Is over-the-top luxury marketing coming back in style?
The sales figures and marketing content coming out over the past several months certainly suggest as much. A recent Douglas Elliman report found that sales of Manhattan apartments are up 150 percent, topping $1.9 billion and rising 12 percent in average prices. Luxury sales are also up 61 percent in Portland, Oregon, 60 percent in West Palm Beach, Florida, and 42 percent nationwide.
At the beginning of the pandemic, the picture was very different. With the virus closing down everything from schools to small businesses across the United States, people of all income brackets were facing an uncertain financial future. The type of over-the-top marketing where agents filmed celeb-studded music videos featuring a home or staged listing photos with champagne and sports cars felt particularly out-of-touch, propelling some agents to take a more reserved tone when trying to reach ultra-affluent buyers.
While inequality is still a problem, home values are rising at a rapid clip and luxury agents are recalibrating their marketing strategies to reach those who gained money over the past year.
“The bigger, better lifestyle is what many people want right now,” Diane Hartley, president of the Institute for Luxury Home Marketing, told Inman. “Let’s clear the deck in that they’ve always wanted that but the very strange times that we’re in have now afforded that to [certain people]. When you look at the savings rate, we’re close to where we were post-World War II and that means that many people have money and are looking to spend it.”
Hartley said that, with the average homeowner gaining over $30,000 in equity last year (for owners of high-end homes that number is much, much higher) and the number of homes worth more than $500,000 increasing from 16 to 27 percent, many homeowners have become significantly wealthier over the past year. As a result, the Institute has been teaching agents to promote aspects of the home that homeowners want but might have been on the fence about due to money — a room just for the Peloton bike, a space full of slides and climbing structures for the kids.
“People had that initial ‘I want, I want, I want,’ and then they got very clear on what they wanted,” Hartley said. “It’s now about specific rooms for specific things. Instead of having the Peloton as part of the family room, they want the Peloton to be a separate exercise room that might also have a golf swing simulator that’s $100,000. There seems to be no end in sight from the amenities standpoint.”
Compass executive Aaron Kirman told Inman that luxury marketing is not necessarily about superficial displays of wealth like the Moët bottle in a listing photo that was frequently observed in the years leading up to the pandemic — especially for international buyers unable to travel, that increasingly looks like an agent doing the heavy work of making it easy for a potential buyer to see every aspect of the home remotely.
“I used to be a proponent of ‘less is more’ when it came to marketing but I don’t do as much of that anymore,” Kirman said. “I used to give just enough [information, photos] to get people’s attention and want to see the home but now I’m doing everything from lifestyle videos to floor plans and maps. More is more, especially when people are not local.”
Kirman said that, more and more frequently, he’s been asked to do on-the-fly marketing — a potential client from Dubai asking him to FaceTime him from a home in Beverly Hills or a client asking for a quick virtual tour of the neighborhood. At Compass, they’ve been transitioning from attracting attention to a specific house and towards a service-based marketing in which the agent works with the luxury buyer to try to fit even the most outrageous desires.
“The old image of just taking some pictures or videos and [having that be] enough is over,” Kirman said. “People are looking for a lifestyle and they’re choosing destinations based on that lifestyle. That is why we’re doing a lot of lifestyle-based marketing.”
Hartley said that, with housing prices going up as fast as they are, many agents are now finding themselves working in luxury without intending to be a “luxury agent” when, in cities like San Jose, the average price of a home is now $1.25 million. While that creates incredible challenges for those who do not own a home and do not have savings or family help to break into the market, agents in many markets need to learn to work with more affluent clients — a trend that, Hartley said, is only going to continue.
“Every agent that I’ve ever talked to in my life has at one point said ‘I don’t know that I want to go there’ because there just isn’t the turnaround,” Hartley said. “That’s not the case anymore.”