What Mega-Rich Homebuyers Get for their Money (in Hong Kong, less space)

The wealthiest billionaires in China, the US, the Middle East and elsewhere are splashing out on one-of-a-kind homes, with US$100 million the new base price for developers catering to this tiny global elite.

PUBLISHED : Tuesday, 14 February, 2017, 12:32pm

When the world’s ultra-rich go shopping for new homes these days, they’re no longer looking for the traditional “palaces”. While decades ago, the ultimate in luxury might have been studies in ornate excess – Trump-esque golden toilets, an aesthetic straight from Versailles – today’s buyer is more likely to go bespoke.

“Very often these properties are expected to be … ultra customised and one-of-a-kind, complete with furnishings, art and vehicles,” says Marc Carver, principal of the Carver Property Group, a luxury real estate company with offices in New York and Atlanta. “As the number of global high-net-worth individuals continues to grow, so will their appetite for more and more exclusive products, particularly real estate.”

That means properties such as the US$125 million Rancho San Carlos in Montecito, Santa Barbara County, Calfornia – one for those with a refined sensibility: there is a linen and sewing room, a children’s wing and, of course, a Scotch whisky pub. Or the La Dune estate in the Hamptons, priced at US$100 million, with sunken all-weather tennis courts and 122-metre stretch of beachfront. Or a sprawling 38,000 sq ft spread in Bel Air, California, with 150 art installations, 12 luxury cars in the garage, a cinema with seats layered with Hermes throws and pillows – and a price tag of US$250 million; it’s a home that the man who developed it, former Hong Kong handbag magnate Bruce Makowsky, says only about 3,000 people in the world could afford.

That, no doubt, includes Shenzhen real estate tycoon Chen Hongtian, who last year reportedly paid about HK$2.1 billion (US$270 million) for a home on The Peak, setting a new record for Hong Kong.

The entrance to the most expensive house in the US, listed at US$250 million, in Bel Air, California. Photo: Berlyn Photography

These 3,000 people are the same ones being courted for other uber-pricey properties, such as The Manor in Holmby Hills, in Los Angeles, on the market for US$200 million, and the US$195 million Gemini house in Manalapan, Florida. A few years ago, the idea of a US$100 million single family house in the US was incomprehensible. Today, it’s the starting point for a thriving category of homes specifically for billionaires.

“The sky is the limit,” says Rick Hilton, chairman of Beverly Hills luxury residential brokerage firm Hilton & Hyland. “Once we hit the US$100 million mark, we broke the glass ceiling – and we’re seeing people comfortable with spending more than that.”

Hilton and other operators in that super-prestige realm are buoyed by the growing ranks of the billionaire set; according to Forbes, 2016 welcomed in another 198 people worth in excess of US$1 billion. These are the people, Makowsky said recently, “who spend US$200 million on a boat and US$100 million on a plane, and yet they’re still living in US$40 million homes. Why wouldn’t your house be as valuable as your plane?”

The former Playboy mansion in Los Angeles recently sold for US$100 million. Photo: Hilton & Hyland

Makowsky and other developers are seeking to redress that imbalance with a new crop of homes that indulge every conceivable fantasy and aesthetic. The Manor has its own nightclub and spa; Hugh Hefner’s Playboy Mansion, recently sold for US$100 million, includes a swimming grotto and a room with a built-in pipe organ; a US$100 million house in Holmby Hills comes with a bar/lounge and hiking trails. And there’s the aforementioned Rancho San Carlos and the Hamptons estate.

Even though there are 3,000 people in the world who could buy [one of these homes], there’s a much smaller list who would buy one.

Gary Gold

Makowsky has made his US$250 million home not just move-in ready, but set up so a buyer can arrive and throw a house-warming bash on the same night: a staff of seven comes with the house for two years from the move-in date, the wine cellar is stocked with 2,500 bottles, and there are three kitchens – one of which has a revamped vintage meat grinder worth six figures.

The bowling alley is equipped with enough shoes for your entire party, and guests can treat themselves to a massage overlooking the pool, browse artworks (such as a US$1 million piece from Chinese sculptor Liao Yibai) or borrow one of the US$30 million worth of cars and motorcycles that are house accessories and bear marques including Bugatti and Lamborghini.

The 38,000 sq ft Bel-Air property includes a classic car collection. Photo: Bruce Makowsky/BAM Luxury Development

Makowsky says he didn’t initially set out to build the most expensive house in America. A few years ago he sold a home he’d built for US$70 million to Markus Persson, who was flush with cash from the sale of his company (which makes the Minecraft game) to Microsoft for US$2.5 billion.

At the time, US$70 million was the most ever paid for a home in Beverly Hills. In the past two years, prices for “trophy” homes in places such as Los Angeles, Miami and the Hamptons have slid up past the US$100 million mark, landing at the historic quarter of a billion dollars that Makowsky is seeking for the Bel Air property, which he built on spec to await a buyer.

Brokers working in the highest echelons of the market are aware of the inherent challenges of selling those properties: even if someone has a couple of hundred million dollars lying around to invest in a new pad, they may not want to. Warren Buffett, worth a reported US$74 billion, has famously lived in the same house since 1958.

The view from beside the swimming pool at the house Makowsky is selling for US$250 million. Photo: Bruce Makowsky/BAM Luxury Development

“Even though there are 3,000 people in the world who could buy [one of these homes], there’s a much smaller list who would buy one,” says Gary Gold, the Beverly Hills realtor who sold the Playboy Mansion last August. The house first went on the market in early 2016 for US$200 million, but sold eight months later for half that price. The global publicity the listing received was helpful, but ultimately, Gold says, he needed to reach out to only a “handful of likely candidates”.

“This was a very specific targeted effort, tweaking the messaging to people so they would understand what we were selling,” he says. The estate was ultimately sold to the head of a private-equity company who happened to already live in the neighbourhood.

Given the pretty finite number of potential buyers, houses in this price range are rarely snapped up in an instant, says Makowsky, adding that developers and sellers have to be patient and that negotiation is part of the deal.

Rancho San Carlos in Montecito, California has its own pub. Photo: Sotheby’s International Realty

Hilton says the Los Angeles market remains undervalued when compared with cities such as London, New York and Shanghai; ultimately, he says, on a per-square-foot basis, there is more value for money in US west coast properties than in other places. He says he’s seeing traction from the Middle East and China, and that the people looking at these US$100 million-plus properties tend to skew younger – typically in their 30s – and want to spend some of their newly acquired wealth.

Makowsky agrees, saying that on a per-square-foot basis, Los Angeles offers far greater value for money than other parts of the world.

“In Hong Kong, this house would cost considerably more than this,” he says. (Indeed, the HK$2.1 billion house on The Peak is just over 9,000 sq ft, less than a quarter of the size of Makowsky’s Bel Air home.)

Still, as far as straightforward investments go, there are probably smarter places to park your money, says Paul Habibi, a professor at the UCLA Ziman Centre for Real Estate. “At that end of the spectrum, when you’re dealing with the uber-wealthy, I don’t know if they’re making decisions with their best economic interests in mind,” he says. “There is such a thing as overconsumption, which this falls into.”

Habibi also says the typical buyers for these homes are new-money rather than old, and fall into two categories: those seeking a repository for funds, and others for whom such a purchase is a “look-at-me” move.

“There are people who have never had this kind of money before, and who are looking to experience it fully for the first time, whether it’s ridiculous or not. When you’re paying a few million just in property taxes every year on a single home, that is not a smart investment,” he says.

Gold says even at that level, pricing is everything. “Sellers are under the impression that whoever the hot buyers are at the moment – the Russians, Middle Easterners, Chinese – are just going to throw their money around and not care about it,” he says. “But nothing could be further from the truth. These are the places in the world where negotiating is a sport. If you price a home too high, you’re not going to get offers.”

http://www.scmp.com/lifestyle/article/2070363/what-mega-rich-homebuyers-get-their-money-hong-kong-less-space

Luxury Add-Ons of Cars, Yachts or Helicopters Don’t Always Make the Sale

Russians turn attention to South Florida real estate, Canadian foreign buyers’ tax gets a caveat, and more news from around the world

BY ANNE MACHALINSKI ORIGINALLY PUBLISHED ON FEBRUARY 03, 2017 | MANSION GLOBAL |

 

The buyer of this 12,385-square-foot mansion will receive a Rolls-Royce Silver Seraph.

DOUGLAS ELLIMAN REAL ESTATE

Buy a condo, get a sports car.

While this sort of two-for-one arrangement has become common in markets where there are a lot of luxury property listings, add-ons like this aren’t always what makes the sale—and in some cases, can actually harm a negotiation, experts say.

In some cases, luxury extras— like six-figure classic cars, yachts, helicopters and fine art—can add value, especially when they’re relevant to the lifestyle of the would-be buyer. Other times, they don’t impact the end deal, but are a way to attract attention and get media coverage. And then there are the cases in which including luxury extras with a listing are seen as a sign of desperation, and a cue for brokers to negotiate hard on price.   

MORE: Click to View a Chelsea Townhouse Comes with a Bentley for the Buyer

“When it comes to these houses that come with a boat or a Porsche, in general, it’s a gimmick,” said Gary Gold, executive vice president of Los Angeles agency Hilton & Hyland. “But if we’re talking about a $25 million house on Kauai that’s fully furnished and comes with cars, or a property on a golf course that includes a bonus golf cart, that makes sense. Those aren’t coming out of left field.”

When Mr. Gold considers where this practice of throwing in an extra car came from, he sees a direct link to how resort homes are generally sold fully furnished with everything you need already there.

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When Los Angeles developers saw how many buyers of homes in the  $10 million to $30 million range were using properties as the equivalent of a vacation home, and only staying there for two or three weeks of the year, they adapted that practice to this market.

It was about five years ago that Mr. Gold noticed that many luxury spec homes in neighborhoods like Beverly Hills and Bel Air were coming fully furnished. Today, he estimates that more than 50% of these properties priced above $20 million come with high-end, modern furniture.

In Manhattan, the developer of a new West Chelsea townhouse, listed for $36.8 million, is applying the same logic, and including a 2016 Bentley, valued at $368,000, as well as modern furnishings, which the client can purchase with the property.   

MORE: U.S.’s Most Expensive Home Hits Market at $250M

“We wanted this mansion to be the complete, turnkey package,” said Compass broker Alyssa Soto Brody in an email. “The home is already breathtaking, but we wanted this home’s buyer to be able to just walk in and start enjoying.” 

A much more extreme example of this same practice is Bruce Makowsky’s 924 Bel Air Road. Listed for $250 million, this 38,000-square foot spec mansion comes with 100 curated art installations, millions of dollars’ worth of classic cars and motorcycles, a deactivated helicopter and a $1 million outdoor TV.

“He did something in an extraordinary way,” Mr. Gold said, “and he’s shooting for a certain type of person that’s going to be completely enamored with the whole thing. I think it’s cool.”

If these are cases where the luxury add-ons make sense from a utility or lifestyle perspective, there are also times when extras are included in an organic way, leading to increased exposure and a sale.

Brad Robson, a listing agent for Place in Brisbane, sold a property that fits that criteria in late-November. The Chelmer house has four bedrooms, three bathrooms, and came with a 1993 Porsche Carrera 911, valued at $100,000. It sold a week before it was meant to go to auction for $2.31 million—an amount that Mr. Robson said the seller was “thrilled” with.

MORE: Buy This Home, Get the Helicopter and Rolls-Royce for Free

“I don’t believe the car was the reason that we sold it for a premium price,” said Mr. Robson, noting that the seller was looking to unload the car at the same time as the house, so they decided to make it a package deal. “What it did was generate a huge amount of interest over and above what we would have gotten without it.”

Because it’s incredibly uncommon to include an extra like this with a sale in Brisbane, Mr. Robson said the curiosity from would-be buyers was genuine. “If everybody was doing things like this, I certainly wouldn’t,” he said.

In the end, the buyer “loves the car, but isn’t sure what he’ll do with it just yet.”

But when the extras are thrown in as an afterthought—neither part of a lifestyle package or included in an organic way—there’s a chance the whole thing will backfire, said Dolly Lenz, the founder of Manhattan-based Dolly Lenz Real Estate.

“As a buyer’s representative, if I see a developer or seller offering a car, trips or other incentives, I see that as a major sign of weakness, and a cue to negotiate hard on behalf of our buyers for those units,” she said. “It’s just so silly. Anyone buying these properties could afford those things on their own.”

