Lifestyle Marketing in Action

When buying a home, we look at much more than the house itself. Walk the land it sits upon, try a few local coffee shops and restaurants, maybe take a lap on one of the trails around the nearby lake. There is a whole experience that comes with purchasing a home. In the end, we are buying a LIFESTYLE rather than a piece of real estate.

An important piece of that lifestyle is the community you are joining. The way folks live in a downtown Minneapolis luxury condo is very different than someone seeking a hobby farm 20 minutes to the nearest grocery store. And each of these lifestyles has a “value” based on current market preferences. For years, living downtown came at a premium. Then, when COVID hit, those property values suddenly wavered and third-ring suburban properties with privacy became all the rage. When operating in an ever-changing market, how do we account for lifestyle?

Laying the Groundwork

It is important at this point to understand the nuance of different markets and how we view them. A “Market”, as defined by us, is a grouping of similar properties used to help define value for our clients. This can be driven by geography, amenities, style, and price. For example, not all lakefront is created equal, even on the same lake. Other factors may include a sandy beach or how much frontage is available. Is a private dock included or do you need to use a communal space? Can you catch the sunrise or sunset from across the lake while enjoying your morning coffee or evening cocktail? To provide this level of service, a deep understanding of the local community is critical.

On to the matter at hand. Some lifestyle features are easier to track, like school district. Real or perceived, if a school is seen as providing better opportunities for your children, the homes will undoubtedly be more valuable there. Take the graph below as an example: four school districts on the west side of the cities, narrowed down to between 2000-2500sq.ft. (to take out the enormous mansions and even the playing field) and 3+ bedrooms, single family detached residences only. Why is there such a significant disparity between Osseo School District and Minnetonka/Wayata? According to Niche.com, Minnetonka is ranked #2 and Wayzata is ranked #1 in the state. Osseo Schools, by contrast, are ranked #12.

Differentiating Lifestyles in the Same Market

Other times, the process is a bit more complex. Let’s take Lake Minnetonka as an example. As of the time of writing, the median price for a Lake Minnetonka single-family lakefront home is $1.85 million. However, within that figure lies a complex web of interwoven communities, each with their own cultures, communities, and amenities. With over 20 separate bays and 12 separate towns, values vary wildly between locations. Additionally, there are other considerations. Are you right on the water or have channel access? Of course, the size and style of home you desire matter as well.

Now, here is where market expertise shines. Looking for a private portion of the lake, with wooded views and pristine riding conditions? Look to Forest Lake, in the northwest portion of Lake Minnetonka. Accessible by a single channel from the main lake, this remote portion of water is favored for its “up-north” feel. The average sale price here mirrors the values of the overall lake.

Let’s say your desire leans more towards historic charm, safe swimming areas, and closer access to the airport; naturally, the east side of the lake is appealing. Specifically, Carson’s Bay and Saint Louis Bay stand out, with public beaches and wake restrictions in place for the entirety of these two bays. The most recent sales indicate an average sale value of nearly $4.5 million.

While there are some disparities between the properties, the important factor is that the homes on the quiet bays of Deephaven with historical charm and architecturally-significant exteriors come with a larger premium than the wooded feel of Forest Lake.

Price Banding Helps Assign Value to Lifestyle

Let’s take the example one step further. We know one portion of the lake is more expensive than the other, but how do we find a great deal in the portion that fits your lifestyle? By understanding what each submarket’s typical prices are, we can dig deep and find true value with a technique called price banding.

Essentially, Price Banding is a method of determining value in an area relative to available competition broken into their respective price points. By tracking the homes currently on the market, any pending deals, and the prices they are selling for, we can track demand effectively against available supply. In this example, there are 13 homes available in total across all price points, with most centered between $3 million and $9 million. However, when we look at homes sold in the past six months, we see a whopping 19 of 26 sold between $1 million and $5 million. What does this tell us?

If you are searching for a home, you can get value on homes above this threshold as there is less demand. Simultaneously, if you are selling a home in this market, pricing under $5 million assures significantly greater demand, resulting in quicker sales closer to your asking price.

Understanding Lifestyle as a Marketing Tool

Working backwards, we can now find what aspects of homes are helping them sell more quickly and for top dollar. If we find that the median Days on Market is 21, and certain homes are selling much faster, we can delve into the features that stand out. Was it the location on a point, a walkout basement, or a sandy shoreline? Those details are what sell homes, and how a true professional will advise their clients on pricing.

Interested in learning more about a specific market? Please reach out and we will happily arrange a meeting. We set our clients up for success before their home ever goes up for sale.