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Even in Silicon Valley, $5 million homes don’t always sell themselves.
That’s why a semi-private showing last month of a stately Victorian mansion in Palo Alto offered more than the requisite fresh paint, luxury staging and glossy brochures.
For the occasion, a real estate agent dressed in a Victorian hat, waistcoat, cravat and tails greeted potential buyers and neighborhood curiosity seekers. Michael Repka, CEO of DeLeon Realty, could have slipped into a Downton Abbey scene as an extra, but he was there to sell real estate.
“We do everything that’s a little bit different,” Repka said. “We’re a little more grand.”
Added guest Paul Newby: “DeLeon makes these social events.”
The art of selling a luxury home on the Peninsula — the listing price has to be at least $5 million to get in the door — is more than smart staging, filtered photographs and hand-printed invitations enclosed in linen envelopes.
Even as Bay Area home prices hit record highs — a home in Palo Alto is twice as expensive as one in Manhattan’s tony Upper East Side — the luxury market has softened in recent months. Sales of homes priced over $5 million have dropped 7 percent in the core Bay Area from last year, according to real estate data firm CoreLogic. In Santa Clara County, high-end home sales plummeted 24 percent.
Social gatherings and free food have long been a staple marketing tool for agents. But in a competitive market for reaching high-end buyers, an extra buzz can make a difference, agents say. Open houses in exclusive neighborhoods are often semi-private — neighbors and recent home shoppers receive postcards or more formal invitations to a soiree.
Inside the showing, guests are greeted with wine, cheese, canapès, live entertainment and a soft-sell from agents. It might not win a handshake deal in one night, but an agent’s Silicon Valley party can spark a word-of-mouth campaign, gossip and connections to future clients looking to someday sell their homes.
The swankiest parties end up in the most exclusive zip codes on the Peninsula, while East Bay agents say open houses there are generally more modest events.
Repka said reaching an exclusive market means catering to a buyer’s needs. He wants the next client to think, “I want that same magic for my home.”
Agents say buyers of high-end homes typically own a house and are looking to trade up — more bedrooms, better schools, a shorter commute and ample amenities. These buyers can wait for a property to tick every box, and some boxes they haven’t even put on their list.
Presentation and buzz are key, where events are part of marketing budgets that can reach $80,000 and include glossy magazines, television commercials and staging.
“We are marketing and storytelling,” said Kat Carroll, a broker at The Resolve Group in Palo Alto. “So much of what you’re getting is not just a house. It’s a community.”
Carroll and her partners faced a marketing challenge this spring — sell an empty, residential lot in Old Palo Alto full of weeds, a mature oak and a ring of redwoods. Workers spent a week clearing the Bryant Street lot, revealing an open footprint for a custom house.
One morning, Carroll set up a gourmet coffee cart on the sidewalk and hired a Spanish guitarist to serenade neighbors walking past the property. She wanted to stir imaginations and conversations and persuade skeptics that spending $6 million on a vacant lot could make sense.
“It created an environment where people stopped and started talking,” Carroll said.
Events can cost up to $10,000, she said, depending on the listing. Some were as simple as cold brew and cookies for a home-opening in Portola Valley, to a taco truck serving another open house at a Silicon Valley mansion. The latter event drew plenty of interest and a future customer, she said.
Jim Carter, a founding broker associate with Intero, threw a party at a new custom house in Los Altos in 2006, when the city had a glut of unoccupied luxury homes. To break through the sluggish market, Carter organized a bonanza with the full catered spread, wine and beer and about a dozen employees from his real estate firm.
About 600 people showed up — enough to drain cases of alcohol and find a buyer for the new $5 million home on a half-acre of prime real estate. “If you’re going to do these things, go big,” Carter said. “It can be a bummer, too. You do all this stuff and 10 people show up, that’s a bummer.”
For neighbors, it’s a chance to check out the latest designs and renovations.
“Housing is the one thing that bring us all together here,” said Lori Hobson, a Menlo Park homeowner.
A few years ago, Hobson toured several upscale homes with her daughter and son-in-law. They indulged in the cozy showings — mimosas, salmon, pastries — but always left disappointed by the steep mortgages that millennials like her daughter needed to call them home.
Still, she said the events are a rare chance for neighbors to get to know each other. Friends will often show up for a cup of coffee. “We don’t do barn raisings anymore,” Hobson said. “It’s sort of like the one way the neighborhood gets together.”
The three-story Victorian home on Forest Avenue in Palo Alto’s Crescent Park neighborhood had many attractive features, Repka said. Crescent Park, a short drive from downtown Palo Alto and the Stanford campus, is home to several notable tech entrepreneurs and executives, including Facebook founder Mark Zuckerberg.
A few dozen guests on a recent September evening circled through the four-bedroom, four-bathroom home, craning up at the 12-foot ceilings and peering out large windows onto the quarter-acre lot. A flamenco guitarist strummed a light melody in the sitting room.
Guests picked through the platters of hors d’oeuvres in the modern kitchen. A DeLeon associate served wine while wearing a floor-length, black velvet Victorian dress. Several other employees were ready to answer questions about design, neighborhood and schools.
Kris Newby and her husband, Paul, were not in the market for a new home — but walked down their block to check out the open house. The couple loves architecture and design, and often tour homes on the weekends, said Kris Newby. “We get inspiration,” she said. “It’s also the spirit of the new, new thing.”
Added her husband, an industrial designer and entrepreneur: “An open house is a sporting event for me.”
Ashwani Oberai, a director at Intel, brought his wife and daughter for the tour. The family recently moved to Palo Alto, and Oberai got an invitation from his agent at DeLeon.
Oberai was happy to sip wine, eat appetizers and satisfy his curiosity. He thought the price was on the high side, but recognized that “this is a prime neighborhood.”
The mansion did not sell that night. Repka expected the future buyer will be a tech executive, lured by the property, location and exclusive neighborhood — and maybe the buzz.
“We’re still being very aggressive,” Repka said. “There are a lot of different $7 million houses.”
