Defining the luxury real estate market isn't simple. From Boston to Miami to Los Angeles, the word luxury has a different definition. In some areas, luxury is defined as anything over a million dollars. In pricey parts of Los Angeles single family homes often are listed at $5 million and above.
The numbers of sales in 2017 and 2018 YTD in the $5 million and $10 million and above range in Los Angeles County are interesting. Executive Director of Research, Erin Kennelly, at The Agency, the Beverly Hills-based luxury real estate brokerage firm with 20 offices in the U.S, and Mexico crunched the numbers from the MLS and public records.
In 2017, 127 single-family homes sold above $10 million. That number jumped to 551 in the $5 million to $10 million range. Condominium sales above $5 million were at 19 and dipped to 5 in the $10 million plus slot. Those condo numbers are small because of less inventory than single-family homes with those hefty price tags.
Looking at this year through September 27, a total of 438 single-family homes over $5 million and 93 over $10 million sold. There were 21 condo sales above $5 million only 3 over $10 million.
Santiago Arana, managing partner at The Agency specializes in high-end residential sales and new construction in Beverly Hills, Bel Air, Holmby Hills, Pacific Palisades, Santa Monica, and Malibu. Here are his insights into luxury in Los Angeles where a Mediterranean estate above Beverly Hills is listed for $129,000,000. "I think you still get more for your money in a Los Angeles property than in London or New York. Then you have the great weather and the lifestyle which appeals to these luxury buyers," observes Arana one of the country's top-ranked real estate agents. "Homes here have cutting-edge architecture, design, and technology. They include home theaters with top video and sound, gyms with massage areas and spas and cigar rooms with circulating fresh air."
The Miami area including Miami Beach and Coral Gables raises luxury to new heights. Ron Shuffield, president of EWM Realty International, a Berkshire Hathaway Affiliate has sold luxury real estate in South Florida for over 30 years. "As a market, we have our highs and lows. Our peak year was 2015, especially in the luxury segment. Then in 2016 and 2017 our sales fell off an average of 23%. This year we are coming back."
Shuffield's MLS data shows in 2017 Miami-Dade County had 28 single-family home sales between $5 million and $9.9 million. Only 12 homes were sold above $10 million last year. The numbers below prove Shuffield is right that 2018 is a stronger year for luxury sales. Between January 1 to August 31, 35 homes sold above $5 million. Moving up to the $10 million and above number, it came in at 16, already higher than 2017's total.
Boston's luxury market has its own distinctive features. A townhome on a desirable Beacon Hill street with cobblestones and gas lamps just went off the market. It was listed at $8,995,000 with 14 rooms and an interior motor court with herringbone brick and marble flooring. Brian Dougherty, managing partner of Robert Paul Properties, an affiliate of Luxury Portfolio International describes it this way. "Historically, wealthy Bostonians are low key about their money and real estate. On Beacon Hill, you have homes that have been in families for generations. The last sale on Louisburg Square, two doors down from former Secretary of State John Kerry went for just under $12 million. It had belonged to the same family for decades and needed a total gut renovation."
Not all luxury markets are equal. Some fare better during the downturns while others take a major hit. Talk of luxury markets beginning a down cycle is whispered about in the industry right now. Listen carefully and you just might get a deal.
Defining The Luxury Market From The Inside curated from Forbes - Real Estate
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