Mr. Gold agreed, noting that he recently told a client selling a $3 million West Hollywood house to forget about throwing in a $60,000 car, as he was inclined to do.

MORE: When The House is Just a Starting Point: 3 listings where the perks are plentiful

“That would have been a mistake on so many levels,” Mr. Gold said. “It makes it look like you’re desperate, adds an unnecessary cost, and now, you need to find someone that loves your home and also loves Porsches.”

Not to mention that this type of maneuver can be frustrating when it comes to paperwork tied to the sale. “In general, people don’t want to pay property tax on an extra like a car or artwork,” Mr. Gold said, so they separate the home from the add-on. “You’re basically adding an unnecessary cost that could impact how people look at your house.”    

http://www.mansionglobal.com/articles/52959-luxury-add-ons-of-cars-yachts-or-helicopters-don-t-always-make-the-sale

The Playboy effect: asking prices soar in LA

Wall Street titans and foreign billionaires are vying for famous properties

January 16, 2017 08:30AM 
By Laurie L. Dove 

The Playboy Mansion was listed at $200 million and sold for a record-breaking $100 million. Hugh Hefner, inset, has the right to remain for life.

From the January issue: Blockbuster deals are inspiring some homeowners to go for the gold. After the Playboy Mansion broke the nine-figure barrier in August 2016, homes that sold for mere millions in recent memory hit the market with asking prices in the tens of millions.

Market pros contend that price discovery is an even more delicate art these days, with seemingly more global billionaires than ever freely roaming the market, leading to mega-dollar signs in the eyes of sellers.

“The property starts at a price the seller wants, that’s not supported by real world conditions, and there doesn’t seem to be concern or shame that it’s significantly overpriced,” said Jonathan Miller, president and CEO of real estate appraiser Miller Samuel.

To further complicate matters, when a Los Angeles home has the whiff of Hollywood lore, the question of the right price gets dicier. Sellers and their brokers often find it tough to settle on an asking price for an incomparable home. The Playboy Mansion, for example, originally listed at $200 million in January 2016, before selling for a more than respectable $100 million.

“We had zero comps. I mean, it was the Playboy Mansion. It’s one of a kind on multiple levels,” said Gary Gold of Hilton & Hyland, the co-listing agent on the property with Drew Fenton of Hilton & Hyland and Mauricio Umansky of the Agency. “But when you have a seller with an asset and a buyer with money, and they go through the catharsis of coming together, more times than not they arrive at what the property really is worth.”

Many aspects of the deal were unusual, not least among them, Hugh Hefner. The founder of Playboy Enterprises will be allowed to continue living out his days on the property that his company purchased for $1.05 million in 1971.

Daren Metropoulos, who lived next door, bought the 1927 Arthur Rolland Kelly-designed Holmby Hills mansion, located on five acres at 10236 Charing Cross Road. A principal at the private-equity firm Metropoulos & Co., which owns Twinkie-maker Hostess Brands, he eventually plans to join the two estates, according to a statement on his website.

Hefner may be the poster boy for testing the limits of aspirational pricing on an incomparable home, but he is far from the only seller with the moxie to do so — and to have something to show for it.

Shortly after the Playboy Mansion deal closed, two more Holmby Hills trophy properties sold at or near the $100 million mark.

One of them, a spec house built on Barbra Streisand’s former estate at 301 North Carolwood Drive, listed in April 2016 for $150 million. It closed at$100 million in October, tying for first place with the Playboy Mansion in The Real Deal’s ranking of top residential sales. Along with the usual perks one expects at $2,631 per square foot, the listing mentioned a nail salon, massage rooms and an indoor water wall. The neighborhood is steeped in Hollywood history. The 38,000-square-foot mansion is situated directly across from Frank Sinatra’s former property and down the street from Walt Disney’s former home, the Carolwood Estate.

The property’s new owner, Tom Gores, is the chairman and CEO of Platinum Equity, a private equity firm that oversees more than two dozen companies with $6 billion in assets. He also owns the Detroit Pistons NBA team, among other interests, and currently ranks 194 on the Forbes 400 list. His niece Tiffany Martin of the Agency represented him in the part-cash, part land-trade deal.

A house built on spec on the site of Barbra Streisand’s former Carolwood Drive abode sold for $100 million after being listed for $150 million.

Meanwhile, the legendary Owlwood estate, a 22-room mansion located at 141 South Carolwood Drive, flirted with the record books when it sold for $90 million in September  — $60 million under the original asking price of $150 million, which seems to be the new normal for one-of-a-kind homes. At various times, the properties that were combined to create the 10-acre estate were home to such Hollywood legends as Jayne Mansfield, Tony Curtis and Esther Williams.

“Very wealthy international buyers from China, Singapore, India and Dubai were coming in, looking for a trophy property,” said listing agent Ann Dashiell of Douglas Elliman.

The Owlwood estate’s most famous former occupant — Cher — even stopped by for a tour. She and former husband Sonny Bono purchased the estate for $750,000 in 1974. Cher gained ownership of the house when the couple divorced and sold it to carpet business owner Ralph Mishkin for $950,000 in 1976. He named Owlwood after the birds on the property, and sold it for $4.2 million two years later to a businessman from Monaco, who later expanded the compound by 8.5 acres and sold it for $35 million in 2003.  

Now Dawn Arnall, who purchased the property in 2003 with her late husband, the founder of the AmeriQuest Mortgage Company, has sold it to Bob Shapiro, the CEO of Woodbridge Luxury Homes. Real estate professionals believe that Shapiro plans to divide the estate into housing lots and sell them off one by one.

American fashion designer Tom Ford is yet another bold-faced name to purchase one of the year’s priciest homes. Brokers have known for some time that Ford, the director of “Nocturnal Animals,” was hunting for a new luxury property.

As TRD reported in September 2016, Ford made a $53 million off-market bid on a Beverly Hills estate owned by hotel developer Brad Korzen and interior designer Kelly Wearstler. The 3.2-acre, seven-bedroom house at 809 Hillcrest Road had been purchased by Korzen and Wearstler in 2005. The couple unsuccessfully listed the property in 2010 for $46 million, and again in 2012, by which time the asking price had dropped to $39 million.

(Click to enlarge)

Yet when Ford closed on a home a short while later, it was at a different deluxe address. He picked up the home once owned by Bloomingdale’s department store heiress and socialite Betsy Bloomingdale at 131 Delfern Drive in an off-market deal with her children, who had inherited the estate.

The 10,000-square-foot, nine-bedroom house was being shopped around at $55 million, but according to TheMLS, Ford picked it up for just shy of $39 million, putting it at number five in TRD’s ranking. It includes a distinctive red-walled library and a number of outdoor perks, including a pool house, swimming pool, outdoor living area and a tennis court. The house was built in the 1920s in the Spanish Colonial style, then remodeled in the 1950s by silent film actor and designer Billy Haines. Josh Flagg of Rodeo Realty Beverly Hills was the listing broker.

Another global business titan, Elon Musk, has been on a buying spree. In September, the SpaceX and Tesla CEO snapped up a $24 million off-market property in Bel Air that was in an unfinished state of remodeling. The 14,290-square-foot property, which is located at 954 Somera Road, is the fifth house Musk now owns overlooking the Bel Air Country Club, and his sixth in L.A. In December 2012, he began a string of purchases with a $17 million deal for a 20,000-square-foot house on Chalon Road in Bel Air, which has become his main residence.

Brokers say that even more properties are being shopped around at eye-popping prices. Take the Spelling mansion, for example. The property at 594 South Mapleton Drive — now owned by British heiress Petra Ecclestone Stunt — is currently listed at $200 million, which is $115 million more than its purchase price in July 2011. However, unlike many mansion listings in which pricing seems plucked out of thin air, the house, which was originally built by the late American film and TV producer Aaron Spelling in 1988, has at least undergone a substantial renovation.

Another residence raising eyebrows with its current asking price is 455 Lorraine Boulevard in L.A.’s Windsor Square neighborhood. The home was built in 1913 and afforded historic status not only for its Beaux-Arts style, but also for the slate of presidents — Eisenhower, Kennedy, Johnson and Nixon among them — who were guests of longtime owners Norman and Dorothy Chandler.

The 9,329-square-foot, six-bedroom, eight-bathroom house was sold by the Chandlers in July 1997 for about $2 million. Nigerian furniture magnate Robert Oshodin bought it for $9.5 million in June 2014. Pros doubt his improvements justify the current $50 million asking price.

“A lot of these asking prices are made-up numbers rather than being based on any comps,” Miller said. “It’s probably more common than we realize, because everybody is fixated on the top line number and not how the sausage is made.”

The Playboy effect: asking prices soar in LA

Top real estate sales of 2016: L.A.’s record year included two $100-million sales

 

Jim Bartsch

The Playboy Mansion, which sold last year for $100 million, was among the $19.8 billion in L.A.-area properties sold between November 2015 and November 2016.

 

Neal J. Leitereg Contact Reporter

Jan. 6, 2017 6:00 AM

Storied estates and speculative development in Los Angeles County’s toniest neighborhoods pushed the high-end market to new heights in 2016.

Of the dozen single-family home sales of $30 million or more, two changed hands at $100 million — a record-setting mark once thought of as unattainable.

Here’s a larger look at the most expensive homes sold this year in Greater L.A.

$100 million — Holmby Hills

Daren Metropoulos, the son of billionaire investor C. Dean Metropoulos and principal at the investment firm Metropoulos & Co., made real estate history in August with the purchase of the Playboy Mansion.

The $100-million deal for Hugh Hefner’s longtime home and workspace was the biggest sale of a single-family residence ever recorded in Los Angeles County, eclipsing the previous county record set two years ago when the Westside manor known as Fleur de Lys sold for $88.3 million.

The Gothic Tudor-style home was designed by Arthur R. Kelly for department store scion Arthur Letts Jr. in 1927. The 29-room house includes chefs and catering kitchens, a game room and a screening room with a built-in pipe organ. Twelve bedrooms are within 20,000 square feet of living space; the master suite spans two floors.

As part of the sale, Hefner will remain at the estate for the remainder of his life. Metropoulos, who owns a property adjacent to the Playboy Mansion, plans to eventually connect the two estates.

Gary Gold and Drew Fenton of Hilton & Hyland, an affiliate of Christie’s International Real Estate, and Mauricio Umansky of the Agency held the listing for the mansion. Jade Mills of Coldwell Banker Residential Brokerage represented Metropoulos.

$100 million — Holmby Hills

In October, Platinum Equity founder and Detroit Pistons owner Tom Gores matched the record set by the Playboy Mansion with the purchase of a mega-mansion built on speculation.

The complex deal saw Gores trade a number of his own holdings as opposed to financing or making an all-cash purchase. He will retain a stake in the other properties in the event that they are developed or sold.

Developed by Gala Asher and Ed Berman, the more than 30,000-square-foot house is on a site where an estate once owned by Barbra Streisand once stood. Including several guesthouses, the property has 10 bedrooms and 20 bathrooms including a master suite of more than 5,000 square feet.

Ginger Glass of Coldwell Banker Previews International was the listing agent. Tiffany Martin and Christine Martin of the Agency represented Gores.

$90 million — Holmby Hills

Owlwood, the Carolwood Drive estate once home to actor Tony Curtis and later singing duo Sonny and Cher, sold to a development group headed by Woodridge Luxury Homes chief Robert ShapiroDawn Arnall, the widow of late billionaire and Ameriquest Capital Corp. founder Roland Arnall, was the seller.

Sitting on 10 acres of grounds, the residence includes a 12,200-square-foot Italian Revival-style mansion, two guesthouses, a swimming pool and a tennis court. The development group intends to retain the main house and subdivide the property to build four additional homes, according to sources not authorized to comment on the deal.

The Arnalls bought the home in 2002 along with two adjacent properties — the former homes of actress Jayne Mansfield and actress-swimmer Esther Williams — that were combined into one estate. Both residences were later razed, though the pool house and 70-foot-long swimming pool from Williams’ former home were retained.

Ann H. Dashiell of Douglas Elliman held the listing. Adam Rosenfeld and Kyle Giese of Mercer Vine represented the buyer.

$40 million — Beverly Hills

Tom Gores, as part of his $100-million purchase, sold a mansion on Beverly Park Lane to a California limited liability company.

