In talking to various agents in the luxury market, we are hearing that some of the higher priced properties, above $3million, are not moving quickly. However, Wall Street Journal reported that Hugh Hefner’s $200 million Playboy mansion is in escrow.  As an aside, Hugh Hefner gets to live there until his death.

We checked our sources in the luxury goods industry and discovered that there has been a slowdown in expensive retail items as well. Louis Vuitton, a conglomerate of luxury companies, reported that consumers are no longer as eager to buy the larger luxury goods such as handbags.  However they are spending on personal care items, such as skincare, hair products, makeup and perfume. The beauty sector sale numbers noticeably increased.

This is not a new phenomenon. Chairman of Estée Lauder Companies, Leonard Lauder, coined the term “Lipstick Index”, in 2001.  His mother, Estée Lauder, had noticed that lipsticks were her best sellers when she was selling her beauty products door-to-door during the Great Depression.

During a sluggish economy, for those who specialize in ultra-luxury real estate marketing, it may be wise to diversify your listing activity as a hedge for your own cash flow purposes. Think, Lipstick Index vs. The Playboy Mansion.