A Costly Collage
Each year, Ultimate Homes paints a picture of the most expensive homes in America. Not only does it highlight what it takes to be listed in the top 10, but it is also a barometer signaling potential changes.By Camilla McLaughlin
Sui Generis is the phrase some economists use to characterize luxury real estate at the highest price points. Nothing could be more fitting — sui generis means “unique” or “of its own kind.” Not only are the dynamics of the market for estates valued at $20 million and up quite different from real estate overall, but the properties themselves literally create a separate world.
A home more than anything reflects an individual’s persona. “It tells people who they are and makes a statement about the owner,” says John Brian Losh, CEO of LuxuryRealEstate.com and owner of Seattle brokerage Ewing & Clark.
Until not too long ago, the most that was known about this sheltered group came from anecdotes from real estate agents and reports on a few notable sales. There was little hard data and no one really had any idea of the scope of the part of the market the industry calls “the ultra high end” until Ultimate Homes cracked open the door in 2005 by compiling a list of the 850 of the most expensive homes in America. Nationally, it was unchartered territory, so much so that when research began no one was really sure at what price to start.
Although the prices of Ultimate’s top 10 are down this year, they are only slightly off 2008’s record high and still significantly higher than earlier years. At $150 million, the most expensive home on the market in 2009 is double the value of the highest priced property in 2005, which was Three Ponds Farm, then priced at $75 million. Today, four properties priced at $75 million capture the last spot on Ultimate’s best of the best.
In 2006, Donald Trump’s $125 million Palm Beach estate broke the $100 million threshold. Every list since has included a number of properties priced at $100 and above. Shortly before last year’s Ultimate Homes was published, the Trump property was reduced to $100 million. It soon sold to a Russian billionaire and reportedly was slated to be torn down. Also sold after publication last year was the No. 10 property, movie producer Sidney Kimmel’s elegant Contemporary with sweeping ocean vistas on 5 oceanfront acres in Palm Beach priced at $81.5 million.
Prices may change, and homes that are in the top 10 one year may fall to a lower position, but all the features that make a property valuable enough to qualify for Ultimate’s “best of the best” do not. “What buyers want hasn’t changed a great deal over the years. Privacy, land, architectural significance — that was true 20 years ago and it is true today,” observes Joyce Rey, who heads the Estates Division for Coldwell Banker Previews International in Los Angeles. Rey knows a bit about breaking price records herself, having sold some of the most significant properties in Los Angeles, some of them on multiple occasions, often setting a new benchmark each time.
Every property that has ever been included in Ultimate’s top 10 is outstanding, and this year is no exception. Some are legendary, such as the Honolulu estate built by Henry J. Kaiser in the late 1950s or Dunellen Hall in Greenwich, but it takes more than a storied history to merit a price high enough to rank among the top. Nestled on the slopes of Koko Crater, the $80 million Kaiser Estate occupies 5.5 acres of prized oceanfront and includes a private boat harbor; a 12,000-square-foot, three-story boathouse; and a 15,000-square-foot main house.
Fleur de Lys in Holmby Hills, Calif., was recognized by Jacques Chirac and the French government for its contribution to French culture in America. Being honored as the finest example of French architecture in the U.S. creates an instant legacy. A lot of research and study went into the replication of details from the 18th century, observes Robert Kass with Hilton & Hyland Real Estate, who is listing the home with Rey.
With more than 53,000 square feet, The Manor (pictured at left), the Holmby Hills estate built by Candy and Aaron Spelling, is the largest private residence in Los Angeles and quite possibly one of the grandest in the country. At $150 million, it is this year’s most expensive, and, like most on the list, it would be almost impossible to replicate today. Jeff Hyland, who is co-listing the property with his partner, Rick Hilton, at Hilton & Hyland/Christie’s Great Estates, and with Sally Forster Jones with Coldwell Banker Residential Brokerage, estimates that construction alone would take at least five years, and assembling 4.76 buildable acres between Beverly Hills and Bel Air would in itself be almost out of the question.
Location is always key to value in every price bracket. Ultimate properties occupy some of the most desirable real estate in the country, whether it is 5 acres in Holmby Hills, a sought-after address on Manhattan’s Upper East Side or 210 acres of pine and aspen forest in Lake Tahoe. Anything on the water is always prized. A $76 million property in Del Mar, Calif., occupies 5.5 private acres on a bluff overlooking the Pacific and one of the most coveted strips of beachfront in the country, where even a sliver of land fetches top dollar, according to listing agent Brian Guiltinan of Prudential California Realty.