Although details are scant, tax records show that the sprawling Mediterranean has 20,013 square feet of living space with seven bedrooms and 15 bathrooms. A large motor court, a swimming pool and spa, lawns and formal landscaping fill more than two acres of grounds.

Gores, through a limited liability company, bought the property six years ago for slightly more than $21 million, records show.

 

$39 million — Bel-Air

Developers Jonathan Adler and Joe Englanoff, through a Nevada-based LLC, sold a contemporary-style mansion built on speculation for $9 million less than the original list price of $48 million.

Designed by Paul McClean, the 14,230-square-foot home includes such amenities as a media room, a billiards room and a gym with a steam room. A wine cellar is accessed by way of a thumbprint security system.

Motorized glass doors open to an outdoor lounge and expansive decking. A 90-foot infinity-edge swimming pool also lies within the grounds.

Brandon and Rayni Williams of Hilton & Hyland Ben Bacal of Rodeo Realty, Mauricio Umansky of the Agency and Jade Mills of Coldwell Banker were the co-listing agents. Fred Bernstein of Westside Estate Agency repped the buyer.

$38.75 million — Beverly Crest

Designer and filmmaker Tom Ford finally found his trophy estate in December, buying the home of late socialite Betsy Bloomingdale for about two-thirds of the rumored asking price of $55 million.

The Roland Coate-designed home, built in 1929, sits on more than three acres in the 100 block of Delfern Drive and has a formal rose garden, a tennis court, a swimming pool and a pool house.

Architectural firm Marmol Radziner has been commissioned to update the home, which includes a wood-paneled library, a billiards room, formal and informal dining rooms and a pair of kitchens. There are a total of nine bedrooms and seven bedrooms in 9,680 square feet of living space.

Josh Flagg of Rodeo Realty was the listing agent. Kurt Rappaport of Westside Estate Agency represented Ford.

 

Link to article:  http://www.latimes.com/business/realestate/hot-property/la-fi-hp-top-sales-20170107-story.html

 

Playboy Mansion Sold for $100 Million, but Hugh Hefner Is Staying

 

The new tenant, owner of Hostess Brands, will acquire the zoo, the grotto, and a silk-pajama-wearing resident

 

TEXT BY COLLEEN EGAN AND MELISSA MINTON

PHOTOGRAPHY BY JIM BARTSCH

 

Posted August 16, 2016

The Playboy Mansion has a new owner. The storied property sold for $100 million—just half of the $200 million listing price, which made it the most expensive estate in Los Angeles at the time. The new owner is Daren Metropoulos of the private equity firm Metropoulos & Co., which owns dessertmaker Hostess Brands. Metropoulos also owns the house next door, having bought the adjacent property for $18 million in 2009, according to The Wall Street Journal. One of the world’s most famous (or infamous) properties, the Playboy Mansion occupies five acres in L.A.’s prestigious Holmby Hills enclave bordering the Los Angeles Country Club. It’s also the home of Playboy founder Hugh Hefner, who will have a life estate according to the terms of the sale, meaning that he can stay there until he dies. (Considering he’s the man who made the mansion and its parties the stuff of legend after Playboy Enterprises purchased the home for $1.05 million in 1971, that doesn’t seem entirely unreasonable.)

“Aside from it being the Playboy Mansion, it’s also one of the finest estate properties in the country,” says Gary Gold, executive vice president of real-estate firm Hilton & Hyland, who is one of the listing agents, along with Drew Fenton of Hilton & Hyland and Mauricio Umansky of the Agency. “It’s literally the best of the best of the best. Properties like this don’t come up for sale.”

Construction of the Tudor Revival mansion began in 1927, and the main house has six bedrooms, six baths, and two powder rooms. The estate also includes a four-bedroom guesthouse and a two-bedroom games house.

“To me, quite honestly, the biggest highlight is the architecture itself—the house is absolutely stunning,” says Umansky, CEO of the Agency. “We don’t have a lot of 1920s architecture here in L.A.” He adds that the interior will need some refurbishing, “but you’re starting off with a piece of art.” And the new owner agrees. Metropoulos said in a statement that he is less interested in the home’s wild past and more interested in preserving its architectural significance.

The grotto might be the most talked-about feature of the grounds, but other highlights include the zoo (the home is one of the few private residences in L.A. with such a license), the lagoon-style pool, the tennis court, and the rolling lawns.

“The grounds are absolutely breathtaking,” Gold says. There’s also a koi pond, a small citrus orchard, and two well-established forests of tree ferns and redwoods. After Hefner’s reign comes to an end, Metropoulos plans to combine his two properties into one that will span 7.3 acres.

 

http://www.architecturaldigest.com/gallery/playboy-mansion-for-sale-200-million-hugh-hefner-staying

 

WAN Awards House of the Year 2016 – 9601 Oak Pass

HOUSE OF THE YEAR ENTRY 2016

 

Completion Date: January 2015

 

Joe Fletcher

Oak Pass House, Beverly Hills, United States
Walker Workshop

The Oak Pass Main House sits atop a 3.5-acre ridge site with panoramic canyon views. The property’s topography and landscape, which most notably include over 130 protected Coast Live Oak Trees, were the primary drivers for the house’s design. In order to showcase and amplify the site’s inherent beauty, the house’s mass is buried into the hillside, with only a one-story pavilion above grade as it unfolds along the ridge. 

The house’s upper level is composed of an array of masses that contains the kitchen, living, and dining areas. Each of these components rotates slightly to frame a unique perspective, together creating a panoramic impression of the canyon from the inside. Floor-to-ceiling sliding glass doors pocket into the walls, dissolving the structure into a series of planes that facilitates a gentle continuity between the interior and exterior spaces.

On the lower level, a hallway to the east grants access to the bedrooms, which open to sweeping views of the canyon below. A sunken courtyard flanks the hallway, bringing in light and air from above, and creating a more intimately-scaled outdoor space that serves the house’s private programmatic functions.

On its exterior, the house meets the site delicately by absorbing, reflecting, and merging with its features. Much of the lower level sits beneath a vegetated roof, which folds the structure into the hillside and pulls the landscape to the base of the living spaces above. Bisecting the house, a seventy-five foot infinity lap pool creates continuity between the trees and their reflection in the water, accentuating the vastness of the landscape and extending its most striking characteristics across the property. 

The material palette, both on the interior and exterior of the house, is reminiscent of the earth, and enhances without overpowering the landscape. The use of a primarily concrete structure enables longer spans and cantilevers throughout the house, creating a weightlessness of form that at critical points anchors firmly into the earth. This method of construction generates a simultaneous impression of lightness and heft, a juxtaposition that is characteristic of the tree-lined hills of which the house becomes an integrated component.

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http://backstage.worldarchitecturenews.com/wanawards/project/oak-pass-house/?source=sector&mode=listing&selection=longlist

First look: Playboy Mansion Marketing Images

Hugh Hefner’s multimillion dollar listing is on the market — it’s being sold by Gary Gold

Published on Jan 12, 2016

BY AMBER TAUFEN  STAFF WRITER

 

Marketing is everything when it comes to sales. The listing agents behind the Playboy Mansion — Gary Gold and Mauricio Umansky — have the benefit of a very well-known brand and name behind the property, which recently went up for sale with a $200 million asking price.

But recent press about the condition of the mansion has been less-than-glowing. A 2013 Vice article describing the property as “kinda depressing” has been on the front page of Google results for the “Playboy Mansion” search term for months, and with Playboy’s announcement that it would no longer be publishing nude women in magazines, the question of whether the company is still relevant in the digital age is being widely debated in the publishing community.

Add that to a contingency that the mansion’s current owner, the illustrious Hugh Hefner, be allowed to continue to occupy the property until his death, and the sale could get even tougher. Hef might be in his late 80s, but it’s also safe to assume he’s received top-notch medical care for most of his life. He could be kicking around for another five to ten years, or possibly even longer than that.

Well, the infamous “they” say that a picture is worth a thousand words. If that’s the case, then these press-ready photos that Gold and Umansky shared with Inman should be getting Hef a lot closer to that coveted $200 million price tag. The mansion looks just as stately as it did when it was first built in 1927.

The last remodel on this seven-bedroom, 14,000-plus-square-foot dwelling was completed in 1947, according to public records.

The most likely buyer? My guess is either a history buff, especially someone interested in the history of publishing — or a startup tech wizard who’s got fond memories of the magazine.

 

http://www.inman.com/2016/01/12/first-look-playboy-mansion-marketing-images/

Hugh Hefner’s Iconic Playboy Mansion is Going on Sale for $200 million

Chris Michaud, Reuters

  • Jan. 11, 2016, 5:36 AM
  • 14,021

Charley Gallay/Getty Images for Playboy

The cocktail hour during an advance screening of “Entourage” at the Playboy Mansion on May 20 in Los Angeles. 

The iconic Los Angeles mansion of Hugh Hefner, the founder of the Playboy empire, is being put up for sale for $200 million, Playboy Enterprises said, one of the highest asking prices for a private residence in the United States.

The Gothic Tudor-style mansion, which has an area of nearly 20,000 square feet (1,858 square meters) and boasts 29 rooms, sits amid 5 acres in Holmby Hills west of the city.

In addition to amenities such as a tennis court and a free-form swimming pool, the estate is home to the infamous Playboy grotto, which over the years served as the setting for some of Hefner’s most lavish, hedonistic parties.

The mansion, in which Hefner still lives, also has a zoo license, the company said in a statement announcing the sale.

“The Playboy Mansion has been a creative center for Hef as his residence and workplace for the past 40 years, as it will continue to be if the property is sold,” the statement added.

 

http://www.businessinsider.com/hugh-hefner-playboy-mansion-on-sale-for-200-million-2016-1

 

The Upside of Downsizing Your Home

Downsizing your homeMost people think of downsizing as something you do in retirement. It can happen when the kids leave home or retirement looms or your first grandchild is born hundreds of miles away. You start to think about leaving a house that’s now too big for you and downsizing to a smaller house or condo or a retirement community. So, you sell the large family home to moving to a smaller, retirement-style home, free up some cash and have more to spend on leisure.

To many, downsizing is a negative: smaller house, less space, cutting back. But, downsizing can be an important step in “upsizing” your life. You just have to determine what “downsizing” means to you.

Smaller Space, Bigger Life

Moving to a smaller space (as in “fewer square feet”) doesn’t have to mean that you have less living space. Many family homes have large square-footage cut up into little spaces to house multiple family members. When downsizing from a large family home, look for a layout that maximizes the living space so that you don’t feel closed in. That might mean an open floor plan, more windows, adding outdoor living space, foregoing formal spaces or even choosing a wall-less loft.

An important idea to keep in mind is that downsizing shouldn’t mean moving into a smaller version of what you already have. Moving from a four-bedroom/three-bath 5000 square-foot home into a four-bedroom/three-bath 1800 square-foot home just feels cramped and crowded. Moving your living area, home office and master bedroom into an 1800 square-foot two bedroom, open floor plan, however, can seem like a mansion. In fact, some people find that fewer rooms mean more living area to enjoy.

Less space doesn’t necessarily translate into less money. For example, you may long to live downtown, You may find the lifestyle you want in an active-adult community or a continuing-care retirement community

Freed-Up Cash? Or, Freed-Up Life?

Okay, yes, for some people, the purpose of downsizing is to free up cash for other things. If however, freeing up cash isn’t your aim—for example, if you need to reinvest all the money from the sale of your family-sized home as part of your financial plan—downsizing into an upscale high-rise condominium or townhome in your favorite urban area can massively upgrade your lifestyle.

Think of it … spend your evening at the theatre, dining out or entertaining friends at the rooftop pool. Just being able to lock the door and head to the airport for some long-anticipated trip without having to arrange for a house-sitter, lawn-care and yard work, or the myriad other requirements of property frees you to travel on a whim, be spontaneous, grab a good deal on a weekend cruise or visit the kids and grandkids as often as you like.

Even if you can’t afford a luxury place, where you locate your new home can free up your life from the tedious efforts of maintaining a larger property. If having freedom to do other things is important to your new life goals, make certain your real estate professional knows: lifestyle options may exist that you’ve never thought of.

If you’ve thought about downsizing, your real estate professional can help you determine the best options for your lifestyle and goals.

