“Once the Fed introduced a spike in the interest rates in 2022, the markets encountered strong headwinds and began to decline, both in volume and price increases. By the end of the fourth quarter, year-over-year prices had turned negative and the buyers had almost evaporated with multiple offers coming to a standstill. However, by the beginning of 2023, buyers have begun to reappear in the market and real estate prices have begun to inch back up. Admittedly, the high-end continues to outperform the low-end as those buyers generally don’t finance their real estate purchases. However, a change in the Fed’s policies can invigorate both the real estate and the stock markets and this seems to be the most likely scenario going into 2023.”
- JOUJOU CHAWLA, QUOTED ON PAGE 9 OF THE $10M+ NATIONAL LUXURY REPORT
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The average rate for a 30-year mortgage dropped to 6.15% last week, the lowest in 18 weeks. (CNBC)
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Influencer Marketing is now a $24 billion business and is being used daily in the real estate sphere, maybe it could be called FOMO marketing? If a REAL Housewife loves that house then surely I should too? (NY Times)
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While retail sales in general have been falling, and the stock market was down by 20% in 2022, spending on luxury goods and experiences grew by roughly the same amount. 2022’s boom in the $1.5 trillion market was driven almost entirely by Gen Z and Y, who dominated the personal goods market (including luxury clothing, bags, jewelry, etc). BAIN expects the spending of Gen Z and even the younger Generation Alpha to grow three times faster than other generations through 2030. So much for youthful worries about the materialism of their predecessors! (FT)
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11% of retirees who left their home state relocated to Florida in 2021. Rounding out the top 5 were Pennsylvania (10% of American retirees), North Carolina (10%), and South Carolina (9.4%).
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48% of the TOP US 25 cities with the oldest population are in Florida. 19% of Florida’s population is over 65, compared to 15% of the US population as a whole. In 2021, the vast majority of the US’s wealth (78.1%) belonged to older generations: baby boomers own a whopping 52.2% of the country’s wealth. The silent generation owns 15.2%. (PEW)
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Tennessee; the Volunteer State, was chosen by 13% of Americans moving out of state for retirement, the highest percentage of all U.S. states. Tennessee is the US state with one of the lowest tax burdens in the US, after Alaska, which is the most tax-friendly state for retirees because it has no state income tax or tax on Social Security. And its sales tax rate is the 4th lowest. However, the cost of living in Alaska is higher than in most states, including Tennessee, Wyoming, Delaware, Nevada, and Florida.
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Of the TOP 25 tax-friendly states to retire, NONE taxed social security income. New Hampshire is one of the best places to live for retirees to escape taxes. It has no sales tax (neither does Oregon or Delaware), no state income tax, and no tax on Social Security. The only reason New Hampshire isn’t the No. 1 tax-friendly state for retirees is because its property tax rate is the third highest in the U.S. and the highest on this list.
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Builders are offering ‘discounted mortgages’ to move inventory: In California, Pacific Point Communities is offering a 4-bedroom home at a mortgage rate “as low as 2.75%. In Texas, Pulte Homes is offering a 30-year fixed-rate mortgage at 4.25% for single-family homes with 3-5 bedrooms. And in various parts of the country, K. Hovanian is offering a fixed-rate mortgage at 4.99%.
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There are more grandparents around than ever before: almost 1.5 BILLION of them! Two big demographic trends show their rising importance. First, people are living longer. Since 1960 global life expectancy has risen from 51 to 72 years. Second, families are shrinking, which means the ratio of living grandparents to children is steadily rising. The growing roles of the elderly matter in varied and surprising ways. (THE ECONOMIST)
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In December, the percentage of subprime auto borrowers who were at least 60 days late on their bills climbed to 5.67%, a major increase (more than double) from a 7-year low of 2.58% in April 2021. Subprime borrowers are mostly not homeowners! The economy is cooling. (BLOOMBERG)
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The world seems obsessed with the 3,381 global billionaires, but there is another group just below this bunch – Centi-millionaires – yes, in the US alone there are 9,730 centi-millionaires, those who have at least US$100 million in investable assets, about 38% of the world’s total of 25,490. The top 10 holiday destinations for centi-millionaires included The Hamptons, N.Y.; Aspen and Vail, Colo., and Jackson Hole, Wyo.; Palm Beach and Miami Beach; Florida, the Algarve of Portugal, especially the Golden Triangle; the French Riviera; Lake Como of Italy; Ski towns in Switzerland; the Italian Riviera; African wildlife safaris, and Tuscany, Italy. Golf, art collecting, cycling, and mountain biking ranked as the top three pursuits of the world’s centi-millionaires, according to the report. Classic car collecting, which ranked 7th, is on the rise. Globally, classic car prices have risen 84% over the past decade (2012 to 2022) Grandparents are often a pathway to homeownership for younger generations. (Henley & Partners/New World Wealth)
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There has been a sharp decline in the savings rate—2.9% in the 4th quarter compared to 7.3% a year earlier—suggesting that consumers may be running up credit cards to make ends meet or take the vacation they couldn’t during the pandemic. But as savings decline, so too may consumer spending, the biggest driver of GDP. The AVERAGE savings of American consumers are relatively high, but like all averages this one too can be very deceptive: the vast majority of these saved dollars are in the hands of the top 5-10% of the wealthiest. The lower 90% have depleted their savings and are most at risk of job losses and defaults. If they stop spending, we should expect a recession. SecureSave, an emergency-savings account company, published a survey that finds that 67% of workers cannot afford to pay for an emergency $400 expense and that 74% of Americans are living paycheck to paycheck.
