American Ultra Luxury Homes through the ages

In the past several months, several of the top properties across the nation have been sold. Where these properties were once viewed as monstrosities, as aging dinosaurs in a time of economic stranglehold, the ownership of such estates are shifting towards a new demographic. During the industrial revolution, many families in the United States became ultra wealthy. This never before seen distribution of wealth, with the Rockefellers and Carnegies at the top, and the poor industrial working class at the bottom, led to a revolution in this country; the formalization of unions that bridged this traditionally unbridgeable chasm. As the decades passed, the various economic booms in this country brought with them new wealth, and new regulation to limit the natural distance placed between the three economic classes. When old money fades, and new money emerges, new trends in the ultra high end real estate market can be seen. The most visible trend involves servitude. Where it was once traditional to have an entire household of servants, whose families often also shared the estates grounds, now the ultra wealthy prefer privacy. Many settle for a chef, maid, nanny, and personal assistant, leaving roles such as the valet, butler, and footman to fade into obscurity. Likewise the homes have shrunk along with the estate staff. Long gone are the days of acres of property on which to hunt and fish. Most high end real estate in 2011 is tucked away in private canyons, or perched atop oceanfront cliffs. The locales have also shifted, away from the industrial core of the country, and towards the coasts. While a few Americans live in large estates (think Bill Gates) the majority of 50 million plus sales in this country involve international clientele.

The last two sales in the US involved international buyers. Russian investor Yuri Milner bought a French chateau-style mansion in Silicon Valley for $100 million. The deal is among the most expensive to have occurred for a U.S. single-family home.

The Los Altos Hills mansion runs more than 30,000 square feet and was completed around 2008. Mr. Milner, who heads Digital Sky Technologies, whose investments include Facebook Inc., Groupon Inc. and Zynga Inc., bought the mansion through a limited-liability company. The symmetrical limestone mansion with San Francisco Bay views was inspired by 18th-century French chateaux. Public records put the house at about 25,500 square feet with a 2009 completion date.

 

 

 

 

 

 

Candy Spelling may be relinquishing her title of having the most expensive listing in America — $150 million. The Manor, the home she built in 1990 with her husband TV magnate Aaron Spelling, is under contract to be sold to Petra Ecclestone, the 22-year-old daughter of Formula One magnate Bernie Ecclestone, AOL Real Estate has learned.

The 56,000 square foot home has 123 rooms, which include 14 bedrooms and 27 baths. There is also a bowling alley, 16 covered parking spaces, and several rooms devoted to gift-wrapping and storing silverware. It sits on five prime acres in Holmby Hills. Although none of the listing agents would comment, the assumption is that Ecclestone, who is to be wed in August and divides her time between Los Angeles and Great Britain, paid the asking price since Spelling has refused to blink on the price. The home had been listed on-and-off for several years, always at $150 million. AOL has learned that it was an all-cash offer and is expected to close escrow within two weeks.

 

 

 

 

 

 

 

 

Take a look at the Carnegie Mansion………is it fair to say not much has changed?

 

San Diego Foreclosure Report

Since 2008, the spectre of distressed properties has domianted the marketplace in San Diego county. Toxic loans, unsubstantied leverage, and irresponsible business practices were all equally responsible for derailing the red hot Southern California real estate market. As of April 2011, this market has suffered through three years of foreclosures and short sales. Due to our high average home values, and upper echelon cost of living, California was one of the first states to see an explosion in mortgage defau

lts. Along with Florida, Nevada, and Arizona, this state has one of the highest percentages of distressed sales as a function of total home sales. The media paints this as a dismal indicator of market strength. While it is true distressed sales often sell at lower prices than the average resale, there is a fundamental underlying truth to these numbers that 99% of market pundits are either not aware of or choose to ignore. If you take anything from this discussion, remember this phrase, “the first in will be the first out.”

 

We begin with this assumption; since the housing bubble burst, the quality of home loans issued have improved dramatically. With new regulations, and banks tightening their lending practices, high risk products like zero down and no documentation loans are no longer available to consumers. Most mortgages now are almost entirely based on “active income”, in short a regular paycheck. Five million dollars in the bank but no active income? No job? Good luck finding financing with a low interest rate. Because of these changes, it is reasonable to assume that the number of defaults and thus distressed sales will decrease dramatically.

 

This means that with mortgage defaults lowering, there is a finite amount of distressed property as a result of the downturn, available to the consumer. And what have all the media outlets been telling us? Californians have been voraciously buying up this property at a rate nearly unmatched across the country. This poses several questions; how much of these properties have we burned through, how many are left, and how do we compare to other states? And what will happen when the market runs out of these properties?

