Goodbye granite countertops, marble fireplace mantles and ornate woodwork and hello mid-century modern décor straight out of Don Draper’s Manhattan crash pad.
Tastes are changing fast in the multimillion-dollar luxury home market in Boston’s suburbs. So fast, in fact, that some homeowners are faced with potentially losing money after spending millions to buy homes that just a few years ago were the height of fashion.
That’s the word from one of top brokers and market trackers in the city’s western suburbs, Elaine Bannigan, broker/owner of Pinnacle Residential Properties in Wellesley. And true to form, Bannigan, one of the brainiest brokers around, has the hard stats to back up the trends she is seeing as she goes about the business of marketing very expensive homes.
“It’s a cold reckoning for people who paid a lot of money for beautiful homes,” Bannigan said. “Buyers today, they are looking for contemporary, sleek, modern clean lines. They don’t want all of the fancy carvings. They are looking for contemporary.”
Bannigan has pored over the stats, looking back over the past decade at repeat sales of luxury homes in Brookline, Newton, Wellesley, Weston and to some extent Concord. Unless homes had been “thoroughly updated with up-to-the minute amenities, floorplan and décor,” there was generally a 10 percent drop in price from the first sale to the second, she noted.
That trend has only intensified over the past year, if the latest numbers out of Wellesley’s luxury home market are any indication.
Sale prices for homes in Wellesley in the $2 million to $3 million range that were built at least five years ago or longer actually fell 10 percent in 2017 compared to the year before. By contrast, brand new homes fetched a 10 percent premium.
The only exception was for homes that “had been fully renovated AND had updated décor as well as contemporary amenities and floorplans” – these, according to Bannigan, held their value.
One particularly telling case is a Wellesley home that sold last year for $3.05 million – a seemingly handsome price until you consider that it fetched $500,000 more after it was first built in 2004. The difference was that it had not been updated, Bannigan said.
Sure, it may be one of the hottest real estate markets in years. But just because you spent millions on a new home a decade ago – or even just five or six years ago – doesn’t mean you will walk away with a big gain, or break even, if your home is out of synch with the new penchant for clean lines and interiors that harken back to the middle of the last century.
In fact, as the case of the Wellesley home that lost half a million in value from the time it was built in 2004 shows, you can even lose money if you find out what you thought was your relatively “new” home isn’t considered so new by the generation of up-and-coming Millennial and Gen X buyers, Bannigan said.
Scott Van Voorhis
Ditch ‘All That Brown Stuff’
Maybe the easiest way to explain what luxury buyers want when hunting for a new, multimillion-dollar address is to point out what they don’t want.
In their 30s and 40s, these new buyers don’t want fancy crown molding and millwork, granite countertops and traditional marble-mantled fireplaces. Also on the ditch list are heavy draperies and wallpaper, which, even if it is making a modest comeback, most buyers will want to pick their own.
“If they walk into a house built in 2007 with all that fancy kitchen work, lavish marble, granite countertops, they look at that and say, ‘We really have to gut that kitchen,’” Bannigan said.
The same goes for natural wood floors of oak or maple, with the preference now for a darker, medium-brown shade or stain.
And if you have heavy old furniture kicking around, forget it – today’s buyers aren’t interested in all that “brown stuff,” Bannigan said.
Noticeable grout lines in the bathroom are also a no-go – another tip off that your house was not recently renovated. Jacuzzis are out, stand-alone tubs are in.
Still, not everything has changed, with some basic layouts that were popular with luxury buyers a decade ago still in demand now.
For $3 million, buyers are going to want a home they can really settle into, say 6,000 square feet or more, five bedrooms and at least four full bathrooms, according to Bannigan.
They are going to want a large room – the term “great room” is out of fashion now – next to the kitchen and a fully equipped mudroom. A three-car garage is an absolute must as well.
All of this seems very strange in a market where, for the most part, buyers have been at the mercy of sellers for years thanks to a long and chronic shortage of homes for sale, new or otherwise.
Yet while values are soaring for homes under $1 million, which are in desperately short supply, it’s a different ballgame when you get into the $2 million or $3 million and up range, Bannigan said.
Buyers who can afford to spend literally millions on a home can afford to be picky and they are, with shifting tastes meaning homes that were fashionable a decade ago or even five or six years ago may now seem dated.
So homeowners who spent millions for granite- and marble-clad everything just a few years ago face some difficult choices. They can fork over some significant cash to pay for renovations and updates in order to make their homes looking more “contemporary,” or they can sit tight and hope the gods of home décor will someday smile again on the fashions of the early aughts.
Anything can happen. But given it took a half century for the styles of the ’50s and ’60s, now known as mid-century modern, to make a comeback, it could be a long wait. As in 2078.
Scott Van Voorhis is Banker & Tradesman’s columnist; opinions expressed are his own. He may be reached at sbvanvoorhis@hotmail.com.
