Jeff & Paulia Kennedy and Debi Jones

While the real estate market has seen many changes over the last couple of years, it appears that the luxury market is facing even greater challenges. While it has become more difficult to sell a luxury property, it is still possible and we are able to get it done!

Here's the Bad News ... (As reported by the Luxury Home Marketing Institute) The luxury market is facing increasing pressure, aggravated by credit market difficulties in the jumbo mortgage market. As a result, The National Association of Realtors reported that the share of home sales above $750,000 has fallen from 4.4% of total home sales in 2007 to a projected 2.3% of total sales in 2009 (NAR Projection based on partial year statistics).

Limited loan availability, higher than usual interest rates for jumbo loans (from 150 to 200 basis points higher than conforming loan rates), and stringent loan qualifying requirements have slowed sales of luxury properties. This has caused the national inventory level of homes priced above $750,000 to rise from 18 months worth in 2007 to more than 40 months worth as of the second quarter of 2009.

The lack of refinancing opportunities, fewer qualified buyers for luxury homes, a growing inventory of unsold luxury homes, and an economy in recession are all creating the "perfect storm" for luxury homeowners who need to sell and can't. NAR also reported that as of October 2008, the foreclosure rate on jumbo loans was more than double the rate on conforming loans.

Here's the Good News ... While the above facts are creating greater challenges for us, as Realtors who consider the luxury home market our forte, we are steadily looking for options for our luxury home owners in selling their property.

In fact, we made a trip to the closing table today, representing the seller of a luxury waterfront home today, with a selling price of $1,100,000 here in Hot Springs, Arkansas.

One of the most critical bits of criteria for this home sale was the fact that this luxury home had all the basic necessities - meticulously maintained, in perfect condition, appraised for the selling price or better, and had a great location. Knowing that we had a great home that we believed would pass the inspection and appraisal process, along with the fact that we had an extremely savvy businessman as the seller, we began to look at options for him and his wife.

We knew that our seller's first interest was to sell the home outright and move on. However, in this difficult market, we realized the chances of that were getting slimmer based on the facts mentioned above. We began to discuss the "trade" option to our seller, as we believed that this would be an option for our savvy seller to reach his final goal more quickly, while he sold his large luxury home, and then scaled down to a smaller, more sellable property.

We then reviewed all the previous potential buyers who had expressed any interest in the home, and believed that we had one that would love to buy the home at a fair price, but he also needed to sell his waterfront condominium (valued around $400,000) at the same time. We approached this buyer's agent and began discussing a trade option, and to make a long story short ... it was a perfect match.

The trading of real estate property does take some creative matchmaking skills and extra work, and it can be done as long as we have the two major ingredients ... 1) Great property and 2) Savvy seller willing to consider options.

Debi Jones of the Kennedy Team volunteered as one of the auction items in a local fundraiser for the American Cancer Society sponsored by Reed Plumbing last week. While Debi was glad to help with a good cause, Debi knew that it would be an interesting evening when she agreed to be one of the Bachelorettes to be auctioned off to an unknown bidder. Jeff and I (Paulia) attended the big event and enjoyed the show of Bachelors & Bachelorettes as each paraded across the stage, anticipating who would be their next date. When it came Debi's turn on stage, Debi turned beat red as she stood and watched two nice gentlemen begin a bidding war for her. Glenn Wilkins wound up as the lucky winner with a date with Debi, and the American Cancer Society appreciated the generous donation he made.

Paulia forwarded an interesting article to me entitled, "Top 10 Fashion Colors for Fall Provide Clues to What's New in Home Décor" from here.

Sellers seeking advice from listing agents who wish to update their properties with the freshest colors can take a look at the fashion industry for direction. A color palette seen first on the fashion runways is picked-up by decorators and builders from wall paints to furnishings, towels and placemats. The Top 10 colors for 2009 can be downloaded and viewed here . This year's color range spans from semi-bold hues to catch a consumer's eye to a collection of subtle, basic colors which coincides with today's economic uncertainty. All of the 2009 colors are harmonious with each other reflecting our country's desire to 'get back on its feet'.