Amenities capture a lot of media attention, and to the uninitiated they may seem over the top. Yet, bowling alleys, private lakes, helipads, screening rooms and salons suitable for large-scale entertaining are as much a part of the lifestyle these properties afford as multiple kitchens and master suites with dual offices, dressing rooms and baths. Le Belvédère (pictured at right) might have a 5,000-bottle wine cellar and a screening room that seats 60, but what sets this home apart is the attention to detail that makes every room exquisite and has local brokers raving about the property. It also underscores the real appeal of each top 10 property, which comes not from an assemblage of amenities, but from the artful execution of every facet.
What makes The Manor so exceptional, according to Hyland, is the excellence of the design and the overall flow of the home. “These are big rooms, as you can imagine, but you never feel that you are in a baronial palace because the scale is done so well from room to room. You don’t feel like you’re dwarfed in a cavernous environment. All the rooms are in the right place and it lends itself to small-scale entertaining and large-scale entertaining,” he elaborates.
“It’s not just about bricks and mortar,” interjects Shari Chase, founder and CEO of Chase International in Lake Tahoe, Nev., illustrating her point with Tranquility, which is the largest private landholding in Lake Tahoe. In addition to a gorgeous main residence, Tranquility (listed for $100 million and pictured at left) includes a private lake stocked with trout, guest and staff residences, an art studio, two over-the-water par-three golf holes and a boathouse pavilion. Still, Chase says, one of the most exceptional aspects is the sense of balance and peace. “When you are there, you are floating in this peaceful realm, which is what people strive for today,” she explains.
In addition to an almost unobtainable location, which in itself creates long-term value, Paul Boomsma, president of the Luxury Portfolio Fine Property Collection for the Leading Real Estate Companies of the World, says Tranquility “has everything a lot of people are looking for” in a property of that magnitude — authentic architecture, a magnificent home and a huge range of activities.
“What we are seeing in this market is that people want the best of whatever type of property they are interested in,” says Meredyth Smith, who, with Serena Boardman, is listing a $75 million townhouse in Manhattan for Sotheby’s International Realty, a property she describes as the ne plus ultra of New York. “For New York City, the width of a townhouse is often one of the key criteria for which luxury high-end buyers look. This house is 45 feet wide, which makes it one of the widest townhouses in the city,” she says, noting that the typical townhouse is 20 to 25 feet wide. Highlights of this property include a wonderful marble stairway that sweeps up several floors as well as a huge skylight that allows light to pour down into the central core of the house.
Many of Ultimate’s top properties have multiple uses, which, of course, add value. The Manhattan townhouse is also zoned for trophy commercial use, making it ideal for an embassy, private bank or high-end retail. In addition to a spectacular Mission Revival mansion, six guesthouses and 10 staff houses, Hummingbird Nest Ranch is a premier equestrian facility with an International Grand Prix field, a rubber and sand mixed ring, a derby grass field as well as multiple barns, a farrier’s workshop and quarters, and even a helipad. The Kaiser Estate is offered as a single $80 million property or as three separate parcels.
Typically, when prices are computed in the tens and hundreds of millions, the potential days on the market are counted in years rather than months. It is not uncommon for properties to stay on the market for several years. Some from Ultimate’s first list in 2005 are still for sale. A record-breaking sale is usually a lengthy process because you have a limited pool of buyers, observes Rey. Also, she points out, these properties often come and go on the market, and in pre-computer days there was no way to accurately track how long they were for sale. Plus, unlike most sellers, owners of these homes have the luxury of waiting for the right price, since they typically are not compelled to sell.
Still, after a long winter of hibernation with even the wealthiest buyers waiting on the sidelines, the ultra high end is beginning to show signs of new life. “The last seven months have been sleepy, but all of a sudden we are seeing some activity,” says John McMonigle of The McMonigle Group with Coldwell Banker Residential Brokerage in Newport Beach, Calif. Along with activity come reports of offers and potential sales even among the highest price points.
This is no surprise to Michael Good, president of Sotheby’s International Realty, who says there will be a point during the course of this year where people who have the financial wherewithal and cash will come out of the woodwork to take advantage of what they see as great long-term investments in real estate. Kay Coughlin, president and CEO of Christie’s Great Estates, is thinking along the same lines. “I believe people will look back on 2009 and regret not buying real estate,” Coughlin says.
“Trophy purchases are all about a flamboyant lifestyle,” says Laurie Moore-Moore, founder of The Institute for Luxury Home Marketing. “Trophy purchases have slowed. However, when the world economy recovers, pent-up demand will explode and uber-affluent buyers will be back.”