gated golf community of about a thousand homes in Birmingham, as a microcosm we see that since 2011 each year about 30 homes priced between $750,000 and $2,500,000 come to market and 16 of them sell. Because of this many of these homes linger on the market for five to ten years. In some cases, the homeowners move on and leave their homes empty, losing their homestead exemption, seeing their property and causality insurance double and still having to maintain the home and the property. Thus, these homes become a cash drain on their retirement years.
I was recently told by a homeowner who had moved to their beach home, “We spend 10 to 12 days a year in this home and it cost me $100,000 a year in lost investment opportunity costs and maintenance and upkeep of the home. I’ve had it on the market for three years and haven’t had that first offer. We can’t even get anyone to look at the house.”
In another case a doctor was transferred to Ohio in 2010 and put his Mc Mansion on the market for $1.8 million and moved out, three years ago the home was vandalized and he had to put another $60,000 into the home. It’s now priced at $1.2 million and no-one is making an over on a home that has been vacant for 7 years.
This will continue for about five to seven years and those who can will wise up and get their home priced and presented competitively so that they are one of the sixteen out of thirty that sell this year.
The Great Baby Boomer Die-Off
After decades of waiting, the much-anticipated mass Baby Boomer Die-Off should finally commence within the next five to ten years, Census Bureau officials said Monday.
"I am pleased to announce that it won't be much longer now," Census Bureau deputy director Arthur Clausewitz said at a press conference. "According to our statistics, by 2009, we should see the Baby Boomers start to die off in large numbers. Heart attacks, strokes, cancer, kidney failure—you name it, the Boomers are going to be dropping from it."
Clausewitz said the Great Boomer Die-Off should hit full stride in approximately 2015, when the oldest members of the Baby Boom generation—born during the last days of World War II—turn 70.
"Before long, tens of millions of members of this irritating generation will achieve what such Boomer icons as Jim Morrison, Janis Joplin, Timothy Leary and John Kennedy already have: death. Before long, we will live in a glorious new world in which no one will ever again have to endure tales of Joan Baez's performance at Woodstock."
This has begun in our microcosm of Greystone. I can take you to at least a dozen million dollar homes occupied by a widow. Half of them are on the market; “Before my husband died he told me what our home is worth and I won’t let it go for a penny less.”
When these women die, and they will die, these homes will be transferred to the kids who live 500 miles from Greystone in three different sates in their own homes and their instructions will be, “Just sell it and turn it into cash!” The fire sale will begin, by 2025 For Sale by the Estate Of will represent 30% to 40% of the luxury home sales in Greystone and the prices will plummet.
What’s the plan?
Sell now; market, price and present you home to sell now.
Know your numbers: Based on the past six years history, how many homes in your neighborhood and price range are going to sell over the next 365 days, at what price per square foot, with or without a pool, with or without a finished bastment, on or off the golf course, on or off the lake.
Know your Competition: If there are 15 homes in your neighborhood in your price range you and or your agent need to regularly visit each one of them and measure where you stand in the competition. If only 50% are going to sell you better be in the top 15%.
Know your buyers: Who’s going to buy your house? Your agent should attend every showing so that he or she knows what the potential buyers are saying, what they like and what they don’t like, are they local or from out of town. They need to be there to point out the amenities, features and benefits. Then when you get into negotiations your agent needs to know who you’re dealing with and how they reacted to your home at the showings.
Know your sellers: There’s a 90% probability that your listing agent will not bring your buyer through your front door, it will be one of 40 agents that sell 80% of the homes in your neighborhood. Your listing agent needs to produce an eight to ten-minute video of your home and put in the hands of those 40 agents.
Market your home: If your home is selling for $750,000 or more your potential buyers represent less than 2% of the population, they’ve been in their current home for at least five years, and they most likely are on Facebook, Pinterest, Instagram, and LinkedIn. Put that same video in front of them repetitively. It’s called Social Media Target Marketing, you see it every day when you’re on Facebook.
Present your home like a product: Your ultimate buyer will probably be half your age, they don’t want to buy their parents or grandparents home, so present them a white canvas that they can envision themselves in. Declutter, when they leave your home they should remember your home not your stuff. Have your agent give them a link to your 8 to 10-minute video; they’re going to see 5 to 6 homes today and another 6 tomorrow. Make it easy to remember your home.
You’ve heard that the real estate market is hot and it is in downtown Birmingham, in the close in neighborhoods and in the Villages but not down 280 and the other out-lying luxury neighborhoods. The days of putting a sigh in the front yard and waiting for a buyer to show-up are over. You need to hire a marketer/ salesman not a listing agent to sell you luxury home before the Great Baby Boomer Die-Off kicks in.
Kerry Grinkmeyer is with RealtySouth in Birmingham, Alabama. Kerry specializes in the marketing and sale of luxury homes.
Call Kerry at 205 919 6006 or email at firstname.lastname@example.org