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Redfin Economist Loves Bustling Cities and Sees Promise in the ‘Second-Tier’

Follow Apple and Google’s lead on investments, says Nela Richardson

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Redfin's chief economist Nela Richardson spoke to Mansion Global about luxury property markets in area's such as New York City, Miami and Arizona.

Nela Richardson; ONE SOTHEBY'S INTERNATIONAL REALTY; ONE MANHATTAN SQUARE; LUXADDRESS
Redfin's chief economist Nela Richardson spoke to Mansion Global about luxury property markets in area's such as New York City, Miami and Arizona.
Nela Richardson; ONE SOTHEBY'S INTERNATIONAL REALTY; ONE MANHATTAN SQUARE; LUXADDRESS

Nela Richardson is an economist who leads Redfin’s housing market research team. She joined the U.S. real estate brokerage from Bloomberg LP, where she served as senior economist with Bloomberg Government.

Ms. Richardson, who lives in a suburb of Washington, D.C., has also had roles within the mortgage industry, capital markets and financial policy.

We caught up with her to talk the next big hubs for luxury real estate, her love of technology and why homes are like buses (her words exactly).

Mansion Global: Describe your dream property.

Nela Richardson: First, I would start by describing my dream neighborhood. A place that’s near coffee and doughnuts, and is lively. A vibrant environment helps me think better. But I’d also need a place where you could drop my family of four and have enough room and also be cozy enough to spend time together.

MG: Do you have a real estate property that got away?

NR: There was a time a few years ago, when my husband and I saw a place online (seeing a home online was the big innovation then). It was a dream home. It was out in the middle of nowhere in Maryland. It was brand spanking new, it was huge, and it had things like a theater in it. There were are a lot offers, and it went over ask. But looking back, I’m glad we missed out on it. We bid on it sight unseen… and it was a new build in a neighborhood we were familiar with. We did it before that was cool. (Now, here at Redfin,we know one in five offers are made sight unseen… my best advice [for that] is to proceed with eyes wide open of potential risks.)

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MG: What does luxury mean to you?

NR: For me, it would be a lot of square footage, and really high-end finishes. A location is part of that—either a really exclusive location or something that’s very well situated in an urban center, with lots of high-end shopping and other luxurious amenities.

MG: What area do you think is the next hub for luxury properties?

NR: It’s going to be second-tier cities. There’s an untapped luxury ambiance in the middle of the country —especially for foreign buyers —in places like Texas and Arizona. People who want square footage and opulence in terms of size can see that.


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MG: What’s the biggest surprise in the luxury real estate market now?

NR: One of the things is the pick-up in inventory. We’re seeing both sales and inventory pick up at the end of year, which is so out of step with the rest of the market. Ironically, there might be deals to be had in luxury. [Editor’s Note: This interview took place December 2016.]

More:Click to Read Finding Luxury Value in a ‘Second-Tier City With a Story’

MG: Where are the best luxury homes in the world and why?

NR: Miami because of the beaches and New York because of the culture there. But any big city is luxurious for me.

MG: What’s your favorite part of your home?

NR: There’s this little reading nook in the corner and there’s a big window to the outdoors. It’s a very cozy place.

What best describes the theme to your home and why?

NR: Colorful. We have a lot of color in our house—whether it’s artwork or rugs or throws, it’s a colorful place.

MG: What’s the most valuable thing in your home?

NR: We really invest in electronics. My husband doesn’t buy me diamonds, he buys me Apple products. We have probably more iPads than people, Apple TV and lots of computers.

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MG: Best piece of real estate advice?

NR: Never regret missing out on an opportunity. Homes are like buses, another one always comes along. You don’t want to force yourself to love one that you don’t love.

I also think a good view—whether it’s a cityscape or a beach or a mountain—is an amazing thing.

MG: What’s going on in the news that will have the biggest impact on the luxury real estate market?

NR: For the luxury market, stock markets make all the difference. The stock market has rallied against new short-term interest rate increases. As the stock market rallies, people will feel more comfortable buying in the luxury market.

MG: What is the best area now for investing in luxury properties?

NR: Places like Austin or Denver. Even Omaha. A lot of tech companies are moving to Reno, Nevada. I would look where Apple and Google are opening offices.

The south is another place that’s promising. And the last places I would look are at income-tax free states like Florida and Washington state.

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MG: If you had a choice of living in a new development or a prime resale property, which would you choose and why?

NR: Resale, every time. I don’t think of a home, in general, as an investment and I don’t think you should go into a home with a plan to buy it and flip it. But we live in an economy that is ever-changing. Homes aren’t necessarily going to be yours for the next seven to 10 years, so you need to look at places where you’re not trapped. Knowing a house has a good resale history is a good thing to know.

MG: What area currently has the best resale value?

NR: Again, I’d have to turn to urban locations where there’s a lot of turnover. Also, we know there’s a lot of correlation between schools and property values. Also, walkability. Places with walkability tend to hold their value over many years.

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