 

The numbers don’t lie, and what are starting to see is the beggining of what could be the perfect storm for the real estate market in San Diego.

 

 

 

 

While the inventory is still high, the rate at which these bad loans are turning into distressed properties is lowering dramatically. Compared to this point last year, in 2011 the number of preforeclosures in San Diego County has dropped 23%. The number of defaulted properties scheduled for sale is down 26%. Take a look at the statistics for North Park and Kensington below, they reflect these regional and national trends.

 

 

 

 

 

 

Statewide, numbers this low haven’t been seen since late 2008, when the federal government first stepped in and began regulating how banks were dealing with loan defaults. “The drop in filings, and the rise in cancellations, is surprising,” says Sean O’Toole, CEO and Founder of ForeclosureRadar.com. “Banks have had time to resolve robo-signing issues, so we should be seeing exactly the opposite results, with lenders starting to catch up from recent delays.”

So what does this all mean? There are only several possibilities, any of which should be welcoming news to current and potential homewoners. The first is that in California, and other “foreclosure states,” the majority of toxic loans have been dealt with, and the majority of distressed properties sold to either the banks or third party cash investors. As these properties become no longer available, buyers will have to rely on the traditional equity resale inventory, which currently carries a much higher average sale price. This will set favorable new comparables, which should resonate throughout the market.

The second possibility is that the banks are anticipating the thinning inventory of distressed properties, and are chosing not to sell the current inventory at reduced prices to third party investors, and to delay foreclosure on the remaining homeowners in default. If the number of distressed properties available drops dramatically, banks would be in a prime position to ride the wave of rising home values, strategically releasing foreclosed properties to the market in a controlled fashion. One would likely see this trend in a market by market analysis, in that compared to last year, a desireable neighborhood like North Park saw a 25% increase in properties going back to the bank, even while the number of properties scheduled for sale decreased 41%! Statewide in 2011, the number of properties that went back to the bank has dropped nearly 17% when compared to last year, suggesting that the distressed inventory is beginnig to dwindle, and that banks are holding onto property in desireable areas, in anticipation of the flood of defaults being reduced to a trickle.

 

In either instance, releasing a motherload of bank owned “shadow inventory” to the market, at a time when home values are primed to rise, makes little sense. Downtown San Diego for the first time in nearly three years experienced more equity resales in the first quarter than either short sales or bank owned deals. As Californians, having been the first to get into this mess, could we be the first ones to emerge? The numbers below show that along with Arizona and Nevada, we may be on the right track.

 

State Notice of Default Notice of Sale Back to Bank Sold to Third Party
Arizona n/a -27.9% -22.2% -15.4%
California -25.8% -10.9% -17.2% -15.8%
Nevada -17.8% -23.7% -2.7% +6.9%
Oregon +236.3% +12.5% -14.8% +38.7%
Washington n/a -12.1% +38.7% +40.5%

 

 

 

San Diego’s finest luxury Contemporary homes

Today we will take a look at some of the most spectacular luxury contemporary homes sold in San Diego county in 2010. Despite conditions conducive to such architecture (oceanside cliffs, dry desert like conditions), it is rare to see truly modern architecture in this city. Perhaps it stems from interpreted desirability…it takes a rare person who appreciates clean lines and simplicity over creature comforts like carpet, wood paneling, and low ceilings. If one is to spend 5 million plus on a property, it would be wise to ensure there is a large enough pool of buyers for resale. That said, some individuals are bold enough to build their dream, and I thank them for it, because some of these homes will take your breath away.

963 Klish Way in Del Mar is a 4 bedroom 6 bath 6,000 square foot home with an ocean view framed by mature trees. This property sold for 5.3 million dollars last year, 88% of the original list price, and took over a year to sell. Chiseled into the sandstone bluffs, the home features floor to ceiling windows, and some of the finest finishes.

 

 

 

 

 

 

 

 

 

5416 Candlelight Drive, located in the mesa area of La Jolla, sold in 2010 for 6.2 million dollars, or 91% of list price. The 5 bedroom, 7 bath, 6400 square foot home sits atop all of La Jolla, with ocean and beach views to the south. The design of this property meshes perfectly with the somewhat desolate natural landscape, that features succulents and numerous mature palm trees. The home is completely hard wired with the latest in automation control systems, and won the prestigious Integration Award for Brilliant Lighting from Crestron in 2005. A rare 5 car garage rounds out this spectacular example of contemporary luxury.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6106 Camino de La Costa sold in 2010 for 8.0 million dollars in 2010, 64% of the original list price. 4 bedrooms, 3 baths, 6100 square feet. This property exemplifies the pros and cons of contemporary construction. Although beautiful, this residence is clearly very buyer specific, in that the design and decor is anything but traditional. That said, remember this residence was built in 1993! Contemporary architecture is timeless, and combined with quality building materials like copper, teak, and concrete, as seen in this home, a 30 even 40 year old home can look close to brand new when it comes time for resale.

