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$100 million homes sales hit record

By dailymail / Published on Saturday, 10 Jun 2017 21:53 PM / No Comments

Sales of $100 million homes hit a record last year, although a growing number are piling up unsold in 2017, according to a new report.

There were 10 homes sold last year for $100 million or more, according to new report from Christie’s International Real Estate. That was twice the previous record of five sales in 2014. The total value of nine-figure homes sold last year topped $1.4 billion.

Granted $100 million homes represent a small market that can move on just a handful of deals. Yet Christie’s International Real Estate CEO Dan Conn said prices for super-homes are simply catching up to soaring values in other parts of the wealthy economy — from $300 million yachts to $100 million Picasso paintings.

There were 34 sales last year of homes priced at $50 million or more, nearly twice the previous year, according to the report.

“I think homes are just catching up with the rest of the luxury world,” Conn said. “These homes are stores of value and they have proven over time to have a positive return without the kinds of volatility you get in equity markets.”

Half of the 10 homes that sold last year for nine figures were in Hong Kong, which has become a favorite location for wealthy Chinese. The most expensive was a single-family home on Gough Hill Road on The Peak in Hong Kong that sold for $270 million. A home in Suzhou in China was second, at $150 million, while a home in Hong Kong’s Stanley area ranked third at $131 million.

There were three nine-figure properties that sold last year in the U.S. The Lily Pond Estate in East Hampton, New York, sold for $110 million, while two properties in the affluent western Los Angeles neighborhood Holmby Hills hit the nine-figure mark. The first was The Playboy Mansion, which sold for $105 million, and the second was a newly built home, called “Mon Reve,” that went for $100 million.

Yet more and more $100 million homes are piling up unsold. There are now 34 homes publicly listed for $100 million or more around the world, compared with 19 last year. If you count homes that are “pocket listings,” or not officially on the market but are being quietly shopped around, the number grows to around 50 or more, Conn said.

Discounts are also growing at the very top. The average discount for homes priced at $30 million was 18 percent in 2015, but rose to 25 percent last year, according to the report.

So far this year, only two homes have sold for $100 million or more. An apartment building on The Peak in Hong Kong was sold for $360.6 million. The owner plans to tear down the building to build a single-family home — so it’s not only one of the most expensive homes ever sold, but it’s believed to be the most expensive tear-down ever sold. The second home that sold for nine figures was also on The Peak — a $139 million single-family home.

Conn said that while this year could revert closer to the mean of nine-figure home sales — at four or five a year — he said the super-home market still has room to grow.

The total value of the 34 super-homes on the market is $6.36 billion That’s less than one-tenth of 1 percent of the total wealth of the world’s billionaires, he said.

“You could argue that they are underallocated in terms of homes,” he said.

A growing number of the $100 million listings are spec homes, or newly built homes built on “speculation” by a builder to sell. The two most expensive are a $500 million home being built by Nile Niami in Bel Air, California, and a $250 million Bel Air mansion that’s finished and is being sold by fashion tycoon Bruce Makowsky.

Conn said he expects a home will eventually sell for $1 billion – but it’s unclear how long that will take.

There is already one on the market — Villa Leopolda (also known as Villa Les Cedres) in Saint-Jean-Cap-Ferrat, France, that was once the home to Belgium’s King Leopold II. The property has 35 acres of manicured grounds overlooking the ocean, and is on the market for $1.1 billion.