The #1 Feature That Both Millennials And Luxury Home Buyers Want!

As you can imagine, there are some differences between what millennials (born between 1981-1996) are looking for when buying a home versus what the luxury home buyer wants in a home.

For one, millennials are looking for less space, not more space. They prefer functionality of space over more space. For example, they would rather convert a yoga studio into a spare bedroom for overnight guests than have a dedicated spare bedroom.

Luxury home buyers desire larger driveways as they typically own numerous vehicles. Millennials, on the other hand, have a stronger walkability requirement along with access to public transportation or other ride sharing services.

But what’s that one feature or features that both millennials and the luxury home buyer desire in a home? It’s sustainability. According to one definition, sustainability means living within the resources of the planet without damaging the environment now or in the future. It’s about creating an economic system that provides for quality of life while renewing the environment and its resources.

For both groups, that means solar power. Solar powered homes and in the case of luxury home buyers, solar powered pools. There’s also a trend towards smaller pools too as opposed to pools that take up a large chunk of the backyard. California has gone so far as to require all newly constructed 1 to 3 story homes built beginning in 2020 to have solar power.

Additionally, it means more environmentally friendly homes such as homes that have been constructed with recycled building materials like reclaimed wood and finished using cleaner paints.

According to the EPA, “Nationwide, landscape irrigation is estimated to account for nearly one-third of all residential water use, totaling nearly 9 billion gallons per day.” Sustainability is all about conserving that precious resource.  Luxury home buyers are looking for eco-friendly landscaping like artificial turf to significantly reduce wasteful water use through landscape irrigation.

Homes that are National Green Building Standard Certified appeal to both millennials and luxury home buyers.

Many luxury home builders have been incorporating sustainability features into their homes for several years now. This trend will continue as millennials have progressively been buying into the luxury home market. In fact, Realtor Magazine states buyers under 35 years of age now account for one-quarter of all Toll Brothers Homes purchased. Toll Brothers is the largest luxury home builder in the United States.

Photo credit: Greens MPs on Visualhunt.com / CC BY-NC-ND

Is That House In Orange County Or Durham County?

It’s a question I expect to hear from buyers and their agents as they tour homes we’ve listed in subdivisions that are divided: some streets are in Durham County while other sections of the neighborhood are in Orange County. All too often, when the answer is Durham County, it becomes a deal breaker for a buyer. It’s practically a knee-jerk reaction: “we don’t want Durham County Schools, we want Orange County Schools”.

Durham Public School’s reputation has been dismal at best over the years. Even as Durham continues to add scores of new residents daily, these newcomers have habitually avoided Durham Schools in favor of charter schools or private schools. In fact, over the last eight years, charter schools have experienced a 110% increase in enrollment while public school enrollment had gone up just 3%. A full 30% of Durham County school-aged children don’t even attend Durham Public Schools.

However, with last month’s release of North Carolina’s school test scores, there’s a subtle, almost silent transformation taking place within the Durham Public School System. Compared to last year’s scores, the number of F-graded schools in Durham County has dropped from six to one and the number of B-graded schools have risen from eight to 11.

One school in particular, Lakewood Elementary, jumped two letter grades from an F to a C! Kudos to Principal James Hopkins, the teachers, and of course, the students. The big question is, “how did they do it?”. At the helm of this transformation is Durham Public Schools Superintendent Pascal Mubenga. This past January, he laid out a strategic 5-year plan that fosters a strong partnership between Durham schools, parents, teachers, and an unwavering commitment from the business community.

Every school will have an official community partner. In Lakewood’s case, they have three: Duke University, YMCA, and KBI Biopharma. Every day, Duke students volunteer as tutors at Lakewood.

On a similar note, the DPS Foundation was formed a year ago specifically to foster community support and investment in Durham Public Schools. About 25 businesses have helped fund school projects and there’s about $120,000 in grants planned for next year. Additionally, the Foundation provides an online forum for parents to request meetings with city officials to discuss enrolling in Durham Public Schools.

Is the plan working? Well, a couple of weeks into the school year, Durham Public Schools has an enrollment of 32,993. That’s an increase of 555 students over last year’s number. And according to Mubenga, it’s encouraging since he hadn’t seen numbers like this going back four to five years.

There’s a slew of dedicated individuals and businesses working hard to flip Durham Public School’s reputation on its backside. As realtors serving as the front line to new home buyers contributing to the rise of Durham’s popularity, we have the responsibility and duty to defend these efforts and change the knee-jerk reaction to the all too frequent question:
“Is That House In Orange County or Durham County?”. Everyone’s response going forward should be, “Yes! It’s Durham County! And have you seen what’s been going on with the rejuvenated Durham Public School System?”.

Durham Magazine: October / November 2019 Issue pg. 122

You’re Never Alone With A _______.

How many of you upon reading the title, filled in the blank with Schizophrenic? And the reason you did was to quote the music album of the same name by Ian Hunter, right? Nicely done music buffs! I would have done the same.

However, that would have been the wrong answer as it pertains to this post. The word(s) I was looking for were something along the lines of “voice digital assistant”. You’re never alone with a voice digital assistant like: Siri, Alexa, Google Assistant, Cortana, and Bixby.

Voice digital assistants are available on smartphones, tablets, computers, and on standalone speaker-like devices. Additionally, most major appliance manufacturers will be rolling out voice controlled smart appliances to the U.S. market within the next few months including: washing machines, clothes dryers, dishwashers, coffee makers, and refrigerators.