Trophy Property Where All The Rage Last Year

trophy propertyAs the global economy continues its recovery, record sale prices of luxury goods and luxury homes continue to capture headlines and intrigue the buying public around the world. What we are seeing in our current market is that $100 million is now the benchmark for this ultra-exclusive category, as more consumers move to collect “trophy” properties. More properties above $100 million were listed in 2014 than ever before.

As the number of wealthy individuals rises, inventory in coveted markets is dwindling and extravagance is spreading to new areas. A thriving real estate market tends to have a cascading effect across the luxury sector, with consumers turning to other categories after a property is secured. Location, lifestyle, and provenance, particularly at the top end of the luxury residential real estate market, are the hallmarks of value and often equally as important as price when high net worth individusals consider a property purchase.

The traditional luxury market has often been pegged at $1 million and higher, according to Christie’s. The ultra-affluent, however, regularly escalate the benchmark. London and Beverly Hills, CA have the highest entry-points with luxury homes starting at $6 and $8 million, respectively. High-value urban market sales rose 15 percent from the year-ago period, largely because of millennials growing up and baby boomers transitioning into new phases of life.,Cities are still performing strongly, not at the levels we saw in 2014, but we expect 2015 to see sustained, healthy growth from major economic hubs. Second home markets led the growth of high-value sales in 2014,

As the global affluent continue to thrive, markets everywhere will rejuvenate.

Tight Inventory Challenges Propel Home Prices

spring home salesA fourth national market report has added to the evidence that winter inventories are extraordinarily—even dangerously—low.  Realtor.com has joined RE/MAX, NAR and Zillow in reporting levels significantly below last year.

The dramatic drop in listings tracked by REMAX echoed findings by NAR, Realtor.com and Zillow that supplies are tighter than they were last year and even two years ago when lack of supply sparked double digit prices increases and bubbles in several California markets

The realtor.com January National Housing Trend Report shows that inventory has decreased 6.7 percent month over month and 8.7 percent year over year.

Sales were also down dramatically from December. the number of home sales decreased 32.1 percent from a robust December and were nearly 5 percent below sales in January 2014, according to the National Association of Realtors. Typically, January closings are lower than those in December. Higher prices, coupled with weak supply, caused an unexpectedly large drop in January home sales.

Most markets are struggling to achieve the proper balance of homes for sale and qualified buyers, said realtor.com.  Low inventory has become a national challenge as homeowners opt to stay put longer—a record 10 years—rather than move up and move on. Most housing markets are appreciating in value as homes sell faster. In fact, prices increased 8.8% in January over 2014, according to the report.

On a year-over-year basis, the Median Sales Price has now risen for 36 consecutive months. Price appreciation is the result of pressure from year-over-year inventory losses. Inventory has dropped by roughly 10 percent for the last three months. There is strong demand, but it is hitting a roadblock in supply. Potential buyers are saying they can’t find a home that meets their needs and/or budget.

We are not seeing enough growth in inventory to support recovering demand Prices will therefore continue to rise in a market when demand outstrips supply. Home prices are beginning to grow at a faster pace again, which is not good for the spring market. Sticker shock was behind weak sales in 2014, but as price gains began to ease, buyers came back. Now prices are heating up again due to severely weak supply.

Chinese Spending Billions on California Real Estate

california real estate marketWealthy Chinese with a few million yuan to burn will spend billions on U.S. real estate in the years ahead, according to a report released Wednesday by CB Richard Ellis, a large global real estate firm.

The United States is the country of choice for China buyers.  Canada and Australia come in next at No. 2 and No. 3 respectively. That rich Chinese individuals and savvy corporations are buying up real estate in world class cities is no surprise at this point.

News of new Chinese real estate deals are popping up every quarter.  Similar moves happened with the Japanese back in the 1980s. Now it’s China’s turn. And by most estimates, they are snatching up high end real estate in Los Angeles, San Francisco and New York, in particular. In California, China is the third largest foreign buyer of real estate, following Mexico and people from the Philippines, according to Realtor.org.  Across the country, however, Chinese purchasers bought over $10 billion of U.S. real estate in 2011 and account for 9% of foreign U.S. house buyers, second only to Canadians, according to Juwai.com, a Chinese real estate website geared towards international home shoppers.

By comparison, and across the 50 states, the Chinese buy more U.S. homes than Indians, Mexicans or the British. While Mexicans are big in California and all across the south, China still ranks within the top five foreign nationalities buying real estate in 44 states.  China, for instance, is ahead of Mexican buyers throughout the more costly Northeast. They already are the number one foreign buyer group in states like West Virginia and Massachusetts. They are number two in New York, Maine, Indiana, Missouri, Colorado, Wyoming and Hawaii.

Companies are starting to cater to this niche globe trotter looking for their dream home. The Chinese are interested in real estate as both investment opportunities and also second homes outside of China. The properties they purchase as their own personal homes tend to be in the $1 million to $5 million range whereas as investment purchases range from $500,000 to $2 million, according to Affinity China.

Residential properties are as hot as commercial ones right now. Home prices in the U.S., coupled with economic uncertainties and tight regulations designed to curb a housing bubble in China, are driving record Chinese investments in the U.S. residential and commercial real estate markets, according to the Asia Society, a multinational think tank with offices throughout the U.S. and Asia Pacific.

What You Need to Know About Your Listing Agent

questions-which-you-must-ask-your-real-estate-agent-1-638Are you thinking of selling your house? Are you dreading having to deal with strangers walking through the house? Are you concerned about getting the paperwork correct? Hiring a professional real estate agent can take away most of the challenges of selling. A great agent is always worth more than the commission they charge just like a great doctor or great accountant.

Real estate agents are key to buying or selling a home, but not all agents are created equal.You want to deal with one of the best agents in your marketplace. To do this, you must be able to distinguish the average agent from the great one. Having a good rapport and feeling comfortable with the agent is imperative since you’ll have to disclose personal information, like your wish list, finances and timelines. “If you don’t get along with this person and don’t like their style, no matter how good they are, it’s a long process and you want to have a good working relationship with your realtor

Here are the top 5 demands to make of your Real Estate Agent when selling your house:

1. Tell the truth about the price

Too many agents just take the listing at any price and then try to the ‘work the seller’ for a price correction later. Demand that the agent prove to you that they have a belief in the price they are suggesting. Make them show you their plan to sell the house at that price – TWICE! Every house in today’s market must be sold two times – first to a buyer and then to the bank.

The second sale may be more difficult than the first. The residential appraisal process has gotten tougher. Surveys show that there was a challenge with the appraisal on almost 20% of all residential real estate transactions. It has become more difficult to get the banks to agree on the contract price. A red flag should be raised if your agent is not discussing this with you at the time of the listing.

2. Understand the timetable with which your family is dealing

You will be moving your family to a new home. Whether the move revolves around the start of a new school year or the start of a new job, you will be trying to put the move to a plan.

This can be very emotionally draining. Demand from your agent an appreciation for the timetables you are setting. Your agent cannot pick the exact date of your move, but they should exert any influence they can, to make it work.

3. Remove as many of the challenges as possible

It is imperative that your agent knows how to handle the challenges that will arise. An agent’s ability to negotiate is critical in this market.

Remember: If you have an agent who was weak negotiating with you on the parts of the listing contract that were most important to them and their family (commission, length, etc.), don’t expect them to turn into a super hero when they are negotiating for you and your family with the buyer.

4. Can I talk to your three most recent clients?

Talking directly with former clients will give you a better understanding of an agent’s style. Ask whether an agent’s clients are mostly from referrals or repeat business — it’s a sign that clients have had good experiences with the agent.

5. Get the house SOLD!

There is a reason you are putting yourself and your family through the process of moving.

You are moving on with your life in some way. The reason is important or you wouldn’t be dealing with the headaches and challenges that come along with selling. Do not allow your agent to forget these motivations. Constantly remind them that selling the house is why you hired them. Make sure that they don’t worry about your feelings more than they worry about your family. If they discover something needs to be done to attain your goal (i.e. price correction, repair, removing clutter), insist they have the courage to inform you.

How Do I Increase My Home Value?

improve your home chicagoA common question for prospective home sellers is “How can I increase my home’s value or get a higher selling price?” In our earlier articles on this subject, we discuss low budget and economical fixes and upgrades that can increase the perceived value of your home. In this article, we discuss those higher cost items that only give you a high return on your investment if you have high equity in your home or will lose more money if it doesn’t sell quickly.

Many buyers look for a home they can move into immediately. While the specifics depend on the age and condition of your home, here are the priority renovations that increase your home’s appeal and return on investment potential.

  • Kitchen. No matter what the other advantages of your home, if the buyers do not like the kitchen, they are less likely to make an offer. new appliances. New, matching appliances including ovens and stovetops or ranges, dishwashers, refrigerators, microwaves and refrigerators instantly update a kitchen. So, if you are planning major upgrades, head to the kitchen first.
  • Paint, refinish or replace the cabinets. If your cabinets are dated, damaged or dark, consider replacing them or painting them with a lighter, newer version that still fits into the home’s style. If you’ve never painted cabinets, consider hiring a professional since they are more difficult than painting walls, and poorly painted cabinets actually decrease the appeal of your kitchen.
  • Replace countertops. If granite is all the rage in your neighborhood and comparable homes have granite countertops, consider this upgrade. Granite requires professional installation to measure, cut and polish the rock correctly. A less expensive version, granite tile, is easier to install, but has less overall value.
  • Add Upgrade lighting, fans and fixtures to match the style of your new cabinets and countertops.
  • Kitchen floors with carpeting, vinyl or worn and broken tile should be replaced with new ceramic or other tile, wood, or another new product. Make sure you only replace kitchen floors with flooring that can handle the traffic, spills and constant cleaning that a kitchen requires.
  • Bathrooms. No new homeowners want to feel as if they are using someone else’s bathroom. Replace the vanity, sink and toilet. Use low-flow toilets, water-saving faucets and other green products. Replace the floor and shower surround with a neutral tile. If your bathroom has a built-in tub/shower replace it or have it professionally refinished to look fresh and new.
  • Living areas. Carpets harbor dirt, dust mites and stains. Replacing the carpet in major living areas with hardwood increases the visual appeal of your home. As an instant upgrade, hardwood gives your home that updated look. It also attracts buyers that cannot live in carpeted homes for health reasons.
  • Heating, air conditioning and water heater
  • These major home appliances often are out-of-sight and out-of-mind, but a new buyer wants to know they’ll work when they need them.
  • Exteriors. To increase the value of your home, improve the “R” rating and make your home more economical, consider replacing the roof, insulation, siding and windows. If your home has hail or other storm damage, check with your homeowner’s insurance to see if they will cover the replacement. Using better quality, energy-saving products gives your home more curb appeal and buyers know they won’t have to worry about leaks and drafts when weather hits.

Let us help …

We can assess the potential R.O.I. for these and similar upgrades to your home. Call us for an evaluation of your home’s fair market value.

Los Angeles High End Home Sales Surging

luxury real estateBy most measures, the housing market these days is a bit sluggish. Prices are flat. Sales are drooping. A lot of people are priced out.

But not everyone. The high end is hopping.

Luxury home prices in Los Angeles continued to soar in the third quarter, posting five straight quarters of double-digit gains, boosted by low interest rates and tight inventory, according to a survey by First Republic Bank.

Luxury home sales in Southern California are hitting levels not seen in decades. The number of homes bought for $2 million or more in recent months is the highest on record. Sales worth $10 million or more are on pace this year to double their number from the heights of the housing bubble.

The value of luxury homes (or homes valued at more than $1 million) in the Los Angeles area jumped 13 percent from the third quarter a year ago and 3.7 percent from the second quarter. The average price for a luxury home in the area hit an all-time high of $2.61 million. The third quarter was strong across most markets from West L.A. to Malibu, prices are very strong and buyer interest is greatest for homes selling for $2 million to $5 million

Low interest rates, a strong stock market and waves of cash sloshing in from overseas are boosting demand for high-dollar homes. A record 1,436 homes worth $2 million or more were sold in the six-county Southland in the second quarter, according to CoreLogic DataQuick.

The biggest difference in the luxury market between now and a decade ago is that the world is smaller. Wealthy international buyers are scooping up second homes, investment properties and safe havens for their cash. And it’s easier for them to scout — and travel — the world to do so.

