With more sellers than buyers in the real estate market across the country, listing agents will need to employ more sophisticated approaches to marketing homes. In the Durharm luxury home market which had been slow even before the general market, these new approaches require even more urgency.  The preliminary data that I’ve looked at indicates that only four homes in the $700K or more segment will have closed in the last quarter of the year out of 70 listings on the market.  That is several years worth of inventory to absorb at that rate and every indication is that more homes would come on the market if conditions were more robust.

Summary

The five part series addressed the topics described below.  I’ve categorized all these in a category I’ve created for the occasion called “Special Marketing Series.” This means that all five plus the introduction and this summary can be accessed from the “Categories” drop down menu on the left margin of the blog. I’ve also made the outline that follow links to the individual posts that will each open in a separate window (in Internet Explorer) or a separate tab ( in Firefox) if you want to read them in the order they were posted.

Introduction

Set’s the stage for the rest of the series.

1. Pricing

Luxury home pricing is paradoxically more difficult but less important in the luxury home market than it is for “commodity” homes with lots of good comps.

2. Product

We think of the product in terms of bricks and mortar but it is much more than that. Location is important but not under your control.  There are lessons from other industries about enhancing the product that can be applied.

3. The Internet

The internet isn’t just about mastering technology. The savvy agent knows how to take advantage of Web 2.0 capabilities to improve marketing.

4. Promotion

Thoughts on writing good copy with some suggestions about making copy more senual.

5. Channel Marketing

Applying a concept from B2B marketing to the marketing of homes. In other words, focusing some of your marketing effort on the buyer agent.

Please feel free to share any of this with anyone you know contemplating selling a luxury home or even your agent if you already have one  through the “Share This” button at the end of each post. You can also contact me directly at jay@jayzenner.com or by my cell phone at 919.819.6666.

Stan Lee and Me

The many years I spent in bank marketing I thought were pretty interesting but I notice that people’s eyes glaze over when I talk about how bank marketers had to learn a whole new set of skills during the period of deregulation in the late 70’s and early 80’s and how there are many parallels now with the changes taking place in real estate. But not all my marketing career was in boring banking. The picture is of me, Stan Lee and three of his comic book creations, Spiderman, Captain America and the Silver Surfer taken at a tradeshow when the group I was with was doing public relations for the Marvel Comic trading cards.

Trade Show Marketing

Later I helped run a tradeshow exhibit company and went to the annual Comdex Computer show in Las Vegas on several occasions. Many of the companies that we represented spent 20% or more of their marketing budgets at these shows and there wasn’t a consumer anywhere near them.

All this effort was directed at their “channels” that actually took their products and sold them or incorporated them in there own products.  The Spiderman gig was at a large show for convenience store operators in Dallas. We were selling our product to the convenience store operators so they would buy them from us and sell them to their customers. Providing great packaging,  point-of-sale displays and pricing incentives to the retailers was all part of the game.

Go figure…Figurines!

In another gig, I helped launch a line of collectible figurines. (Well, we tried anyway.) In that case we were going to the major gift shows in cities like New York and Atlanta to try to get the best “rep” groups to carry our products. These groups often maintained showrooms in the key cities and hired sales reps to sell product all over the country. A rep could represents dozens of manufacturers like us. (more…)

I had intended on finishing the five part series on marketing luxury homes in the current environment before I left for a few days for Christmas and I may still, but I ran across this video that might interest any luxury blog followers that are still trying to think of meaningful gifts to give.  This is a tremendous idea.

V8 engine in a Q45 Infinity

The most dramatic lesson I ever had about writing copy wasn’t even written down. I was shopping for a car and had my eye on a used Infinity Q45 that was at a Lexus dealership in Raleigh.  As I was pondering my decision the salesman happened to mention that he had driven the car home one evening. I think his exact words describing the car were “That car has balls.”  That pushed me right over the edge and I drove that car for two years and loved it even though the mpg was terrible and it was the most expensive car to maintain and repair that I’ve ever owned.

My point is, that whether it was intentional or not, that salesman didn’t describe the horsepower or the handling or the leather interior, instead he described the experience of driving the car in a way that most guys can relate to.  If GM survives its current difficulties, Pontiac and Saturn may join Oldsmobile in oblivion but Cadillac will live on because it has been able to reposition itself from a stoggy luxury land yacht to something sexier. What does the hot babe with the husky voice from Private Practice ask as she speeds away in her gleaming red STS into the lights of the city…”When you turn your car on…does it return the favor?”

When you’re competing with other sellers for the few buyers in the market, turn them on with better copy.

(more…)

Does getting this 100 times a week make it more believable?

Sometimes I wonder as I delete the 100th spam email that somehow gets past spam filters on the server and my computer whether the internet will be like our financial system and someday collapse under its own weight. The internet can be profane, invasive, distracting and misinforming. It gives voice, however feeble, to the ignorant and insolent and strange people compelled to share the intimate details of their lives minute by minute.

But…

the internet is also very useful. In the business of marketing real estate, including high end homes, the web has practically pushed print advertising into the recycling bin of history.

