Luxury Real Estate

By Robert Lockard

Every year, Ultimate Homes magazine lists the top 1,000 most-expensive homes in the United States, and in the recent issue the competition between the different luxury-broker networks isn’t even close. LuxuryRealEstate.com has more than twice the number of luxury properties on the list as the closest network. Check it out:

ULTIMATE NETWORKS / ORGANIZATIONS
HERE’S HOW POPULAR FRANCHISE/AFFILIATE COMPANIES AND MEMBERSHIP ORGANIZATIONS STACKED UP THIS YEAR:

Who’s Who in Luxury Real Estate (LuxuryRealEstate.com) . . . . 420
Sotheby’s International Realty . . . . . . . . . . 205
Leading Real Estate Companies of the World (Luxury Portfolio) . . . 173
Christie’s Great Estates . . . . . . . . . . . . . 130
Coldwell Banker (Previews International) . . . . . . . . . . 113
Prudential Real Estate . . . . . . . . . . . . . . . 83
The Institute for Luxury Home Marketing . . . . . . . . . . . 27

Prudential Douglas Elliman Real Estate, Brown Harris Stevens, Premier Estate Properties, Inc., Slifer Smith & Frampton, Alain Pinel Realtors and Frank Hardy, Inc. Realtors represent properties on this list of high-end properties. I guess www.luxuryrealestate.com is the most-viewed luxury real estate website in the world for a good reason. How wonderful!


Editor’s Note:
Robert Lockard is the Public Relations & Media Specialist with LuxuryRealEstate.com. I am Robert. I create all of LuxuryRealEstate.com’s newsletters, write the editorials in LuxuryRealEstate.com Magazine and much more. This is very exciting news because it shows that LuxuryRealEstate.com is definitely the top luxury real estate network. By the way, you can read a news release on this story here.

By Sam Smith

As reported in Newsweek Magazine: There isn’t much positive news in the housing sector. Largely as a result of the subprime mortgage mess, the number of homes that slipped into foreclosure proceedings in 2007 jumped 70 percent from the previous year, according to RealtyTrac. The National Association of Home Builders recently announced that new-home sales dropped 29 percent in 2007, the industry’s biggest drop in four decades. In addition to those troubling stats, there are the ever-increasing costs of energy and recession worries to be concerned with.

So why are ultra-high-end home prices still rising, with some prices reaching up to an astronomical $175 million? It’s a simple matter of supply and demand, say brokers from hot markets like Manhattan, the Hamptons, Palm Beach and both ends of California. While there’s a national glut of McMansions in the $500,000-and-up range, there’s a shortage of trophy properties on the market and an increasing number of wealthy foreign buyers from Asia and Europe looking to capitalize on the weak U.S. dollar.

Those struggling to pay their monthly mortgage or buy a first home may be envious or appalled, but according to market data from DataQuick, sales for homes costing $5 million and above climbed 31 percent in the first quarter of 2007 compared to the same quarter in 2006. Sales of Manhattan apartments costing $10 million or more tripled in 2007, according to the real-estate company Prudential Douglas Elliman. How rich are these buyers? The brokers NEWSWEEK spoke to say many of their high-end sales represent the purchase of a second, third or fourth home.

"The rich are even richer than ever before and the very wealthy are pouring more money into residential real estate," says Laurie Moore-Moore, the founder of the Dallas-based Institute for Luxury Home Marketing, a membership and training group for luxury-real-estate agents. While Europeans have always invested in American properties, Moore-Moore says new buyers are increasingly from Brazil, Russia, India and China.

Shlomi Reuveni, executive vice president and senior managing director of Manhattan-based Brown Harris Stevens Select (an affiliate of Christie’s Great Estates) says that the dollar exchange is turning New York into a residential playground for the internationally wealthy. "Affluent clientele are not about price," Reuveni says. "With the highest caliber properties, supply is limited, and cost is not something that determines their purchase."

It helps that there are more wealthy people in the world than ever before. According to Merrill Lynch’s World Wealth report published in June 2007, the number of "ultra-high net worth" individuals – those with $30 million or more – increased by 11.3 percent. Also, there are now 9.5 million millionaires worldwide, an 8.3-percent jump from the previous report issued in June 2006.

Of course, the United States has plenty of homegrown would-be real-estate barons with millions to spend. In the midst of the housing crisis, the credit crunch and the softening dollar, hedge-fund manager Louis Moore Bacon bought the 171,000-acre Trinchera Ranch in Colorado from the Forbes family for $175 million, shattering a the previous record set by the $103 million sale of a Hamptons estate earlier in 2007. Bacon, who founded Moore Capital Management, has an estimated net worth of $1.7 billion. He spent more than $1,000 per acre on the ranch, which Malcolm Forbes bought in 1969 for just $50 an acre.

Farther out West, the market is also quite strong, says Avram Goldman, the San Francisco-based CEO and president of Pacific Union GMAC Real Estate. His clients made their fortunes in Silicon Valley’s high-tech and biotech industries, while others are East Coast residents looking for second homes. "There’s a lot of wealth in the Bay Area, and not enough inventory," says Goldman, whose highest-priced listing is a seven-bedroom home in San Francisco’s Pacific Heights neighborhood listed at $55 million. His bread and butter, however, is slightly less pricey. In the fourth quarter of 2007, he sold 33 residences for more than $3 million each, almost double the number for the same quarter in 2006.

How long can the high-end market sustain itself? "I think we’ll see more caution on the part of the wealthy in all of their investments," says Moore-Moore. "The top of the market will stay strong, but luxury consumers will look long and hard at value." For the superrich, however, value is a relative term.


Editor’s Note:
This blog entry is from the Beach Cities Luxury Homes Blog. Sam Smith is the President and CEO of Beach Cities Luxury Homes. He is also a member of LuxuryRealEstate.com, as well as a talented blogger. There are many positive things to talk about in the current market, and it’s nice to hear all of these impressive statistics in one blog entry. We welcome your additions to the LuxuryRealEstate.com Blog, if you would like to share your important news and views.