The Southland scores points with these buyers for its weather, its glamour and a population diverse enough that nearly any transplant can feel at home. And despite its reputation as one of the nation’s least-affordable housing markets, Los Angeles can look like a steal compared with other high-end havens. Private wealth managers around the world think California is a very good market right now, compared to New York or London, L.A. real estate is a bargain.”

But it’s not just foreign money that’s heating up the high end.

A surging stock market has boosted portfolios for domestic buyers in recent years, especially for those who have money to invest. Low interest rates have made mortgages cheap. And banks — still risk-averse — are offering lower rates and better terms to deep-pocketed borrowers than to cash-strapped first-time buyers. Meanwhile, wealthier households have seen their incomes grow faster than average in recent years.

High-end home sales are surging in “Silicon Beach,” too, with tech entrepreneurs and Bay Area transplants scooping up multimillion-dollar homes in Santa Monica, Venice and Marina del Rey. Many of the buyers work in the area and prefer walkable neighborhoods, relatively close to work, to the traditional hubs of Westside glitz.

5 Reasons to Buy a House Now

best-time-to-buy-a-homeThe down payment, interest rate, economic factors, qualification variables can be so confusing. Rising rates, loosening requirements, down payment options, buyer’s market, seller’s market. What does it all mean for you if you want to buy a home? The truth is that while the banks might have a magical formula to determine your mortgage worthiness, determining if the time is right really comes down to three main questions:

Do you want to buy a home?
Are you financially prepared?
Is your credit where it needs to be?

If your answer is yes, then you should take that leap of faith and go for it. Here are six reasons to do it now.

1. Prices are good. In most regional markets, home prices are still gaining, but have slowed. This is good news if you were afraid that big price gains would put homeownership out of reach and also bodes well for your long-term equity once you purchase. Attempting to buy a home when the market is at its lowest point—or to sell at the peak—is tricky. Like trying to time the stock market. ,you might get lucky one or two times, but overall, timing the market does not work. It is all about purchasing power, and that’s a reflection of price and interest rates, which will both be higher in the future.”

2. Rates are low. Mortgage interest rates are still low—for now. A 30-year-fixed-rate loan now averages 4.16%, according to Freddie Mac, but many economists believe we will see 5% rates next year. As interest rates increase, so do your monthly payments. Imagine the unthinkable. paying over 18% interest on a 30-year fixed mortgage.  That was the reality for home buyers in October 1981. The average rate has been 5.18% since the start of this country’s history,” making today’s rates, which hover around historic lows at 4%, sound even better.

3. Loan requirements are softening. It is not quite the look-the-other-way-and-stamp-it-approved levels of 2008, but the overly tough restrictions that followed have loosened. Major lenders are making adjustments, and lowering the minimum FICO score for borrowers applying for loans. You can look to banks that have lowered loan-to-value standards in certain markets for both jumbos and conforming mortgages. For buyers that can mean an easier road to loan approval, even without a ton of money upfront and perfect credit.

4. Fewer buyers around the holidays means less competition. Sellers that are actively looking to sell their homes during the holiday months — namely, October through December — are serious about shedding their residences. This often works in favor of savvy buyers looking to get favorable terms on an aquisition. Having less competition on the buyer’s side can mean lower prices on homes, in addition to fewer counter-offers to compete against.

5. It’s time to move on with your life. The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But, what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

How Elections Affect Home Owners

your_vote_counts_button_3One of the very first discussions the Founding Fathers had was about how to balance the rights of all individuals with the rights of those who owned property. They knew that if only property owners could vote, the rights of individuals and minorities might be suppressed … but, if voting extended to non-property owners, the rights of property owners could be unfairly overruled. In the end, they left the question of voter rights to the individual states. Now, nearly 240 year later, with suffrage extended to all citizens, with or without property, the question remains:

“Do elections affect property owners differently than non-property owners?”

Levies

Nearly every municipality imposes property taxes on homeowners for, well, owning homes (and other property). The tax authority typically bases these taxes, or mill levies, as a percentage of the assessed value of the property owned. Proceeds from levies on property fund local services including:

  • Law enforcement
  • Roads, bridges, street lights, and other infrastructure
  • Public schools
  • Emergency services
  • Debris and snow removal

Each locality and school district sets the property tax rates each year to meet the needs of that community. This means that tax rates vary widely from one municipality to another, and even between neighborhoods. They can increase each year, or may even decrease. For homeowners, voting for or against a levy affects property owners in two ways:

The actual tax increase affects a property owner’s bottom line. Yearly property tax increases might push the cost of owning a home higher than the owners plan, or higher than their income can bear. Putting stress on property owners’ financial situation may make it more difficult for them to maintain their property. Homes in distress can bring down the value of an entire neighborhood.

When homeowners vote to increase levies—such as those that provide local services, upgraded roads, improved schools or increased emergency personnel—they are voting to increase the value of their homes and communities, making them more attractive to buyers.

Voting for or against levies is a delicate balance between increasing an owner’s outgo with increasing the property’s value and the community’s desirability. Researching the fiscal impact of the levy you intend to vote on is an important first step in determining how it may affect your bottom line.

Sales Taxes

Taxes based on the sale of goods typically spread the burden of the tax across both property owners and non-property owners. Sometimes, however, a sales taxis for a specific neighborhood or commercial area. If you own property in an area with a higher sales tax rate than one nearby, it can determine how easily you keep your space leased to shop owners since customers may choose to shop elsewhere.

If you are new to home ownership, increases in sales taxes make purchasing furnishings and appliances more expensive. If you are considering upgrades and improvements, renovations or additions, a tax increase may expand your scope costs.

Other Taxes

Taxes specifically affecting homeowners include those like the one embedded in the Affordable Care Act. It taxes the capital gains income of upper-bracket homeowners that sell their home at a sizable profit and even taxes rental income from investment property.

Candidates

Decisions by both national and local elected officials—from state senators to congressional representatives, governors to county commissioners, city council members to school board members—impact the future levies imposed on local property. Knowing your candidates and how they hope to legislate their agenda can affect both your bottom line and your property values.

Not only are elections about national and state officials, international and social concerns or party platforms—they are about local schools, streetlamps, parks and 911 services.

Voting

Do not leave decisions that affect property ownership to others. Take the time to vote in your local and national elections. Balance how a levy can affect your immediate bottom line with the impact it might have on the sale of your property

Out With The Old House, When Buying the New?

Buy-sell-hold-skaffoldThe current housing market, while up in most areas, has one basic problem: low supply. With many buyers choosing to keep their old home when they purchase a new home, fewer homes are on the market, driving up demand.

Buyers that do not need the equity in their current property in order to purchase the home into which they are moving, are choosing to become landlords instead. The financial crisis and ensuing recovery has increased the demand for rental housing. In fact, the cycle of buyers not selling their current home before buying a new one reduces the supply for homes to buy, thereby raising the prices and pricing entry-level buyers out of the market. Unable to buy the home they can afford, they then seek to rent a home that better meets their needs instead, resulting in rental price increases due to higher demand.

For those able to become landlords, it is somewhat of a perfect storm since the ability to demand a higher rent increases the income from your rental property, increasing your equity.

Don’t forget the other advantages of being a landlord too. Since your former home is now a business for tax purposes, repairs, maintenance, utilities, taxes, insurance, some fees, and other costs may be tax deductible. Be sure to consult a qualified tax accountant to find out what your tax liabilities or deductions may be when making your former home a rental. Remember too that collected rents count as business income, so be sure to establish proper accounting records for your property.

Some property owners, especially if they lived in the property, find it difficult to make the shift from homeowner to landlord. They mourn painting over their faux finishes with generic rental neutrals, and seeing a nursery turned into an office. They worry about potential damage to their property, and the associated costly repairs, and they fret about the possibility of months without a renter and having to pay on two mortgages at once.

The best solution toward making this shift is to hire a professional property manager. A professional helps you establish the appropriate rental amounts to cover both the initial mortgage and other costs and repairs that may become necessary. In addition, they offer a buffer between the owner and the renter that keeps the relationship entirely professional. Having a property management service handle your rental and renters can give you peace of mind while ensuring that your former home is in good hands.

As your real estate professional, we can connect you with a property management professional, so let us know what your plans are so we can help.

Has the Real Estate Market Peaked

Positive Housing MarketOne of the oddest things about this current housing market is the dwindling amount of supply.  For areas like Los Angeles and nationwide, total housing supply has been on a downward trajectory since 2010.  While an environment of rising home prices, less supply, and hungry buyers would lead you to believe that more home building would be occurring, not much of that has actually happened.Though the housing market is recovering nicely, it is not doing quite as well as some analysts had predicted. There has been no shortage of excuses offered as to why this is: the rise in interest rates, more stringent lending standards, the weather. However, we feel that there is one factor that is most responsible for curtailing the number of houses sold – the number of houses available for sale!

Inventory Levels are BELOW Historic Norms

In a recent economic forecast, Freddie Mac addressed this exact issue: “Including newly built homes in the inventory count, the total number of homes offered for sale relative to the number of households in the U.S. has been running at the lowest level in more than 30 years, as shown in the second exhibit. The relatively low for-sale inventory reflects several features of today’s market.” “A supply-constrained market (holding other factors constant) will result in a decline in the volume of sales and an increase in real transaction prices.”

NAR Report Confirms Inventory Constriction

History shows us that a balanced real estate market requires a six month supply of available housing inventory. The National Association of Realtors released their Existing Homes Sales Report last month. The report revealed that we are still only at a 5.5 month supply of homes for sale. We have not reached the 6 month mark in over two years. The recent increase in buyers now looking will again put a strain on this number. .

Bottom Line

While inventory levels remain below historic norms, it will remain a seller’s market. This being the case, if you are considering selling your home, now may be the time to list it for sale.

‘Luxury’ is a Much Abused Word in Real Estate

luxury real estateProperty ads urge us to “indulge in opulence” and promise to “pamper you in comfort”. While the glossy brochures and virtual tours may impress you, you often find that the features offered don’t justify the exorbitant price tag of a luxury home.

Luxury is by far the most abused word by residential real estate. As the term is freely used, it becomes important to know the essential features that define luxury.

Living space
Generous living space is a primary requirement of any well-designed home. Luxury homes must offer spacious living rooms,  large gourmet kitchens, well equipped media room and oversized closets  with elaborate systems to organize wardrobes, ample dressing areas and space to pack suitcases.

Attention to detail
In every aspect — from the wood work, to the wall coverings, the hardware, the electric switches, the kind of lighting. Technology is a significant detail with amenities like  home automation systems and electronic surveillance. — A luxury home remains pristine if well maintained.

Exclusivity
While these amenities may be widely available, one key must-have in a luxury home is exclusivity; it must be shared by a small number of people.

Your style
All said, you should see if what you are getting is ‘your’ style. After all, it may turn out that the designer features do not match your personality and definition of lifestyle.

Custom-built
Ideally you may wish to have every aspect — floor plan, materials, features, amenities — designed exclusively for you. Short of full custom, you will definitely want your luxury home to be customized with a high end renovation offering a move-in ready home

What’s Driving the Luxury Housing Market

9305-Nightingale-Dr28The biggest drivers behind the continued expansion of luxury home sales: Low mortgage rates, rising consumer confidence, cash buyers, and international buyers. International buyers are fueling some purchases, with an estimate of up to 20% of buyers in L.A. being from overseas. Many of them are paying full cash, speeding up closings and eliminating the need for appraisals. This year we are on pace to exceed the the all time high of 697 home sales over $5 million in California set last year in 2012, many of which were all-cash deals. However, with low mortgage rates, some luxury home buyers are financing their home purchases. Jumbo loans are traditionally associated with higher interest  rates– about 0.25 percentage points more — than they do for conforming loans, according to the Mortgage Bankers Association. But over the past couple of months, the tables have turned. “Never in my memory have jumbos been such a bargain,” said Peter Grabel, a loan officer at Luxury Mortgage Corp. For example, some buyers who traditionally would pay cash are instead securing sub 3 percent interest rates and 10-year loan terms. One big reason jumbo rates are so low is because lenders want to attract wealthy clients and hang on to them, said Malcolm Hollensteiner, head of consumer lending for TD Bank. Once clients sign up for a mortgage, the bank can “cross sell them other products, like brokerage services,” he said. As for pricing,  it won’t be long before the U.S. sees a $200 million listing — the record now is believed to be $190 million for a property in Greenwich, Conn. — but that many of these ultra-high-end properties are priced that way merely as a suggestion, or to invite only a certain caliber of buyers to the table. Most ultra-high-priced homes end up selling for 50% to 60% of the original list price.  We are also seeing an increase in pocket listings, or listings that aren’t publicly put into the multiple-listing service, both as a way to keep a seller’s name confidential and to up the exclusivity factor.