We are now in the era of the Semantic Web or Web 2.0.

For a thoroughly befuddling definition of this you can go to Wikipedia. But I’ll save you the trouble. What Web 2.0 really means is that using the web in increasingly more sophisticated ways is getting easier and easier. (more…)

If you ever need your spirits lifted around Christmas and have seen It’s a Wonderful Life about ten too many times, pretend like you’re twelve again and watch a dog story. I was going to do this article last night but flipping around the channels I came across Firehouse Dog about a third of the way in on HBO. Rex is a movie star dog who gets lost and found by a young boy whose Dad is the Captain of a fire company that is about to be shut down. Without revealing the whole plot, Rex becomes the station mascot, saves several lives, the relationship between father and son, the firehouse and puts a crooked politican and an arsonist behind bars. Of course, everybody lives happily ever after.

Ah, if only the real estate market, which feels like the firehouse on fire, had a clever mascot like Rex to pull it through. Markets don’t work that way though. Residential real estate will not be “rebuilt” the way the firehouse was in the movie. There will be fewer real estate agents and they will be doing things differently and doing them within different kinds of real estate offices.

Marketers, not Salespeople

One of the inevitable changes will be that agents generally and especially listing agents are going to have to learn to sell houses as well as themselves. (more…)

Pricing in the luxury market is trickier than in what might be called the “commodity home” market.

The more unique a home is the more pricing becomes an art than a science. As a ridiculous example in a post in March I used the example of an estate in Lake Tahoe pictured below that was on the market for $100,000,000. Nobody would believe that that nice round number would be the result of a careful appraisal by a licensed professional. Traditionally, pricing analysis whether by an appraiser or a real estate agent is based on “comps” or comparable properties that have recently sold. For properties such as this there are no comps. The most expensive home on the market in the Triangle this year was a home in north Raleigh that originally listed for $23,000,000 but that price was quickly dropped by $12,000,000. The listing has since expired with no sale.

The vast majority of homes in Durham that would price over $700,000 are not quite that unique and would warrant some analysis for pricing.

In this price range I would strongly recommend anyone contemplating listingto get an appraisal.  This does not mean that you have to put the home on the market at the appraised value but it does give you a place to start. (more…)

Anyone planning to put a luxury home on the market in the spring will start thinking about it months in advance under normal conditions. Since conditions in the real estate market are anything but normal now, Christmas is not too early to begin planning a market launch in the spring.

Two Themes

Two themes have been emphasized in this blog which has been targeted primarily at homeowners in Durham. The first theme is that the relatively poor performance of the luxury market in Durham compared to its neighboring communities is primarily the result of an out of date image of the community. There have been many posts on why the reality behind the image has changed substantially and the real estate community must do its part in advancing a newer, more flattering image. There is no shortage of material to support this theme.

The other theme has to do with the need to shift to more sophisticated marketing in a slow market.  Even without a nationally depressed market, the Durham community is competing with communities that don’t have the burden of some of the lingering image problem that it is saddled with.

To finish up the first year of the Durham Luxury Real Estate Report, I’ve outlined a series of posts that relate to this second theme. Much of the substance of these posts can be found in more detail in the           Durham Luxury Home Report, which was penned early last Spring, but these posts will include some new tips that have been learned in the intervening months.

The Marketing Plan

As a veteran marketer who had worked in many industries I was initially surprised when I began my real estate career by how superficial the marketing plans were that we were taught to prepare for listing presentations to potential sellers. What I had failed to take into account was that in a sellers market with more buyers than sellers, you don’t have to be too sophisticated to get a home sold in a reasonable amount of time. If you don’t know any better, the only option in times like these is to simply wait for the market to improve. But if you really want to get your property sold the only answer is to be more competitive.

With that in mind, here are the topics that we will deal with in the next couple of weeks in the hopes that they will offer a few insights into what a more sophisticated marketing plan would look like. (more…)

I got a nice note today reminding me that not all that is great about Durham is shiny and new like the Performing Arts Center. Shelly Green, the COO of the Durham Convention and Visitors Bureau emailed me that she had put a copy in the mail to me of the 2009 Historical Calendar of Durham as thanks for helping promote Durham here on DurhamLuxRE.

What a nice gesture and I’m looking forward to getting the calendar. According to Shelly it was inspired by the book, Brighter Leaves: Celebrating the Arts in Durham, North Carolina. (more…)

A brief article in the business section of the New York Times this morning chronicled the impact the economic downturn is having on publications geared to the upscale market including the quarterly from Time magazine called Time Style and Design and the NYT’s occasional New York Times Style Magazine. These publications, of course, are meant to be a targeted advertising medium for products aimed at those with lots of disposable income. Whether this is the true readership may be open to debate in light of the article’s droll assessment that buying all the advertised products in the Winter Edition of Time Style and Design would cost more than $51 million or more than 340 times the annual income of the average reader.