What Is Market CAP?
Many people don’t know what the term MARKET CAPITALIZATION means: Market CAP—or market capitalization—refers to the total value of all a company’s shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. For example, a company with 20 million shares selling at $50 a share would have a market cap of $1 billion. So, is Goldman Sachs whose shares trade for more than double that of APPLE’s a more valuable company? Goldman Sachs shares trade for about $354 per share.
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Goldman Sachs’s Market Capitalization – or Market CAP – is about $120 billion.
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APPLE shares trade for less than half that of Goldman Sachs – about $145 – yet APPLE’s Market CAP is $2,3 TRILLION, almost 20X the size of Goldman.
In the real estate world:
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The share price of REDFIN is about $7.20 per share, its market CAP is under $800 million.
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The share price of DOUGLAS ELLIMAN is about $4.64, its market CAP is about $377 million.
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The share price of ANYWHERE (Sotheby's, Corcoran, Coldwell Banker, Century 21, etc) is $8.48, it's market CAP is $928 million.
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The share price of COMPASS is about $3.92, its market CAP is about $1.73 billion.
Often when working in teams or partnerships, or collaborating on projects, we should look at the GLOBAL picture too: If you get 100% of $10,000 is that more valuable than getting 40% of $30,000?
So while many might assume from looking merely at the share price of Goldman Sachs that its ‘value’ is double that of APPLE, looking at the market CAP of these firms tells a very different story, the reality.
COMPASS Catch
3 Bed | 4.5 Bath | $9,495,000 | Annie Clougherty and Neda DeSigio
Boasting a waterfront location on Newport Island, 3904 Channel is the perfect culmination of design, function, and location. Completed in 2020, this home is built by premium builder Patterson Custom Homes, designed by highly sought-after Brandon Architects, with interior designs from Denise Morrison. The combined trio of talents has resulted in the most beautiful home with only the highest quality finishes that featured in the 2021 Newport Harbor Home Tour.
4 Bed | 5 Bath | $11,997,000 | Jaime Richichi
This captivating townhouse has recently undergone a two-and-half-year, multi-million-dollar gut renovation. The sun-lit residence has been beautifully restored and its recent monumental transformation brings open downtown loft living to a Manhattan townhouse located in the prestigious neighborhood of the Upper East Side two blocks from Central Park.
5 Bed | 5 Bath | 2 Half Bath | $10,995,000 | Chris Cortazzo and Brenda
Reminiscent of a seaside Italian villa, this spacious Point Dume estate is light-filled, welcoming, and perfectly designed for a lifestyle of luxurious relaxation and generous entertaining. Sitting behind gates on over 1.2 acres, the residence has huge windows, and multiple decks and patios for enjoying the views of the Santa Monica Mountains, the ocean, and the sparkling Queen’s Necklace. Exceptionally private, this enchanting home is a very special refuge.
4 Bed | 4.5 Bath | $3,750,000 | Alex Platt
Built-in 2017, this Coastal Contemporary custom home in the Palm Trail neighborhood is perfect. The spacious floor plan offers a tremendous great room leading to an open loggia and heated saline pool. An abundance of storage with an oversized laundry room, a pantry, and an outdoor storage room. All four bedrooms feature beautiful ensuite bathrooms. Endless upgrades include a full house generator, water filtration, and electric shades inside and on the patio. All within a short distance of the beach!
5 Bed | 5 Bath | 3 Half Bath | $1,975,000 | Gina Lorenzo
Beautiful home offering over 7,000 square feet in the luxurious Providence Downs South neighborhood in South Charlotte. The bright and airy kitchen features a ceiling-height marble backsplash, two large islands, gorgeous appliances, and full-size wine storage. Enjoy the backyard’s resort-style pool with an outdoor fireplace and a covered terrace.
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