Home Price Increases Are Slowing

Home-Prices-UpHome price increases will end up at 6.7 percent year-over-year before slowing to roughly 4.3 percent next year, on average, and eventually falling to 3.4 percent by 2018, a panel of more than 100 forecasters concluded. The Home Price Expectations Survey was conducted from Oct. 21, 2013 through Oct. 31, 2013 by Pulsenomics LLC on behalf of Zillow, Inc. The survey of 108 economists, real estate experts and investment and market strategists said appreciation is expected to remain strong through the remainder of this year, but the pace of home value growth is predicted to slow considerably. Based on current expectations for home value appreciation over the next five years, panelists predicted that overall U.S. home values could exceed their May 2007 peak by the first quarter of 2018. “Rising mortgage rates, diminished investor demand and slowly rising inventory are all contributing to a modest cooling off of the housing market, which is both expected and welcome after months of unsustainable, breakneck appreciation,” said Zillow Chief Economist Dr. Stan Humphries. By comparison, the CoreLogic Case-Shiller Indexes, though they reached 10.1 percent year-over-year in the second quarter over 2012, are expected slow to an average of 5.4 percent across all U.S. markets by the end of this year. CoreLogic Case-Shiller projected that price appreciation will decelerate through the second half of 2013 and into the beginning of 2014.

Investors Demand Easing: Opens Door for Buyers

The proportion of investors involved in the housing market has fallen in the last few months. As their numbers dwindle, it may allow other buyers to step in, according to housing experts.In recent years, many buyers—particularly first-time home buyers—may have lost out to investors’ all-cash offers on homes. Banks and sellers may have been lured by the idea of a quick deal that cash offers typically provide over offers from buyers who require financing. But with less competition from investors, some housing experts say this may allow an opportunity for other potential buyers to get into the market. Investors have gone from accounting for 23 percent of home purchases in February to about 20 percent in June—the lowest level since September 2012, according to data from Campbell/Inside Mortgage Finance survey. With mortgage rates rising in anticipation of the Federal Reserve scaling back the generous stimulus to the economy it introduced during the financial crisis of 2007-2009, investors are pulling back. Their numbers will likely decrease even more in the coming year. About 48 percent of investors recently surveyed say they plan to lessen their home purchases over the next year, according to a recent survey by ORC International. Only 20 percent of the investors surveyed say they plan to buy more homes in the next year, a drop from 39 percent 10 months earlier. The softening of investor demand has also coincided with a drop in sales of so-called distressed properties, whether foreclosures or short sales. These homes usually sell for less than others and had been the focus of investor interest. In July, distressed homes made up only 15 percent of sales, according to the National Association of Realtors. That matched June’s reading, which was the lowest since the group started monitoring distressed sales in October 2008.

Real Estate App DreamCommerce Adds New E-Postcard Feature

Real Estate App DreamCommerceLuxury real estate agent Gary Gold recently discussed with trade publication Inman News a new feature available on the mobile real estate app he co-founded, DreamCommerce. Dubbed DreamCards, the new tool allows agents to send to their clients “e-postcards,” which are images of a particular home feature accompanied with lines of text.

DreamCards is just the latest innovative product from DreamCommerce to aid in the home shopping process, according to the Inman News report. Gold, who co-founded DreamCommerce with David Ragones, explained the benefits of DreamPro to the publication.

“DreamCards allow agents to send a personalized message with a beautiful listing photo to clients, leads, or their mobile farm in only a few taps on their smartphone or tablet,” Gold said.

This new tool has many intriguing possibilities, but at its core it fosters better and more timely communication between an agent and client. A DreamCard screenshot provided shows an image of a beautiful kitchen with hardwood floors, accompanied with this simple text:“the one?” Now, not only can agents provide pictures to their clients, but also things like analysis and thought-provoking questions.

According to Inman News, a free version of the DreamPro app allows an agent 25 DreamCards a month. The “Social Plus” edition at $15 a month provides agents with a custom referral code to brand the DreamHouse app, as well as 25 DreamCards. For $25 a month, the “Hero” edition provides the branding and 50 DreamCards.

The report also points out there are already thousands of consumers and hundreds of agents that take advantage of the DreamCommerce app.

‘Hipster-Flippers’ Making Mark on Los Angeles Real Estate

(Businessweek photo)

You can call them hipsters or, as the U.S. Census Bureau defines them, the “creative class,” but however you prefer to acknowledge this large segment of the Los Angeles community they are beginning to put their mark on the L.A. housing market.

According to a story in Businessweek, “hipster-flipper” shops with names like Better Shelter and ModOp Design “are bringing an artful take to the renovation game” in Los Angeles. What they are doing is entering formerly run-down segments of Los Angeles and refurbishing the homes there with that hipster flair.

“There’s an inexhaustible supply of hipsters in L.A.,” said real estate developer Steve Jones. “You saw the same thing happen in Brooklyn. The hipsters pushed out until they got to the water.”

Rather than the quick and cheap flips that are pervasive in real estate, L.A.’s creative class is making serious upgrades to homes that match their aesthetic. Jones said that has changed the face of Los Angeles real estate.

“What the market had been offering in terms of renovated homes was bad laminate flooring, granite countertops—the Home Depot school of remodeling,” Jones told Businessweek. “There had to be a buyer who appreciated better design.”

The U.S. Census Bureau defines L.A.’s creative class as people who work in the fields of tech, business, media, entertainment, law and health care. They earn in average of $81,000 a year and make up 34% of the workers in Los Angeles.

What’s really got the real estate world buzzing is these buyers are paying big money for homes “with a suitcase full of money.” One real estate professional told BusinessWeek people are paying over 10% of the asking price—all cash—and with no contingencies.

In fact, almost one-third of home sales in Los Angeles were all cash during the first quarter of the year. The median price of these purchases was $351,000.

With Real Estate in a Sellers Market, Time is of the Essence

sellers marketA similar story is emerging throughout the country: it’s a sellers market in real estate. From New York to Los Angeles, and mostly in between, bidding wars and cash offers are increasingly common enough that the New York Times has weighed-in on the development.

Broker Mickey Conlon expressed this sentiment to the Times after listing a New York home for $1.89 million and riding a bidding war to a cash payment of $2.16 million.

“It’s the kind of insanity you live for in this business,” Conlon said.

Of course, that’s a single instance, but the message is clear: real estate is back. Recent developments make it increasingly enticing to either go house shopping or to list your home on the housing market.

The Times offers its usual plethora of insight on the housing market in this article. Here are just a few takeaways from the piece:

–Always be on top of the latest listing

–Forget about getting a deal

–Don’t delay

–Be thorough

–Raise your down payment

–Set your ultimate price

–Sign your contract quickly

Additionally, even in a sellers market, having the right listing price is critically important. This means sellers should not think the sky’s the limit when putting a price on their home, nor go to low on their asking price.

Housing Market Offers Up More Encouraging News

housing marketThe Case-Shiller home price index, a closely-monitored monthly report from Standard & Poor, revealed home prices posted their biggest gains in seven years in April. For three months now, home prices have risen in each of the 20 major U.S. cities monitored in the report.

The New York Times offered up an encouraging view of the housing market in an article last week that cites continued increases in new and existing home sales as well as the number of building permits. As home prices continue to rise, construction companies are responding by ratcheting up building projects and hiring additional workers. Additionally, the Times reports consumer confidence is also on its way up.

The chief economist for RDQ Economics, John Ryding, spoke with the Times about the latest string of encouraging data.

“Five years after the start of the financial crisis in earnest, and four years and a week’s time from the beginning of the economic recovery, we’re finally starting to get more of a pickup,” Ryding told the Times. “It’s been a very drawn-out process, but you have to remember what we’ve been digging our way out of.”

The Case/Shiller home index showed home prices were up on average by 10.9% in April as compared to April 2012. The Times notes there are several factors driving the housing recovery, beginning with a loosening of the labor market. In fact, jobs have increased in each of the last 31 months, which means more people are able to spend on homes.

However, the current supply of available homes is low and with demand increasing, prices are of course going up. If that trend continues, more people are likely to in turn put their homes on the market and the recovery will accelerate even faster.

An economist with JP Morgan Chase told the Times that while home prices are likely to continue to rise in the coming months, it isn’t likely to be at the double-digit rate seen last month.

“You’ve had this dynamic that has been favorable for price increases now, but it’s also favorable for supply to come back on market, so that will mean some moderation in the pace of price increases,” Daniel Silver told the Times.

 

Marina Del Rey Redevelopment Readies for Massive Expansion

Marina Del Rey

Marina Del Rey is undergoing a major facelift.

Marina Del Rey redevelopment is poised to undergo an extensive redevelopment and expansion project that will add more than 1,100 residential units to the seaside community. The development will cater to young professionals, many of whom are being drawn to the area largely through the growing number of technology businesses that are cropping up on the Westside.

The Los Angeles Business Journal reports the Marina Del Rey project had been left on the county’s backburner for more 10 years, largely due to regulatory and economic issues. However, as the housing market and overall economy began to improve—coupled with the Westside’s increase in commercial activity—a flurry of projects have received the green light to commence.

Marina Del Rey was developed in the 1960s and consists of 804 acres. The Business Journal notes that the community housed a much younger demographic during its formative years, which is something it will try and at least partially recapture in the build-out. The thought is many young professionals who are being hired to work in the new tech businesses on the Westside will want to live close to work and may find Santa Monica to be too pricey and/or congested.

Real estate agent Gary Gold is bullish on the Marina Del Rey development.

“I moved here 12 years ago and the upside potential is huge,” Gold said. “I predict Marina Del Rey prices will rival or exceed Santa Monica in the next 10 years. Google has taken a huge position in Venice with offices. The few single family homes in Marina Del Rey west of Lincoln will be highly coveted.”

In addition to the 1,100 residential units, which will begin being completed in the coming months, the project will also entail a refurbishment of Fisherman’s Village retail center and the Marina West Shopping Center. All told, there is expected to be $680 million in construction in Marina Del Rey in the coming years.

“If you go around to the different shopping centers, the demographic is definitely getting younger,” one real estate professional told the Los Angeles Business Journal. “The people I talk to like the fact that they’re young professionals that are single and wanting to go out to eat and do things in the evening. I think that will continue to energize the area.”

Home that Inspired Beatles’ Classic ‘Blue Jay Way’ Sold by Charlize Theron

Blue Jay Way

1567 Blue Jay Way, Los Angeles (Zillow photo)

A home that moved its former owner, George Harrison, to pen the hit song “Blue Jay Way” was recently purchased for $3.8 million by a buyer represented by agent Gary Gold of Hilton & Hyland. Located at 1567 Blue Jay Way in the Hollywood Hills, the property was most recently owned by actress Charlize Theron.

According to the Zillow Blog, the Blue Jay Way property was built in the late 1960s as part of the “Bird Streets” development in the Hollywood Hills that proved an instant hit among musicians and other celebrities. Part of its appeal is the fact the secluded neighborhood is elevated, providing breathtaking views of the city below. Other celebs to live on the “Bird Streets’ include Leonardo DiCaprio, Jennifer Aniston and many other A-listers.

The Zillow Blog notes Harrison wrote “Blue Jay Way” during a brief moment of inspiration while sitting at an organ at the home while waiting for a friend to pick him up. It was later released on the Beatles’ Magical Mystery Tour album in 1967.

The home provides a perfect example of mid-century architecture, according to Zillow’s description. It is U-shaped and has 4,116 square feet of living space. It has three bedrooms an three bathrooms and features glass walls, media screening room, pool and those excellent views.

Theron paid $3.625 million for the home in 2009 and had been testing the market waters off and on during the last year. It was initially listed for $4.599 million, but that price was incrementally lowered during the next 10 months.

Home Prices Grew By 8.1 Percent in January

Home PricesA closely monitored study of sales activity in 20 U.S. cities revealed home prices rose by 8.1 percent in January on a year-over-year basis, which is the biggest such increase in prices since June 2006.

The S&P Case-Shiller index showed home prices rose across all cities monitored by the study in January. Phoenix led the way with a 23 percent increase and several other cities saw prices surge by double-digit percentage points, including Los Angeles. A CNNMoney report on the study noted cities that were particularly hard hit when the previous housing bubble burst are now leading the recovery.

