Real Estate: High End Holding Up
The U.S. housing market remains in a severe slump, and some analysts predict the worst is still to come, but high-end buyers, flush with cash and unaffected by higher interest rates, continue to pick up properties.
Tyler Mathisen of CNBC's "High Net Worth" sat down with Roger Erickson, senior managing director of Sotheby's International Realty, to get some insight into the high-end real estate buyer, in a CNBC.com web exclusive
Erickson, who deals with numerous celebrities and business leaders, says there's no shortage of demand among his upscale clientele. "The only shortage we have is the properties themselves," he says.
When Erickson's customers go shopping for real estate, they're especially looking for the distinct characteristics that will set their home above all the rest.
"The first key element I find a high-end buyer looking for is that 'wow' element that's associated with a property," Erickson says.
In Manhattan, that includes things like dramatically high-ceilings, terraces, and swimming pools, he says, citing one customer who fell for an apartment in Manhattan's Tribeca thanks to its 60-foot indoor lap pool. In places like the Hamptons and Greenwich, Conn., an ocean view or otherwise tranquil vista can make the difference.
With all of the amenities buyers can add on to their luxury homes, Erickson says one basic buying principle hasn't changed: size matters.
"Size is really important to the high-end buyer," he says. "In Manhattan, very frequently they will be putting together two or three apartments, or looking for that townhouse with twenty or thirty-thousand square feet."
Outside of the city, Erickson says, buyers are knocking down homes and rebuilding larger mansions.
And high-end buyers seem to avoid the pitfalls of the average real estate customer, chiefly because of the business smarts they use in their professional lives.
"The high-end buyer seems to be a very successful individual who does well in their business and it seems to carry over to their real estate purchases," Erickson says. "They really know how to do it."