High End: If you’re selling, the wealthy are buying
The pandemic shut down much of the world and threw millions of people out of work. Even for those whose wealth didn’t suffer, the shutdowns and weeks of sobering news provided a pause.
Still, it’s been quite a run for those with means. In fact, the investment portfolios of the well-heeled posted massive gains last year. And according to everything from Women’s Wear Daily to the Financial Times, Bloomberg News and Financial Review, the resulting purchasing power was put to use on various high-end items. Travel, jewelry, cryptocurrency, even private concerts by the likes of Michael Bublé. They’re all available for those of means.
One trend that’s been impossible to avoid in northern Michigan is the real estate boom, with records posted across the board. The surge was driven by many factors, including the area’s appeal for retirees, increasing work opportunities (both in-person and virtual), and by the pandemic itself: many in large metropolitan areas wanted to escape to places where they have more room, and the ability to work and go to school from home made it possible.
Sales of high-end properties were a particular beneficiary of the purchasing power of the wealthy: In Grand Traverse County, sales of properties at $1 million or more were up 50 percent over 2019; in the five-county area, they were up 70 percent, according to figures cited by Matt Geib, realtor with Century 21 Northland.
Geib said even those properties at the very high end of the market are still less expensive relative to other areas of the country, so buyers come here from across the country in seek of beauty — at a lower cost.
“There are more from out of state: Washington, California, Texas, New York,” Geib said. “Buyers’ perception of value is driven by where they come from.”
Sales of products to appreciate inside those homes are also strong. Shanny Brooke, owner of Higher Art Gallery, said one trend she noticed was people moving to the area immediately wanted to purchase and display artworks.
“A lot of people are coming in who just moved here. They’re looking for art for their new home and haven’t even unpacked yet.”
Last year was also a record-breaking one for the boating industry. Sales took off and manufacturers couldn’t keep up with demand.
“The higher-end, 45 feet and up, were our best sellers in 2020,” he said.
They start at $500,000 and go up to $1.8 million for the 64-footers. For its efforts, the company was named the North American Dealer of the Year by Jenneau, besting 21 others across the country. It also sold more Gemini catamarans than any dealer in the country.
The company was started 35 years ago by Bill Allgaier, who sold it in 2000 and then opened HarborView Yacht Sales. Both companies are located in the Centerpointe Building on West Grand Traverse Bay. Allgaier said the larger yachts he sells cost $900,000 for a 42-foot yacht to $2.5 million for those 55 feet in length. Have those been popular as well? Apparently so.
“Anything that’s produced is being sold. The problem is not being able to get enough,” said Allgaier.
For those who are looking to travel, there are options. Ralph Kauffman, general manager at Cherry Capital RV, said business has been up considerably since last May.
“There’s more activity across the board, entry level to high end,” he said.
He pointed to two lines in particular which have been very popular at Cherry Capital RV.
“Airstream and Lance are two of the high-end products,” Kauffman said. “The segment that has money they want to spend couldn’t cruise if they wanted to, hotels and airlines (are suspect), so RVs are perfect.”
John Schmitt, president of Grand Traverse Travel and its affiliated companies, said people who have been cloistered in their homes are itching to get out. That’s been true throughout the pandemic, and the result for the company has been its best year ever.
The company specializes in luxury travel experiences, which he said has meant such things as trips to Europe and European river cruises. When that’s been impossible, Schmitt said one alternative has been family getaways, what they call villa vacations, where everyone gathers at one place.
“Families haven’t been able to get together as much as they wanted, so maybe grandparents will take the whole family,” he said.
What used to be an all-inclusive resort is a now a fully-provisioned luxury home, “anywhere from four to 15 bedrooms.”
He said the patience of those who are used to traveling a lot is wearing thin.
“What’s more challenging now is the can keeps getting kicked down the road. At this time we’d be typically planning a lot of Caribbean vacations, summer trips to Europe, river cruises. The whole world is sitting and waiting.”
So two trends emerged: people planning trips for when they are relatively sure restrictions will be lifted and/or most people will be vaccinated — or simply changing their plans to go somewhere, anywhere, now.
“We’ve had many requests, ‘We want to go somewhere warm and we want to go now.’ If not the Caribbean, then Tampa. They’re just changing their course,” Schmitt said.
And what’s a high-end life without a little bling? Jeff Guntzviller, general manager at Miners North, said his store’s business includes jewelry at all price points.
“You can’t survive on just higher end sales,” he said. “But with that being said, since reopening we’ve been so busy. A major factor was luxury sales. Higher-ticket items … compete directly with travel dollars. I think that (the inability to book higher-end vacations) had something to do with it.
“Summer was crazy,” he added. “We have more luxury sales in summer when people are on vacation.”