Several factors have helped to spur the growth in home prices. Most notable of these are the current favorable buying conditions, which includes historically-low mortgage rates; a low inventory of available homes; a drop in foreclosures and an improving overall economy.

Analysts remain encouraged by the current direction of the housing market.

“The market still has a long way to go nationally, but the healing process—and a return to a normalized housing market—is definitely underway,” Jim Baird, chief investment officer for Plante Moran Financial Advisors told CNN Money.

To illustrate the point of the market still having a long way to go, CNNMoney noted the S&P Case-Shiller index remains 28.6 percent below its 2006 peak.

In another study released this week, the Commerce Department revealed the sales of new homes slowed slightly in February from the previous month, but was still up a healthy 12 percent from February 2012. Analysts cited bad weather in February as a potential reason for the slowdown. However, they stressed market fundamentals remain strong and home sales are expected to accelerate even faster in the coming months.

 

Surging Prices Beginning to Lead to a Sellers Market in Los Angeles

Luxury Real EstateReports continue to stream out confirming the current strong growth of the Los Angeles real estate market. In fact, home prices in Los Angeles last month were up by more than 20 percent as compared to in February 2012.

The Los Angeles real estate market has been particularly hot at the high-end level, especially on the Westside. Our friends over at the Valerie Fitzgerald Group gushed at the development in this following excerpt from a recent blog post:

“Wow! What an amazing 2012 we experienced in Westside residential sales,” Fitzgerald said. “2012 was the best year ever recorded for high end sales. A ‘buyers market’ turned into a ‘sellers’ market in most Westside neighborhoods in all price ranges.”

Helping to spur the rise in prices and the increase in sales activity has largely been an improving economy, favorable buying conditions and a supply shortage that has changed the real estate dynamics. Economist Lawrence Yun elaborated on the current state of the L.A. real estate market, noting pending home sales have been up each of the past 21 months on a year-over-year basis.

“Favorable affordability conditions and job growth have unleashed a pent-up demand,” Yun said. “Most areas are drawing down housing inventory which has shifted the supply/demand balance to sellers in much of the country. It’s also why we are experiencing the strongest price growth in more than seven years.”

According to statistics provided by the Valerie Fitzgerald Group, the average listing price for a home in Los Angeles for the week ending Feb 27 was $1,22,899, which was up 0.4 percent from the previous week.

From December 2012 thru February 2013, the median sales price of a home was $376,000. That marks a 27.6 percent increase from the previous year’s corresponding period.

 

Optimism Abounds in L.A. Real Estate Following Positive Reports

A trio of much-anticipated reports on the housing market showed the nationwide recovery continues with no signs of disruption on the horizon and the Los Angeles area is doing particularly well.

According to an analysis of the reports by the Daily News, home prices in the Los Angeles metro area were up 10.2 percent in December from the year prior. That was much better than the average gain of 6.8 percent for the country’s 20 largest metro areas measured by the S&P Case Schiller Home Price Index.

Analysts quoted in the Daily News story were understandably bullish after learning of the results. The continuing rise in home prices, which is partly the result of fewer distressed properties being on the market, isn’t likely to slow anytime soon.

“It was clear in the data that there was not going to be another (price)let down,” Craig Lazzara, senior director at S&P Dow Jones Indices told the Daily News. “And data on housing starts and permits confirm that the housing market is in pretty good shape.”

Local homebuilders told the paper that there have been waiting lists for new housing units under construction since last year when the steady climb in home prices began in earnest. In January, the sales of new homes was up 16 percent from the previous year.

There is also plenty of demand in the resale market, which is also partly the result of a lack of supply. Supply is down in part because of the number of homeowners that are still underwater on their mortgages. Most are waiting for prices to rise even more before offering their homes for sale.

That could be sooner than many think the way things are going. The data, general consensus and anecdotal evidence says its all—the L.A. housing market is firmly back on its feet.

Real Estate a Seller’s Market, Wall Street Journal Reports

With home prices back on the rise, it’s becoming abundantly clear that we’re in the midst of a seller’s market. The Wall Street Journal made the proclamation last week following an analysis of the the latest report from the National Association of Realtors.

Several factors have led to a continuous increase in home prices throughout the nation, not the least of which is a severe shortage supply. According to the N.A.R, the number of properties for sale fell by 4.9 percent in January on a month-by-month basis to 1.74 million. The total housing supply in the U.S. hasn’t reached such depths since December 2009. To give you a further idea on how supply has fallen, the Wall Street Journal points out there were 2.91 million homes on the market in January 2011.

As a result, this lack of supply—coupled with a growing number of buyers that includes a surge in investors—has helped to put home prices on a steady trajectory.

California has been among the states hit particularly hard by the supply shortage, the Wall Street Journal points out. Most experts believe the housing market could be growing even faster if there was an adequate supply. However, many homeowners in California remain underwater on their mortgages and are reluctant to sell until prices increase even further.

Many analysts are optimistic that nationwide home sales could reach 5.2 million units this year, which would represent a 12 percent increase from 2012. However, other concede that mark could prove elusive if supply doesn’t loosen and potential buyers are forced to hold on to their money.

2012 Saw Huge Jump in Sales of Million-Dollar Homes

While overall home sales in California increased by a solid 8.2 percent in 2012, it was the high-end of the real estate market that particularly surged. According to the Los Angeles Times, sales of million-dollar homes in the Golden State last year reached heights not seen since prior to the housing crash.

There was a 26.9 percent spike in the number of homes that sold for more than a $1 million in California last year. The 26,933 homes that sold past that threshold in 2012 was the most since 2007, but still far from the all-time mark of 54,773 million-dollar homes that were sold in 2005. Particularly pushing the increase was the sale of multi-million dollar homes, according to the Times’ analysis of a recently-released DataQuicks report.

To illustrate that point, the story notes the number of homes that sold for more than $5 million in California, 697, was a 42 percent jump from 2011.

Among the top 10 locales for million-dollar home sales in 2012 were Beverly Hills and the Brentwood section of Los Angeles. Silicon Valley was the site of the most homes that changed hands for a million dollars or more last year. That includes the highest-priced home sold in the state. A home in the Woodside section of Silicon Valley featuring 8,930-square-feet of living space and nine acres of land sold for $117.5 million.

DataQuick officials noted safe-haven investing and return on investments available given the current low interest rates played a key role in the surge of million-dollar home sales last year.

One final note–it was revealed that 7,791 high-end buyers paid cash for their homes, which is the highest number ever recorded and a big leap from 2011 when 5,082 million-dollar homebuyers paid cash.

 

Want to Buy a Home? Here’s a Step-by-Step Look at How It’s Done

Owning your own home has been part of the American Dream ever since the ‘shot heard round the world’ set off the American Revolution. To help make that dream a reality in 2013, Realtor.com has provided 10 resolutions to help in a successful quest.

  • Decide What You Want—Given the commitment of buying a home, the first step is to decide on EXACTLY what you are looking for in terms of location, price, and what kind of home you need.
  • Get Your Financial House in Order—This means to figure how much you will have available for a down payment and what your monthly budget would allow for a mortgage payment.
  • Get Your Pre-Approval Before House Hunting—Meet with a loan officer and get a pre-approval letter that states your financial records have been reviewed and you can readily qualify for a given loan amount.
  • Find Your Realtor—Given the complexity of purchasing a home, it is highly-recommended a real estate professional is hired to help guide you through the buying process.
  • Find Your New Home—You can go through online listing of homes for sale that match your exact specifications, and/or you can use a realtor to provide a list of suggested homes that match your criteria
  • Understand Your Mortgage Options—Buyers should learn as much as they can about the various mortgage options available, which will determine the ultimate cost of a home
  • Make An Offer—You have three options at this step, according to Realtor.com. They are accepting the listed price and drawing up a contract; make a counter-offer with different terms; or reject it and not make an offer
  • Protect Yourself with Insurance—Title insurance, which protects you in case it is later found the title of a property is actually invalid; and homeowners insurance, which protects against fire, theft and other liability
  • Close on your New Home—With advances in technology, this has become a more streamlined process, according to Realtor.com. In this step, you get one final chance to walk through the home to make sure there have been no changes in its condition since the sales agreement was signed
  • Tie Up Loose Ends—This step includes determining all of the utilities you will need to run the home. Additionally, be sure and hold on to all the paperwork of the sale as these can be used for tax purposes.

We hope this helps in your house search and that 2013 is the year you purchase your own home. Happy hunting.

As Confidence Grows, Number of New Households Continues to Surge

The housing meltdown of a few years back resulted in a myriad of consequences, not the least of which were many Americans were forced to delay entry into the housing market. That trend has now been flipped. Growing confidence of the U.S. housing market among Americans has resulted in a surge of new homes rising up across the country.

According to Reuters, the number of new homes came in at nearly 1.2 million in 2012, which was about 100,000 more than the previous year and a far cry from the output of 2008 thru 2010 when there was average of just 500,000 new homes being started. As a result, new home building is at its highest level in more than four years, which has turned housing “from the economy’s sorest spot to its brightest,” Reuters reports.

The increase in home building still hasn’t been able to keep pace with the increase in household formation. This has led to the much-chronicled supply shortage currently being felt, notes an economist for Stamford, Ct.-based RBS.

“The rise in household formation bodes well for the economy,” Guy Berger told Reuters. “Instead of having too many houses, we are turning to a situation where there aren’t enough.”

To illustrate this point, Reuters notes how many students that graduated during the depths of the recession were forced to move back in with their parents. Now, they are starting to set out to form their own households because of greater confidence in the greater U.S. economy.

The housing market is showing such marked improvement that analysts are predicting it will take over from manufacturing as a key driver of the U.S. economy. In fact, one economist for JP Morgan forecasts residential investment will increase 22 percent in 2013, which would be the biggest increase since the early 1980s.

 

New Income Tax Rates Likely to Impact Luxury Real Estate Market

2012 was a very good year for the luxury real estate market, but the question now is will that trend continue given the increase in taxes high-end buyers will face in 2013 as a result of the “fiscal cliff” deal reached in Washington D.C. earlier this month.

According to an examination of the situation by Forbes, sales of luxury homes reached a four-year high last year and the final quarter of 2012 was particularly active. That was largely the result of sellers desperate to close transactions prior to the tax rate increase. The “fiscal cliff” deal hammered out by Congress and President Obama increases the income tax on households earning more than $450,000 to 39.5 percent from 35 percent. Most observers quoted in the story believe the tax increase, along with the high-volume of activity in the final quarter of 2012, will likely lead to a slight slowdown during the opening months of 2013.

To give you an idea of how brisk activity in the luxury real estate market was at the end of 2012, Forbes notes sales in Manhattan in New York City were up 29 percent in the last quarter as compared to 2011. In Greenwich, Conn. the surge was even more pronounced. In December, sales were up a whopping 89 percent from December 2011.

Despite a potential slow down in activity during the short term, expert don’t believe it will subdue home prices. That’s because given the heavy action to close the year, supply has been squeezed which means prices should in fact still continue to increase.

A Los Angeles-based real estate professional echoed the sentiments, noting that, especially in Southern California, there is an influx of foreign buyers still looking to join L.A.’s well-heeled communities like Beverly Hills and Malibu.

 

Sales of High-End Homes Rose Dramatically in Los Angeles in 2012

 

The highest-price home sold in Los Angeles last year. (LA Times photo)

Helping to spur an improved housing market in Los Angeles in 2012 was a dramatic rise in sales of homes at the top of the market. According to the Los Angeles Times, the number of homes that sold for more than $5 million last year in L.A. reached a level that has not been seen since 2007.

Records from DataQuicks show that in the first 11 months of 2012, there were 296 homes that sold for more than $5 million in Los Angeles. Topping those purchases was the $36.944 million paid by Oracle Corp. CEO Larry Ellison for a home in Malibu that was previously owned by Yahoo Inc. head Terry Semel.  The number of high-end homes sold last year was exactly double that of 2009 when the housing market collapsed, and nearly 100 more than in 2011.

The Times noted that several “A-list” celebrities landed luxury homes in Los Angeles last year, including Ryan Seacrest, Ellen DeGeneres and Jennifer Anniston among others. In fact, Seacrest paid the second highest-amount for a home in Los Angeles last year when going to $36.5 million for a Beverly Hills compound that was previously owned by DeGeneres. In turn, DeGeneres spent $17.4 million on an 8,500-square-foot home in Beverly Hills.

