The U.S. luxury home market is being driven to new heights by relatively low prices, low interest rates and a more stable economy than in many countries, experts say.
California had 697 home sales of at least $5 million last year, an all-time high. Where luxury prices end up has yet to play out, but the Multiple Listing Service recently experienced a new high with the offering of a $190 million estate in Greenwich, Conn.
Buyer interest is recovering quickly, said Kofi Nartey of the Agency in Beverly Hills, Calif., who was part of a panel of real estate agents speaking at the recent National Association of Real Estate Editors conference in Atlanta.
“We get a lot of immediate gratification and bounce back,” Nartey said.
Among those buying are people in the sports world, whose accountants are suggesting they get into real estate, Nartey said.
On the East Coast, baby boomers are buying luxury second homes as a reward for a lifetime of hard work, said Jack Cotton of Cotton Real Estate.
“A property on Cape Cod may function as a magnet for bringing family back together,” Cotton said.
Younger people are buying second homes for aspirational reasons, Cotton said. “They want to grow into the person who would have a beautiful property like this.”
International buyers in Cotton’s market are looking for homes with a tale to tell or an architect of note. A portrait of the original owner’s wife in a house built in 1880 has hung to the left of the fireplace since the house was constructed. “That kind of story would appeal to an international buyer,” he said.
Luxury housing agents around the nation are reaching out to international buyers. Even though they make up only about 5 percent of the Atlanta market, David Boehmig of Atlanta Fine Homes said he is planning on traveling to Hong Kong to take part in a real estate show. “It’s an expensive proposition,” he acknowledged.
Some brokers are working in conjunction with art sales in far-flung locales in Asia. Attendees have to pass displays of luxury properties on their way to the show.
Bus tours for potential international buyers have been taking place in the Los Angeles market for the past several years.
West Coast buyers in the $20 million price range are looking for a “wow” factor, Nartey said. One house being built in Beverly Hills will be surrounded by a moat.
“I definitely think we will see a $250 million listing,” he said. “Price at that level is just a suggestion.”
Just having the highest price in a market will have people lining up, Nartey said, and quickly reach the top-tier buyers.
“Some of the numbers are justifiable and some are slightly arbitrary,” he said. His office is marketing the home of a sports star for whom the number 25 is significant, he said. “So we listed it at $25 million.”