Color hues range from American Beauty Red, which is described as a 'feel good color' depicting cohesiveness and patriotism. Fashion designers such as Charlotte Ronson selected the color Iron for her collection, which has been described as today's 'new black'. Iron can be illustrated as a deep gray which pairs well with other metal colors, deep navy and chocolate browns. Ms. Ronson found inspiration with Iron to be "...a Postwar decadence that combines elements of military menswear with feminine tailoring." Since our country is still embattled in war with Iraq, the color Iron reflects today's cautious atmosphere. Home décor will also reflect the same. With widespread hope mirrored through a new President and the change promised, today's hue reflects this tenacious optimism.

"According to Pantone, in this time of economic uncertainty and political change, optimism is paramount and no other color expresses hope and reassurance more than yellow." The top color for 2009 is Mimosa.

Agents offering advice to sellers choosing to update their homes can refer to the PANTONE® fashion COLOR REPORT fall 2009 for a complete list.

Home decor updates do not have to be extensive or expensive color changes either. Homeowners can create a table setting with today's hues, change towels, paint a door, add rugs or change-out lampshades for example as each of the listed colors is compatible with each other as well as with most neutral tones. Builders consulting with decorators, agents and stagers can offer the similar options and can present wall colors reflective of this appealing palette.

These colors give a fresh new look to properties and just the right colors can set one home apart from another. In today's competitive market, updated 2009 colors may just be that edge agents need to sell a home.

Janine Gregor
Virtual Assistant

Website statistics for our primary web site, www.BestofHotSprings.com broke another record today! This site had 76,348 total hits during the month of March. That tells us that the real estate market is very active and heating up!

Along with this great news, one of my favorite financial analyst, Dave Ramsey, appeared on Fox News today and gave his opinion on the economy with much focus on the real estate market. Dave believes that the housing market will be the major player in getting the economy back in shape. He called attention to the most recent report on home sales being up around 5% in February nationwide. He also reiterated the wonderful opportunity for home buyers at this time with terrific interest rates around 4.5%, there is a huge inventory of homes to pick from, and then wrapped it up by stating it's the "best opportunity for buyers in 50 years". Dave also predicted that the real estate market would be "vibrant" by this fall and "on fire" by next spring. When asked "if we've hit the bottom yet?". He stated that he thinks we may have hit the bottom about a month ago and we're now on the upswing.

I tend to agree with Dave Ramsey, as we are seeing many signs of the upswing. Let's get busy and have a wonderful 2009.

It's a great week this week in Hot Springs. The spring weather is here with temperatures in the 70s, the Bradford Pear trees are blooming, the lake levels are back to normal, and the streets are packed with tourists in town for the horse races. You can feel the excitement!

On top of all this great news, our local Chamber of Commerce made the headlines in the local newspaper with their very positive reports on statistics. Here's some of the information that they reported earlier this week:

• Arkansas's unemployment rate is currently 6.4% - much better than the national average at 8.1%
  
  
• Hot Springs unemployment rate is 5.9% - even better than the state & national average, and also improved from Hot Springs' rate 5 years ago at 6.4%
  
  
• Hot Springs experienced a 28% growth in per capita income since 2004. This is the highest percentage growth in Arkansas.
  
  
• Arkansas experienced a 3.8% increase in tourism in 2008, & a portion of that increase can be attributed to Hot Springs, which saw a 1.54% increase in hospitality tax collections.
  
  
• As a major contributor to the tourism sector of Hot Springs, the Oaklawn Horse Racing Track is seeing higher attendance than virtually ever other race track in the country. Attendance at every race track in the U.S. is down by an average of 30%, while "Oaklawn" is up 2% over last year in attendance and bets made.
  
  
• Home prices in Hot Springs fell only 0.35%, while Arkansas reported an 8.3% decrease. Home values are holding in Hot Springs.

In addition, we are also pleased to report that our web site: www.BestofHotSprings.com is booming with hits. We are now averaging 55,000 hits/month over our last year's average at 35,000 hits/month. This tells us that we have more interested buyers out there.

So let's turn the TVs off and get out & enjoy some wonderful Hot Springs.