 

 

 

 

 

 

 

 

 

 

 

As you can see, there are but a few spectacular contemporary luxury homes sold in San Diego each year. The finest examples demand top dollar. If you are curious to see the best current luxury contemporary active listings, send me an email and I will get you the report. Willis Allen Real Estate represented 33% of the parties involved in these transactions.

 

Osama Bin Laden’s Compound

So after perusing the various news sites, I came across a statement that the lavish “mansion” where bin Laden spent his last few hours was eight times larger than the surrounding homes, and valued at $1,000,000. It seems like you just don’t get much for a million in Pakistan these days. Review the photos below, and tell me where you would rather live? San Diego doesn’t seem like such a bad deal.

Resort town in Pakistan….$1,000,000
Resort town in San Diego…$900,000

San Diego Luxury Real Estate statistics for sales higher than 8 million…

The numbers at this price point can be a bit confusing, in that there are so few sales each year. Many months there are no sales or pending purchases, Nonetheless, some of this information is valuable. Active listings are down 28% from March of last year, and 20% compared to the first quarter of last year. Average days on market has increased 86% compared to last March, and sales price as a percentage of asking price has decreased 10% to 70%, compared to last year. This means that for a 16 million dollar listing, opening offers of 9.6 million are expected, with a final negotiated price around 11.2 million. Sellers should list in the early months, January till May, while buyers should look to purchase in June, July, or August, taking advantage of the increased inventory. Looking ahead, sellers in this price point should list their property aggressively for a quick sale, then move those assets to a lower section of the market say 2-3 or 3-5 million that have much stronger outlooks for the next 18 months. Buyers in the 8 million plus range should be looking for a unique property, with views, perhaps of contemporary construction (more rare in San Diego), and plan to hold onto the property for a long period. As seen in these charts, it is not easy to liquidate such assets.

Coronado Bridge Lighting Proposals Review

Although funding seems to be scarce for such a project, several proposals have been submitted to the Port of San Diego.

KAHN Bridge Lighting Concept from Port of San Diego on Vimeo.

“A brilliant shimmer” I don’t believe the Navy or Port would get behind a project that involves thousands of moving mirrors, each potentially blinding to a pilot or ship’s captain. The sculpture also detracts from the natural arch of the support structure. This project seems to be too ambitious….way to expensive building a bunch of wind turbines in an area not known for high sustained winds. This project screams “unrealistic artist”, why deal with any practical realities when you can just suggest something remotely plausible? Fail.

FINK Bridge Lighting Concept from Port of San Diego on Vimeo.

This entire presentation is so atrocious I don’t even know what to say. Incredibly poor 3d cad work. Zero practical explanation how the system will work. Hmmmmm depending on wing turbines? for 70 kw of electricity? Doesn’t the designer know there is little to no wind at night in these locations? This is embarrassing and I hope the Port Commission is wise enough to throw this out. I kid you not when I say this would have earned an F grade in my college engineering design class.

BIDEAU Bridge Lighting Concept from Port of San Diego on Vimeo.

Now we’re cooking. This presentation is nothing short of spectacular (well besides the loose use of the phrase “Latino shore”, I guess some things are lost in translation). Someone clearly has studied engineering, and has mastered the use of both ProE and 3D Studio Max . BIDEAU presents both an iconic design, as well as a practical system, rooted in established systems designed and constructed in the USA, to make its cause. This would look incredible from the shoreline of both Coronado and the Embarcadero, as well as the high rises downtown. If/when/how the funding ever becomes available for this project, I would love to see this plan implemented. Clearly if they are good enough to light the Eiffel tower, they are good enough for our currently generic looking monstrosity from the sixties.