There was one other Los Angeles home that sold for more than $30 million in 2012. According to the Times, a 36,000 square-foot French Palladian-style mansion in Beverly Hills was bought for $34.5 million by C. Frederick Wehba, a founder of real estate investment firm Bentley Forbes.

As you would guess by the big jump in high-end home sales, plenty of others in the L.A. celebrity set are getting in on the real estate action in 2012. Among those are Leonardo DiCaprio, who is asking $23 million for his three-home compound in Malibu; and Jennifer Anniston, who paid $20.97 million for an 8,500 square-foot home that sits on three acres in Bel Air.

Opportunity Abounds in Housing Market for Both Buyers and Sellers

With home prices back on the rise, this is a perfect time for both buyers and sellers to get off the sidelines and back in on the action. That’s according to CNN, which this week offered an “action plan” outlining how to best take advantage of this long-awaited market upswing.

According to CNN, home prices are expected to rise by one percent across the nation in 2013—though Western locales such as Los Angeles are likely to see an even bigger increase. While that’s certainly a modest gain, it does suggest home prices have hit bottom and there are good deals to be had whether you are a buyer or seller.

To give you an idea on the expected increase in home-sale activity moving forward, the Mortgage Bankers Association projects new home loans are expected to jump by 55 percent (based in dollars) in 2013. That means there are plenty of people expected to jump back into the housing market.

If you are looking to take advantage of this increasing demand, CNN suggests two key elements for sellers to focus on. These include properly pricing your home and focusing on the appraisal.

As an example of properly pricing your home, CNN point out in San Francisco, one of the nation’s hottest seller’s markets, only properly priced homes are receiving multiple offers. That’s because buyers aren’t necessarily getting into bidding wars. The average home in San Francisco is selling for 103 percent of listing price, not the 120 percent level that was previously seen.

CNN suggests when having your home appraised that you always have your agent on hand. Appraisers should also be given an information package prepared by your agent that includes any upgrades or renovations to the home.

The main thing pointed out for buyers in the article was to be ready to make an offer if you’re looking for a home. One agent told CNN your first offer should be very close  to your best offer. The only change in that would be if the house has been on the market for at least three months. Then you could be a little more aggressive with your offer.

 

‘Tis The Season For Great Real Estate Deals

Good deals are often available during the Holiday season.

You may not have known it, but we are smack in the middle of the best two-week period of the year to make an offer on a house. That’s right, each year from Dec. 3 thru Dec. 14 bargains in the housing market are to be had thanks to a variety of reasons, according to the blog at The Deeper Pockets.

The online real estate magazine provided several tips to take advantage of year-end home-buying, one of which was to only make cash offers this time of year. First, though, let’s take a look at why this is such a good time to make an offer on a home.

As the story notes, by getting a bid in by December 14th you should have time to take all the steps necessary to get the deal closed by Dec. 31st. Why is this important? Largely because banks typically want to move excess supply prior to the new year. This means they will often accept drastically reduced offers.

One other interesting point The Bigger Pockets makes is that during this time of year, people are often enmeshed in the holiday season and other year-end projects. So,that widens the opportunity for those willing to put in the time.

In addition to only making cash offers, The Bigger Pockets also suggests that you keep the inspection period short and that you go back and make a re-offer on bids from earlier in the year that were denied.

Time is running short to take advantage of this early holiday gift, so let’s get going.

Is This Flippin’ Easy? Luxury Re-Sales Turning Big Profits in L.A.

High-end home flippers are currently making 20 percent and higher on their investment.

In case you need any more signs the housing market is getting back on track, the Los Angeles Times reported this week an increasing number of high-end homes are being “flipped” for lucrative profits.

The numbers in the article are staggering. For example, a mansion in Beverly Crest owned by Rihanna was purchased for $4.5 million last year and, following a modest upgrade, is back on the market with a price tag nearly double—$9.95 million.

Flipping homes—which is defined as a home being bought and resold within six monthsis up 25 percent from a year ago across the nation, according to the Times. It’s been particularly trending in the luxury market. The reason is simple. Flippers in the luxury real estate market are currently seeing returns on investment of more than 20 percent, one real estate analyst told the Times.

Leading the spike in profits is a shrinking supply of high-end homes and purchase terms that are agreeable even on a historic level.

“There’s a sentiment now that you don’t really want to miss the boat,” UCLA professor Paul Habibi told the Times.

Those looking to get in on the action probably need to act fast. To give you an idea of the supply shortage, the Times pointed out there are generally enough unsold homes to fill up to seven months of transactions. Right now there is only a 5.7 month supply of homes selling for a million dollars and up, a sharp downturn from last year when there was a 10.7 month supply.

Locales drawing attention from high-end flippers include Hollywood Hills, particularly the Birds Street area; West Hollywood, Beverly Hills and Venice.

Report: Home Prices in Los Angeles Will Continue to Rise in 2013

A study reveals home prices in California will increase in 2013.

Home prices in the Los Angeles metro area have been on a steady climb since earlier this year and that trend is expected to continue throughout 2013, according to a report from Zillow.com.

In the next calendar year, home prices in the Los Angeles area are expected to increase another 3.5 percent. Home prices currently average $397,000 in Los Angeles and Orange counties. That is an increase of 2.7 percent from this time last year, Zillow reports.

Home prices in the L.A. area have been rising since the first quarter of 2012, according to the Times report. A look at the entire U.S. housing market shows home prices in Los Angeles are increasing faster than the national rate and will continue to do so next year. According to Zillow, home prices nationally increased by 1.3 percent from the second quarter to the third quarter of 2012. The Los Angeles Times reports that is the biggest quarterly gain in the national housing market since March 2006.

As for 2013, the real estate web site expects home prices nationally to increase by another 1.7 percent. The current median price for a home in the United States is $153,800.

Celebrities Go to Great Lengths to Keep Real Estate Deals Quiet

Given today’s celebrity-obsessed culture, many stars of the entertainment and sports worlds are now going to great lengths to keep things quiet when putting their high-end homes up for sale. According to the Los Angeles Times, such tactics as “pocket listing” and selling under the name of a trust are being employed to keep the hard-charging celebrity media and others at bay.

Real estate agents that work with high-end properties told the Times celebrities more than ever are using “word-of-mouth marketing”, or pocket listing, instead of using online marketplaces like Realtor.com, Multiple Listing Service, or others.

One example given is the home of Madonna located in Beverly Hills. It is well-known among the deep-pocketed that the pop singer’s 16,500 square-foot mansion is currently for sale with an asking price of $28 million. However, you won’t find it listed on anything that is accessible to the general public.

This has led some high-end real estate professionals to focus their businesses almost entirely on the emerging trend of pocket listings. Their selling points to celebrity clients are pocket listings will maintain privacy and also put them in the loop when the best homes are quietly place on the market.

Another tactic celebrities employ to protect their privacy is by buying properties under the name of a trust. It can be named anything, but it’s usually a good idea to give the trust a generic title, said one professional in the luxury real estate market. The Times offered Britney Spears as an example supporting that premise. The singer apparently bought and sold homes under Love Shack Trust, but that was eventually traced back to Spears because of its association with the pop star.

One professional suggested generic names are really ideal because a Google search would result in millions of hits.

 

Sale of U.S. Real Estate To Foreign Buyers Up 24 Percent In Last Year

Foreign buyers are coming to America. (NBC photo)

More evidence of the strength of foreign buyers in the U.S. housing market revealed itself in a report by NBC News this week. The network was the latest to bring to light how in recent months well-off home-buyers from around the globe are snatching up real estate in the United States, often because it is considered a safe place to put their money.

According to NBC, buyers from Canada, Mexico and China are at the forefront of the foreign invasion. As one broker said in the report, “Their money is safe here. Even if they only break even on a property they know they can get their money out.”

Foreign buyers are scouring all levels of the United States real estate market, but particularly in the “luxury” sector. As pointed out in the story, the National Association of Realtors reported purchases of U.S. homes by foreign buyers reached $82.5 billion between March 2011 and March 2012, a 24 percent increase from the previous year .

Areas that have seen a major influx of foreign money includes several cities in Florida, which tend to be favored by South American buyers; Texas, which typically attracts buyers from Mexico; and California, particularly San Francisco and Los Angeles, which have seen an influx of Chinese buyers.

The numbers break-down like this: Canadians led all international buyers with nearly 24 percent of all foreign sales, which equates to about $16 billion; China was next with 11 percent of all foreign sales totaling $9 billion; and Mexico is third with about $6.5 billion in purchases.

The article goes on to point out most foreign buyers are looking to buy larger homes—or “McMansions,” as they are referred—than the average American. The exception are buyers from Mexico, who buy homes that are actually slightly smaller than the average American buys.

A ‘Global Billionaires’ Club’ Joins New York’s Midtown Skyline at One57

View from One57 Tower in Midtown New York. (MSNBC photo)

The borough of Manhattan in New York City is known for its high-priced residences, but it’s never seen anything like the new 1,004-foot “global billionaires’ club” that is near completion along Central Park in Midtown.

According to the New York Times, One57 will become the tallest building in New York with residential units when it opens. In the meantime, apartments in the building are being snapped up at staggering costs by some of the world’s most well-heeled buyers. According to the Times, since units were put up for sale in November contracts totaling more than $1 billion have been signed. The most expensive unit is an 11,000-square-foot duplex that sold for $95 million, which is a new record for a New York penthouse.

As has been well-chronicled of late, the luxury real-estate market in New York has been booming throughout 2012. The Times’ illustrates that point by noting there have been a string of record-breaking sales this year in Manhattan, topped by the $88 million paid for a penthouse by the daughter of a Russian billionaire in March. That record was shattered by the $95 million duplex at One57.

Some New York real estate professionals have signaled their amazement in the amount of wealth that’s converged on One57. As noted, high-end buyers have flocked to New York real estate this year and One57 has not been an exception.

The president of property appraiser Miller Samuel, Jonathan J. Miller, described the scene to the Times.

“The scale of wealth in this building is just unheard of,” Miller said. “Despite all the problems economically, you are seeing these people invest in real estate unlike any other period that has ever happened.

One57 cost $1.5 billion to build. Its apartments offer 360-degree views of the city with sight-lines to many of New York’s landmarks, beginning with Central Park directly below and the Statue of Liberty in the distance.  According to the Times, “fewer than 40” of the 92 apartments at One57 are still on the market. This includes four full-floor apartments that cost a minimum of $50 million each.

International Buyers Help Lead to Increased Demand For $10 Million Homes

Wehba Mansion

A quartet of California ZIP codes, led by Beverly Hills 90210, saw a flurry of action in the sale of homes for $10 million and up during the 12-month period ending in June 2012.

According to a study by Coldwell Banker Previews International, 21 of 56 homes that were listed for at least $10 million during that one-year period in Beverly Hills were ultimately sold. Other California ZIP codes that saw heavy sales activity at the $10 million and up level included Malibu (90265), Bel Air (90077) and Santa Barbara (93108).

Among the high-end sales made in Beverly Hills were a $37 million compound that comedian Ellen DeGeneres sold to Ryan Seacrest, as well as the Wehba Mansion on Sunset Boulevard that sold for $34.5 million. This is according to a Forbes analysis of the Coldwell report.

In nearby Bel Air, a total of 41 homes were listed for at least $10 million and ten of those were sold. The most notable of the Bel Air real estate deals was the Fleur de Lys mansion, which brought a cool $125 million.

Malibu was well-populated with $10 million homes as well, but sales activity hasn’t been as brisk as in Beverly Hills and Bel Air. Of the 66 listings of $10 million or more in Malibu, ten were sold including the La Villa Contenta for $54 million and Rocky Oaks Estate for $43 million.

Other communities across the United States that provide an ample supply of $10 million homes include Aspen, Colo. , Miami Beach, Fla., and the borough of Manhattan in New York City.

Forbes reported the major catalyst for the increasing activity in this end of the real estate market has been an influx of foreign buyers who want to put their money into hard assets in this country, especially in coastal cities.

“The luxury real estate market is becoming more global and interconnected than ever before,” Coldwell Bankers President Betty Graham told Forbes. The vast majority of international buyers are coming from Asia, Russia and Brazil, Graham added.