This entry is brought to you by Ruth Kennedy Sudduth (rsudduth@landvest.com) who has been assisting and advising buyers and sellers of fine homes throughout New England and frequently, at her clients request, well beyond.

Recently my team conducted an informal survey of our clients to gain greater understanding of the mindset of clients who are looking to purchase properties, and clients who are looking to sell their real estate assets. The findings showed that there appears to be a clear generational split – caution among the older group, and skeptical opportunism among our younger clients.

Client Life Cycle
Broadly speaking, our client base tends to accumulate properties in their thirties through their sixties, and gradually deacession after that. Consequently, our sellers tend to be older than buyers.

High-End Real Estate Sellers
Our older client base has generally seen a relatively small decline in their real asset values outside of real estate. Yet the economic crisis has accelerated plans to simplify, reduce fixed costs and exposure to real estate.  The President of a major trust company recently mentioned to us  their older client base had become markedly more conservative despite modest declines in asset values and plenty of spending power.

High-End Real Estate Buyers
Our younger clients are cautious. Several noted cutting back on discretionary spending, but only on the margin, and quickly recovering. Others noted that their real estate plans hadn’t changed – including plans for additional vacation homes, or upgrades to primary residences. They further noted that the amenities they expect had not changed, though with perhaps a bit more of an eye to “green” or sustainable building.

It’s all about value. There is a view that like the stock market, peak real estate values were overinflated, and to feel safe making an investment they would like to see a discount to their perceived “fair” value, to protect against further economic disruption.
The challenge in putting deals together in this market is that it’s hard to do much with buyers wanting a discount to a new fair market value and sellers who don’t need to move wanting at least a fair price. We’ve found that the best strategy in this environment is to protect our sellers from over-exposure through careful, often private, marketing, and to coach buyers through the components of value so that they understand exactly what they are getting for their dollar – which is often tremendous value.

- Ruth Kennedy Sudduth, rsudduth@landvest.com