Conspicious consumption is out

In times when so many people are facing foreclosures and bankruptcies, flaunting wealth just doesn’t seem very stylish and the ad revenues of the magazines are suffering. You could argue that ostentation is never stylish. I would say that in Durham the urge seldom gets beyond “keeping score” to the level of “flaunting.” (more…)

Inman news is a real estate industry site “Where Real Estate and Technology Connect.” There are usually blog-like discussions going on about various topics in the real estate industry. This morning’s lead article was nominally about how real estate offices must shrink (to reduce costs) but was really more handwringing about where the industry is going. To me these kind of discussions still miss the point that not just the industry but the way we sell homes must change. So, I jumped into the discussion with this post. I’ll repeat it here because it contains a theme that is central to what I preach here and also because I have neglected this site recently to work on some others. Even though it’s not directly related to luxury real estate in Durham, you may find it interesting that this kind of discussion is going on within the real estate community.

I agree completely that during tough times sellers will seek out the best representation and will not be as determined to negotiate compensation down. What seems to be conspicuously absent from the conversation in the industry is what makes one agent better than another. (more…)

The Traditional Elements of the Marketing Mix

When I first got my real estate license I assummed that my many years of marketing experience and the knowledge I had acquired renovating and flipping a couple of condos would be a good basis for my new career.

I was mistaken.

I didn’t fit the profile at all of what the industry considered a potentially successful agent. In fact, I wasn’t very successful. What the industry traditionally looks for are the gregarious type that is willing to network incessantly at the country club, church, kids’ school, etc.  Many of the most successful agents religiously maintain contacts with past clients and prospects and love doing it. They are gregarious almost to a fault.  A managing broker looked for people who could envision their faces on billboards and bus stop benches and relished being recognized in the supermarket as the local “top producer.”

Agents typically get two types of training.

Initially most of it is associated with obtaining and keeping a license. It is designed to keep them out of trouble and protect the consumer. It focuses on the legal concept of agency and using the appropriate forms.

The other training focus was on drumming up business. It relied on tried and true practices for farming neighborhoods and communicating with past clients and working your “sphere of influence” that included family and friends. Even things like print advertising and open houses which appear to be selling homes are really more useful for promoting the individual. (more…)

Find the dog in the picture

Dogs have been on my mind lately.

The national news tonight ended with a story with speculation about what kind of puppy our president elect’s two daughters would choose after he announced in his victory speech that this is one promise he could keep with little difficulty. Personally, I hope the Obamas can find and adopt a shelter dog. Because one of the girls has allergies, the speculation is that they will choose one of the breeds that don’t shed, like a poodle.

Bitchin Frizzy

The dog in my life for the last 12 years is a bichon frise, which is also one of those breeds that doesn’t shed. Dusty (as a puppy he looked like a dust mop) was not a shelter dog. If I had wanted a dog I would have gotten a shelter dog like all the other dogs in my life. He was a surprise gift from my ex-wife (before she was ex.) She was thinking more about her furniture than allergies. When she finally realized that puppies have to be trained to go outside to relieve themselves and teeth on anything they can reach it was too late. She came to hate him but he became my buddy. According to her, he was a major factor in our breakup. Whatever. (more…)

A time for cheerleaders

Bob Ashley’s column in the Herald-Sun this morning is a wrap-up of the year’s designations for Durham from a variety of sources. We’re among the best places to retire, ride out a recession, get a great meal, start a business and on and on.  The one thing Bob recounted that struck me as telling was a family discussion about which Thai restaurant to go to. Whew…we’ve come a long way in the last 20 years.

The surfers are out while the storm approaches

As the economic hurricane bears down on us it is important to get out of the surf, put up the storm shutters and maintain these gains and be prepared to press on afterwards. But a word of caution is in order. In a difficult economic period it might be tempting to think enough has been done. This, in my humble opinion, would be a mistake.

Keep the tips coming

We will have a choice to make in the coming election about the prepared food tax. This measure is supported by most of the key people and organizations that have been behind the restoration of Durham’s image as a great place to live. It specifically targets programs that would continue to build on this good work and it will spill over into improving the overall real estate market in Durham and especially the luxury home market because it does emphasize amenities.

The less obvious need

But amenities are the sizzle. There still has to be substance. Much of the poor image that Durham is finally turning around was not based on a lack of amenities for the well off but from a legacy of poverty, struggling schools and crime. (more…)

Wachovia Bank Stock Performance

The decline of an icon

The spectacle of a New York bank, Citicorp, and a San Francisco bank, Wells Fargo, picking over the bones of Wachovia is enough to make you sick.

In the late seventies I spent two years working for Wachovia in Winston-Salem as the product manager for retail deposit services. When I was recruited to return to Richmond, my hometown and work for my original bank employer (now, like my last bank employer, CCB, absorbed by SunTrust) my colleagues joked that I had just been away getting an advanced degree at Wachovia. In the banking world Wachovia was considered very conservative but a pioneer in retail marketing. Their credit card business was tiny by big bank standards and most “Personal Bankers” wouldn’t lend to you if they didn’t think you could handle it or that it was not in your best interest. Wachovia was jokingly called Watch-Over-Ya Bank.

But this attitude began to conflict with pressures to grow. (more…)