How do they work? Well, as we go about our daily activities, these voice digital assistants are listening in the background for their wake up phrase (Hey Siri, Ok Google, Alexa are just a few examples). The assistants are able to filter out background noise and upon hearing their wake up phrase and subsequent commands, the devices can send text messages, create calendar entries, dial calls, answer questions, relay weather information, set alarms, adjust thermostats, turn off lights, play music, change television stations, and even operate the above mentioned smart devices within the home. This is by no means an exhaustive list as new functionality is being developed daily.

Technically speaking, once the devices wake up, they begin recording audio clips of your voice. These audio clips are sent over an encrypted connection to a server that processes the audio files and formulate a response. Recordings are saved on the devices and users may access their account to delete them.

As you can imagine, this raises a whole set of privacy concerns. For example, I was showing a luxury home recently, and as I entered the front foyer of the home, there was an Amazon Alexa on a small wooden side table with a printout of possible commands. Why not play along, I thought. “Alexa, Start Tour”. Smooth jazz music began to play throughout the home and the family room eyeball lights dimmed. Based on the printout I asked Alexa to lower the inside temperature. Recording audio is illegal in North Carolina without the permission of a party to the conversation. Did I just inadvertently give the seller permission to record my dialog?

What if voice digital assistants were able to identify a dangerous pattern of words or had the abililty to recognize potential illegal activities that were about to occur? Should the assistants report these incidents to the authorities?

Technology has come a long way from when I was growing up. I can honestly remember not having a microwave as they weren’t available. As my children were growing up, I also remember explaining the rotary dial telephone and how we had to place the tip of a finger in a small round hole corresponding to each of the 10 numbers we wished to dial and with our finger turn the dial clockwise until it stopped.

Imagine a day when children won’t be able to fathom a time when people couldn’t verbally communicate with every device in the home. “Mom! The refrigerator is not listening to me!”.

Seeing Through Rose Colored Glasses!

That’s right! Rose colored glasses! Most sellers I meet with tend to look at their home through “rose colored glasses”. I’m sure you understand what I mean. For those that may not be familiar with the phrase, I’ll explain.

You see, sellers tend to look past their property’s deficiencies and instead view their property as deserving of top dollar once it hits the market.

When I say deficiencies, I’m talking about a property’s depreciation in value as opposed to appreciation in value. While it’s true that properties, at least in the Research Triangle Park area of North Carolina have appreciated significantly over the last 9 – 10 years (41%), many homeowners are finding that their home has appreciated much less overall. So, why is that?

First of all, these homeowners have allowed their homes to physically deteriorate over time. Realtors refer to this condition as deferred maintenance. In most cases, this is a curable condition. Realtors will often recommend to sellers to paint, or repair rotted exterior wood, or replace carpeting, or replace a roof. These repairs can result in an increase in appraised value for these homeowners and of course, a higher sales price.

While physical deterioration is readily apparent to homeowners as well as realtors, what’s not that obvious is functional obsolescence. Functional obsolescence pertains to older homes that may not have updated light fixtures or an older style kitchen that hasn’t been updated. Homeowners sometimes ask why updates are important at all. Well, for the simple reason that updates are more desirable for buyers. Then sellers will give the excuse that buyers may not like the updates they choose. Then it’s up to us to explain to sellers that we are looking to make their home as appealing as possible to the largest number of buyers we can. Luckily for the seller, these fixes are relatively simple so we call these curable.

What about the situation where the home has four bedrooms and 1 bathroom? That’s a form of functional obsolescence that we call incurable as the fix is more complicated and costly than the ones we just described.

The last type of depreciation we’ll talk about is external obsolescence. External obsolescence pertains to situations and conditions outside or beyond the homeowner’s property. For the most part, these conditions are incurable because the homeowner cannot fix the condition. Examples may include a nearby electrical tower, or the property borders an industrial park that produces undesirable, gut wrenching odors on a daily basis.

An experienced realtor can help homeowners understand why their home may not fetch the same price as other homes in their neighborhood because of these previously mentioned deficiencies.

Luxury Home Market Snapshot: Durham County 10/2019

First of all, where do we draw the line when talking about luxury homes in Durham County, NC? More specifically, where does it start? Currently, The Institute For Luxury Home Marketing defines the bottom-line luxury home threshold for the Raleigh / Durham Area at $539,000.

For our purposes though, let’s limit our discussion to Durham County, specifically. So, what I’ve done is take the top 10% of homes sold YTD in Durham County, sorted by sales price to come up with my own bottom-line luxury threshold of $500,000. Now, if one of you wishes to check my numbers, the true bottom line number is $450,000 but I just can’t see myself calling a $450K home “luxury” and for that reason, I’ve rounded up to $500,000. I’m sure some of you will even say that $500K is also NOT luxury and you’d have a decent argument there as well.

How many luxury buyers are we talking about? The following graph depicts the number of homes that have SOLD within certain price ranges YTD:

And how many luxury homes are currently available for sale in Durham County:

And lastly, how long do these luxury home typically stay on the market?

Durham County luxury homes tend to stay on the market for less than 100 days on average? That’s strong considering the average days on market for the entire MLS is 31 days.

If you have any questions regarding the data or if you’re interested in selling or buying a luxury home, give me a call. I’d welcome the opportunity to help out.