When I wrote the Durham Luxury Home Report for 2008 (which is available through a link on the sidebar on the left) the most expensive listing in the Triangle Multiple Listing Service (TMLS) was an estate in North Raleigh that was listed at $23,000,000. This property had been on the market at that price since September. On January 8th the price was reduced to $12,000,000, a reduction of almost 50%. What’s this about?
I don’t know how the home was priced originally or much about it other than what is in MLS (which isn’t much…this is the only picture) but I do think that it illustrates one of the things I discuss in the report that make luxury homes different from most homes, that is, that pricing isn’t terribly elastic. In other words, a drastic price reduction may not bring a horde of buyers. Buyers in this segment are not spending their last dollar for shelter. Buyers in this segment are usually making a statement when they buy a home. It could be as uncomplicated as “I’ve arrived.” For the Seller/CEO and the Listing Agent/Marketing Director this means that the product and how it is positioned may be much more important in the marketing mix than pricing.
Because of the drastic price reduction on the north Raleigh estate, I may have to back off of my offer to rebate $100,000 of the commission and sponsor a Habitat home in Durham in the name of any seller I represented in the purchase of that home. One or the other. Maybe. But everything is negotiable.
