I recently read a good post over at Seth Godin's blog that talks about the difference between luxury and premium. It got me thinking about the difference between the two in the Atlanta real estate market. In selling your house, which are you conveying to home buyers? That your home is a luxury home or that it is a premium home?
A Google search of both "Atlanta premium homes" and "Atlanta luxury homes" reveals that many Atlanta real estate agents, builders, and brokers still overwhelmingly market luxury homes. There are agents who are luxury home specialists, home builders who only build luxury homes, and brokers who simply won't list your house unless it's an Atlanta luxury home.
It's not surprising to me, but I'm not sure touting luxury is the appropriate route anymore. Maybe the best way to set yourself apart from the crowd is to show value and market it as a premium home.
Luxury is a tough sell in today's real estate market and the current economy. Of course, at some level, people still want to be indulged, but attitudes have changed significantly; dollars are being spent more cautiously and value is more important than ever. Five years ago, showing off that you had money to burn to afford a luxury home was a status symbol. Now people are recognizing the benefits of savings and making sound investment choices rather than purchasing homes of excess purely for the sake of excess. Even those virtually unaffected by the downturn who want to be indulged feel pressure to be seen as responsible and may be hesitant to purchase a home marketed as a luxury home.
Premium homes? Now that's another story. The dictionary defines premium as "having exceptional quality or greater value than others of its kind." If you're looking to buy a home right now, wouldn't you be looking for something with "exceptional quality" and "greater value than others"? I know I would. For this reason alone, home sellers, builders, agents, and brokers alike could all benefit from shifting the focus from luxury to premium. More buyers will be interested in a home that is the best value (premium) than one that is the most indulgent (luxury). Potentially even more importantly, it is much easier for them to rationalize a purchase of a premium home versus a luxury home, even if there isn't any difference between the two except how they are labeled. Marketing defines perception, so in simply marketing a home as premium versus luxury, a home will come to be perceived as more of a premium home than a luxury one.
With the prevalence of "luxury" throughout Atlanta real estate, there isn't much confusion about what builders, agents, and brokers believe their brands represent in the luxury vs. premium debate. Are they missing the point? In my estimation they are. Premium homes are simply much more attractive in today's Atlanta real estate market.
Where do you stand on the premium vs. luxury debate?