San Diego Luxury Real Estate statistics between $5,000,000 and $8,000,000

This post takes a look at the San Diego Luxury Real Estate market between $5,000,000 and $8,000,000. The number of active listings in March 2011 in this price range fell 26.7% compared to March of last year. The number of sales fell 66%. The number of pending transactions fell 33%. These are not strong numbers for this segment of the market. The average days on market for sold properties in March of 2011 was an incredibly low 17 days. Because the sample size is so small at this price point, it is obvious the seller of the property sold in March listed the property at a very aggressive price, and sold at 75% of asking price. The average sold price per percentage of list price was 78% for the first quarter 2011. This means that for a seller of 7.5 million dollar property, fair initial offers around 5.07 million are to be expected, with a final negotiated sales price of 6.04 million. Sellers should list Jan-March, or December, to take advantage of historically low months of inventory. Buyers should be looking in May, July, and August, when months of inventory are historically high.

San Diego Luxury Real Estate statistics…$3,000,000 to $5,000,000.

This post looks at the San Diego luxury real estate market between 3 and 5 million dollars. Compared to March of last year, the number of active listings is down 22%. There was a 120% increase in sales for March in 2011, compared to 2010. It is nothing short of spectacular to see the number of sales double at such an elite price point. There was only 1 additional pended sale in March this year, meaning I am not as bullish on this market for future months, as say the 2-3 million dollar price point. Still, this shows big money is back and is reinvesting in some of the areas finest homes. Compared to March of last year, the average days on market for sold homes is down 27.4%. The average sales price as a percentage of list price increased an absurd and unheard of 21.7%, from 69% to 84%. this means that for a 4.6 million dollar listing, the seller should see fair opening offers of 3.4 million, with a final potential negotiated sales price of 3.86 million. Again these numbers are dictated by the current market and are averages, outstanding properties represented by outstanding agents will beat these numbers handily. Months of inventory is down 65% for the month and 53% for the quarter, compared to last year. In this price range, we saw 51 months of inventory in March of 2010, an absolute death sentence for this price range. March of 2011 we were down to 18 months, not an outstanding but certainly a reasonable number for high priced properties.

San Diego Luxury Real Estate market statisitcs…2-3 million dollars

This post will examine the luxury real estate market in San Diego between two and three million dollars. Compared to March of last year, the number of active listings is down ~5% for March 2011. Sales in this price range have increased however by an outstanding 47%! The number of pending sales is also up 33%, which is a great indicator of what the summer months will bring to this market. Compared to the same quarter last year, sales are up 28.6 percent, and pending transactions up 35%. Look for these numbers to continue to increase over the next two months….this market is heating up. Compared to March of last year, the average days on market has increased by 4 days, no doubt due to competition and value brought forth at the lower price points. List price as a percentage of sales price increased by 1% to 85%. When looking at the same quarter last year (1st quarter) the average property is selling 1 day quicker in 2011, and 1% higher at 84% of list price. This means that a seller of a 3.8 million dollar property in 2011 should see fair opening bids at 2.8 million, with a final negotiated sales price around 3.192 million. Again, these are average numbers that the current market dictates, outstanding property represented by outstanding agents will beat these numbers handily. Months of inventory is down 35%, a strong improvement. Although we are still looking at over a year worth of inventory, this is a dramatic improvement over the 20+ months we were seeing last year. Looking at the same quarter in 2010, the months of inventory is down to 21%, also a very strong indicator. Sellers at this price point should have their property on the market right now, or put it on September to December, when property is moving faster. The average market time for sales in May of 2010 was only 26 days! If you have an outstanding property, and can afford to price it at market value or below, you could catch a recurring trend again this year and sell in well less than a month! Buyers should be looking in May or August when historical trends show months of inventory being highest, and thus the best times for negotiation.

San Diego Luxury Real Estate statistics….$1,500,000 to $2,000,000

Here are the stats for homes in San Diego County, 1.5 to 2 million dollars. compared to a year ago, this March new listing were down close to 14%. The number of sales were up 4% (this number is skewed because of the small sample size…only 1 more sale in March 2011 vs March 2010. Compared to a year ago, the number of listings are down this quarter ~7% while sales increased 5.6%. This quarter, sales prices are on average 86.6% of list price. This number is basically unchanged from the previous year. Say you have a 1.9 million dollar listing…the market dictates a fair opening offer of 76-81% of list price (for this specific property, say 1.44 million dollars.) final negotiated price would be around 1.64 million dollars. While there will be exceptions with any property (a good home and a great agent will beat these numbers) this is what the current market dictates. Months of inventory is down 17% when compared to March of 2010…this is a very healthy sign for the market at this price point. When compared to last quarter, this quarter is down ~12%. If you are a seller, you had better list your home March-May or October-December, when property is being sold at an accelerated rate. Buyers should be looking January, February, and August, when the sale rate is stagnated and thus greater negotiating leverage can be used.