Unique Homes Blog

As much as the world of high-end real estate changes, it stays the same.

By Camilla McLaughlin

“Nothing really like it in the world,” is a phrase Shari Chase often uses in reference to Tranquility, a 210-acre estate overlooking Lake Tahoe. At $100 million, it is one of the most expensive properties for sale in the U.S. No other phrase better underscores the essence of ultimate properties.

Sally Forster Jones also understands the highest real estate price points. She is one of the brokers listing The Spelling Manor, which at $150 million is the most expensive home in the U.S. Like many who work in this very specialized niche, she compares ultimate properties to a great work of art. Even when you take everything into account, she says, value still “comes down to a property being unique and irreplaceable.”

Make the comparison between an ultimate estate with a Picasso and top agents such as Chase, CEO of Chase International Real Estate, are quick to remind: “The home can’t be stolen.”

To see the full list of America’s $20 million-plus properties, plus our directory of the most expensive home for sale in each state, CLICK HERE to view the digital edition of Ultimate Homes.

Five years ago, Ultimate Homes cracked the door on the rarified world of real estate at the very top of the market. Although significant sales got attention, no one had any idea of the scope of the part of the market the industry calls “the ultra high end.” The highest price in 2005 was $75 million for a spectacular 60-acre waterfront estate on Long Island, Three Ponds Farm. That year, the average value of a property in the top 10 was $53 million. At $150 million, the priciest property in 2010 is double that of 2005 and the average value of a top 10 home is $92.4 million.

In 2006, Donald Trump broke the $100 million ceiling with a $125 million oceanfront estate in Palm Beach. Two years later, after a price reduction to $100 million, the property sold rapidly, slightly under this price. It is still one of the most expensive home sales on record. A Montana compound listed at $155 million claimed bragging rights to “most expensive,” establishing a new threshold in 2007. Since then, $150 million has remained the benchmark for the top property.

More than prices have changed in the last five years. This year, owners seem to be following divergent paths regarding marketing. Some are reluctant to disclose prices, features or even whether or not the home is actually on the market. We’ve come across several excellent candidates for the top 10 but we found agents unwilling to confirm price or market status.

Fifteen years ago, this was a common strategy for selling high-end properties. Today, many brokers believe this approach denies a property the amount of exposure needed to connect with the very small number of potential buyers around the globe.

In the last five years, prices have changed, homes have come on and gone off the list, but what remains the same are all the characteristics that merit distinction as an Ultimate home — privacy, land, architectural significance, appointments and amenities.

The Spelling Manor sits on 5 acres of flat land, an amount that would be almost impossible to accumulate in Holmby Hills today. Hummingbird Nest Ranch is located on 123 acres adjacent to parkland, yet it’s scarcely a half hour from Los Angeles.

Oceanfront in Hawaii is a rare commodity today. Together, the three parcels that comprise the Kaiser Estate include 5.45 acres, more than 700 linear feet of oceanfront and the only private boat harbor in Oahu and the state of Hawaii. The setting is particularly prized because it is located at the foot of Koko Crater and has dramatic views of the coastline, Koko Head and Diamond Head. “You go out there and look across the ocean and see the sun setting against Diamondhead. Who would want anything more? I’ve traveled quite a bit and I have never seen anything like it in the world,” says Mary Worrall, the property’s listing agent and owner of Mary Worrall Sotheby’s International Realty.

Perhaps the most valuable and difficult asset to replicate is the experience a property offers. Tranquility is the largest privately owned piece of land in Lake Tahoe. The property has its own lake, an art studio, boat house, guest and staff residences and two over-the-water golf holes. Each room in the main house is a magical setting all its own. Still, Chase emphasizes the experience the property affords as central to its value. “When you are there, you are floating in this peaceful realm, which is what people strive for today,” she says.

Privacy and security are especially important to potential buyers, so properties in the ultra high end incorporate a huge range of activities. Bowling alleys, home theaters, discos, putting greens, trout ponds, reproductions of famous gardens, vineyards, even golf courses are not uncommon among the best of the best. But few estates offer as many ways to play as the new $100 million property in Windermere, Fla. In addition to all the amenities that are relatively standard in estates priced at more than $72 million, this home has an indoor roller rink, video arcade, children’s theater, multiple spas and a baseball field. The roller rink and baseball field are a first for an Ultimate list.

Currently under construction, the proposed home will have 90,000 square feet under one roof. “This is a home designed for a family. It is a perfect set up for someone who travels with an entourage of 12,” says Lorraine Barrett, with Coldwell Banker Residential Real Estate in Orlando, Fla., referring to the retinue of nannies and assistants who often accompany large families.

Another top 10, Porcupine Creek in Rancho Mirage, Calif. (pictured right), includes a private 18-hole golf course with an additional challenge hole. Like Hummingbird Nest Ranch, the compound includes multiple guest accommodations and is well suited for a range of potential uses, including a resort. One of the most appealing aspects of the property is that no matter what is happening on the property, the main house creates its own oasis of privacy, according to Jeff Hyland, who is listing the estate with his partner Rick Hilton at Hilton and Hyland in Beverly Hills and Tyler Morgan with Pacific Union GMAC in Palm Springs.

The amenities and special spaces such as the gift-wrapping room at The Spelling Manor garner a lot of press, but this home demonstrates the real appeal of each of the top 10. Amenities might get attention but the value and appeal derive from the artful execution of every element and the excellence of design. “It is not any one feature but all of the features together that make it so special,” says Jones, with Coldwell Banker Residential Brokerage. “Although it is grand, it still really feels like a home and the parties who come to look at it can picture themselves really living in the house. Each time I show it I find something that I just love.”

“In this market, people want the best of whatever type of property they are interested in,” says Meredyth Smith with Sotheby’s International Realty, who, with Serena Boardman, is listing what she describes as the ne plus ultra of New York, a $75 million limestone mansion on the Upper East Side. Almost twice as wide as the typical townhouse, this home has a wonderful marble stairway that sweeps up several floors and a central skylight that floods the home with light. Because it is also zoned for trophy commercial use, it would be ideal for an embassy, private bank or a high-end designer.

Another important Manhattan townhouse, priced at $72 million, rounds out our list of the “best of the best.” Painstakingly renovated, this seven-story home at 1016 Madison Avenue retains its original architectural details with a magnificent central staircase. With approximately 12,000 square feet and 22 rooms, it offers exceptional space. Like many on our list, it is adaptable to multiple uses and is equally suitable for a family or an art gallery, office space or high-profile retail.

Also unchanged is the challenge any home in the ultra high end presents. Some properties have been on our list for several years, and a few of the original top 10 haven’t sold. Extended marketing times are no surprise to experts in this niche. “When it comes to record-breaking sales, it’s usually a lengthy process. It’s not something that happens quickly because you have a limited buyer pool,” explains Joyce Rey, executive director of Coldwell Banker Previews in Beverly Hills, whose sales have established records that stood for years.

Along with Hummingbird Nest Ranch, Rey was co-listing Le Belvédère, along with Stacy Gottula, also with Coldwell Banker Residential Brokerage, for $72 million at press time. After the Ultimate issue went to print, Le Belvédère (pictured left, below) sold at a rumored price of approximately $50 million. The sale marks the most expensive home sale in the U.S. for 2010 and the most expensive home sale ever by a broker in the LA metro market.

Since the first Ultimate Homes was published, the real estate world has been on a frenetic, a roller coaster of climbs, dips, turns and twists. The Ultimate world has not been immune to the downturn. Although some properties have had price reductions, the very top of the market is surprisingly only slightly off 2008’s high. This year, the aggregate value of our top 10 is just less than $1 billion with a per property average of $92.4 million. Last year’s aggregate was just greater than $1 billion with a per property average slightly less than this year.

A number of past top 10 properties have had price reductions, including Three Ponds, the No. 1 property on our very first Ultimate list in 2005. Villa del Lago, a new Newport Coast Estate, was on our very first list at $50 million. The price was later raised to $88 million. Just recently, after a brief time off the market, it was relisted for $57 million.

This year, the sale of Bootjack Ranch outside Pagosa Springs, Colo., set a price record for 2010, $46.5 million, significantly below its original list price of $88 million. Price reductions often have as much to do with the desire of the owners as they do with the value of the property. More often they reflect a decision on the part of owners to free up liquidity and pursue other opportunities, explains Bill Fandel with Peaks Real Estate Sotheby’s International Realty, who sold Bootjack.

Today, the outlook for the very top of the market is more positive than 12 months ago. The high end is definitely on an upswing. “There are more interested buyers looking in the upper-end properties. The unique properties are getting more attention and there are significantly more sales in 2010 compared to last year,” says Jones. “The one thing these buyers want is something that is unique, that is not replaceable.”

Last year the number of billionaires in the world declined to 793. This year, according to Forbes annual list, the number is still below the high in 2008, but at 1,012, still significantly up from last year. Of this number, only 12 percent saw their fortunes decline.

Troubled financial markets globally also have the ultra wealthy looking more positively at hard assets. A good indication of this shift, say experts, is the turn out for a Christie’s art auction in May that brought in almost a quarter of a billion dollars in revenue.

“Not only are the number of wealthy in the world on the rise again, over the next two years, I believe we’ll see wealthy investors adding more real estate of all kinds to their portfolios. With the present level of uncertainty and volatility in the currency markets, many of the affluent increasingly have been moving portions of their wealth into hard assets, dollar-denominated or otherwise. Real estate is obviously likely to continue to play a large role in these asset shifts and diversification moves,” observes Laurie Moore Moore, founder and chairman of the Institute for Luxury Home Marketing.

“Everyone is looking more favorably at properties because the best lifetime investment is real estate, and many people who have made the most money have done it by investing in trophy properties,” says Rey.

On or Off the Market?

Compiling the list of the most expensive homes in America is a long process. Trophy properties come to our attention, but we occasionally don’t feel they meet the criteria for inclusion on the list. This spring we heard about a $95 million home, Villa Cappadocia, envisioned for the north end of Newport Beach. Potentially the largest home in Orange County, it will also include a vineyard and will capture spectacular Pacific sunsets. Mark Whitehead at Surf and Country has the listing. It surely will be a candidate for a future Ultimate list once construction is underway.

Another potential this year was a French chateau on South Ocean Boulevard in Palm Beach. The extensive waterfront estate is nearing completion. Online reports have suggested an $84 million price for this property.

Also offering spectacular waterfront property in Corona del Mar, Calif., is
Portabello, another in the “officially not on the market but it’s definitely for sale” category. Like the South Ocean Boulevard home, Portabello has a website that is clearly designed for marketing purposes. The Portabello site actively describes the property and includes an extensive video tour. A former top property and one of the most interesting and exciting Ultimate homes, it was priced at $75 million.

During the next 12 months, we’ll be keeping tabs on these and other potentials for Ultimate 2011.

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• Seven of our Top 10 properties remain the same as last year.

• Versailles, Porcupine Creek and the $72 million New York townhouse are new for this year’s Top 10.

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