Superluxury Properties Break Records
Call it pandemic purchasing or a change in priorities for high-end homeowners, but the US$30-million-plus home sale is a trend that shows no signs of slowing.
“The gains from the stock market have been so strong over the past decade,” says Jessica Canning, agent and luxury specialist, Sotheby’s International Realty–Carmel Rancho Brokerage. “Plus, a lot of people are evaluating what they want to do with their lives and how they want to spend what they’ve earned. Many are focusing on spending quality time in places that make them happy.”
Here, three agents share more about their US$30 million deals and what homeowners are looking for in high-end properties in these markets
PEBBLE BEACH, CALIFORNIA: ALL ABOUT THE VIEW
With only 26 oceanfront properties and 52 golf-front properties in the exclusive coastal community of Pebble Beach, that dynamic of fixed supply and increased demand (the ratio of buyers to sellers is currently 10 to 1) has been on full display in the US$30 million second-home market in this area, known for its gorgeous coastline and renowned golf courses.
In July 2021, a 10,000-square-foot residence with views of the Pebble Beach Golf Links and Carmel Beach sold for $32.7 million in a deal brokered by Sotheby’s International Realty - Carmel Rancho Brokerage. A record for California’s Monterey County.
During the dot-com boom 20 years ago, homes were selling in the US$20 million–to–US$22 million price range. Now, that price has been elevated to over US$30 million.
“With 30% of our buyers coming from the Bay Area, we tend to dovetail with what’s happening in that market,” Canning says of Silicon Valley, which is two hours away by car.
The biggest driver of value—and therefore price—of any home north of US$10 million is a house featuring a big kitchen and extensive square footage both inside and out, Canning says.
“Ultimately, buyers are seeking a home with the best conceivable view,” she says. “As well as the most luxurious amenities.”
DORADO BEACH, PUERTO RICO: TAX BENEFITS TO CONSIDER
For home buyers eager to live full time in Puerto Rico, the luxurious homes in the East Beach community within Dorado Beach are a huge draw.
In fact, a two-acre ocean property with a main house and a guest house sold for US$30 million last year, the highest ever for Puerto Rico, according to Oriana Juvelier, president of Puerto Rico Sotheby’s International Realty, who served as listing agent on the sale.
“Home buyers are seeking favorable tax situations,” she says. “They’re also seeking 13,000 to 15,000 air-conditioned square feet, and another 4,000 to 5,000 square feet of outdoor living, because our great weather enables us to be outside year-round, from sunup to sunset. That’s what you’ll get in the US$30 million range.”
And for the US$30 million home buyer, amenities abound, including wellness spaces for yoga, pilates, and cycling, and an at-home spa.
“Home buyers used to want a movie theater or bowling alley,” Juvelier says. “The new luxury buyer wants a full body-treatment space and at-home spa space with floor-to-ceiling windows facing a garden, backyard, or green space of some sort.”
NEW YORK CITY: IT’S ABOUT SPACE—AND DESIGN
In the city that never sleeps, a US$60 million apartment home sold in 2021 was the most expensive co-op sale since 2015.
The triplex penthouse, located next to the Guggenheim Museum, was shown for one day only in May, says Nikki Field, senior global real estate advisor and associate broker, Sotheby’s International Realty–East Side Manhattan Brokerage, who handled the sale.
We queued up seven potential buyers, one after another, for that ‘one day only’ showing,” Field says. “The profiles were all similar: billionaires upgrading in New York that qualified for a socially elite building.”
After two days of competitive bidding, one candidate made an all-cash US$60-million offer.
“Ultraluxury buyers in New York are limited by nothing,” Field says. “Their goals are generally divided into two arenas: uptown or downtown, and ‘move-in ready’ or grand estate with prewar bones.”
In this highest of high-end markets, buyers are focused on views, thoughtful design, and curated amenities.
“All of this delivers the added value they require and that their money can pay for,” she says.
Originally posted by Sotheby's International Realty.
More Buyers Turn To Exurbs
With more companies offering extended remote-working options for their employees, home buyers are pushing out farther and wider into once-rural exurbs far from city centers.
TENNESSEE
The exurbs around Nashville have been particularly busy since March 2020.
“We’re seeing the biggest growth in exurbs in Williamson County,” consistently ranked among the 20 wealthiest counties in the U.S., says Jenny Telwar, managing broker, Zeitlin Sotheby’s International Realty based in Nashville. “It’s one of our most active markets.”
“This is where we’ve seen our craziest market—the houses selling in a day or a weekend with 30 offers, the US$200,000 over-asking bids, and buyers waiving everything under the sun,” she says. “It’s like a faucet was turned on, and it’s never stopped gushing.”
Williamson County, which is 30 to 40 minutes from downtown Nashville, “has always had demand, but we’ve never seen a market like we’ve had in 2021.”
One recent buyer closed on a new-construction home in April 2021 for US$1.6 million and turned around and sold it in a day for US$2 million in July.
Nashville has seen a steady stream of national companies looking for an expanded presence in the city, she says. “Most of the buyers I’ve worked with are from New York, Chicago, San Francisco, San Diego, and throughout New Jersey. We expect to see even more.”
Tennessee’s Trousdale County is another high-performing Nashville exurb. Prices there rose 17% from January 2020 to August 2021, Telwar says, and pending sales in Hartsdale, the county seat, shot up 63% in the same period.
Trousdale, which is about 90 minutes from downtown Nashville, “isn’t a commuter pocket,” she says. “It’s more retirees who want to be close to good health care.”
Other Nashville exurbs with strong recent sales include the Tennessee cities of Columbia, Franklin, and Murfreesboro. From January 2020 through August 2021, pending sales rose 23% in Murfreesboro and 50% in Columbia, “which is a rural, rural area,” Telwar says.
She expects 2022 to be another strong year. “The buyer drive is still very, very strong,” she says. “People love Tennessee—the low taxes, the green spaces, the slower pace.”
Plus, there’s a lot of land still to be developed. “The entire Middle Tennessee corridor has a ton of potential. We’re optimistic.”
TEXAS
The greater Austin, Texas, market has also been thriving. Since the suburban market is so competitive, people have been moving further afield, says J Kuper, a third-generation agent and broker/owner, Kuper Sotheby’s International Realty.
Exurbs around Austin that are doing quite well include Lakeway, “which has been hot for some time;” Dripping Springs, which is due west of Austin; and Cedar Park, which is due north, he says.
Not long ago, the Dripping Springs and Cedar Park markets were both considered “very small subsets” of the outlying area, but “now they are borderline considered part of the Austin market,” Kuper says.
New builds have been big in Cedar Park, Kuper says, driving up prices. And residents of Dripping Springs feel like they live in a small town, but are still very much connected to Austin, he says.
For the greater Austin market, sales are up almost 15% compared with September 2020, and “that was a record-setting month then,” he says. Year to date, sales are up almost 21%, and the average price is up almost 25%.
Like Nashville, many corporations have moved to Austin in recent years, he says. “Their workforce is completely happy to be part of the greater Austin community. They are OK with living 30 or 45 minutes from town and being a commuter,” he says.
NEW YORK
In New York’s Hudson Valley, the center of which is about 100 miles north of Manhattan, New York City residents eager for office and outdoor space have flooded the market.
“It hasn’t really slowed down,” says Raj Kumar, agent, Four Seasons Sotheby’s International Realty who works primarily in Columbia, Dutchess, Ulster, and Greene counties. “Our team is seeing bigger- and bigger-ticket buyers. It’s a strong and steady market now. The frenzy that we saw during Covid is no longer there.”
The company had record-breaking sales in a few Hudson Valley communities this year, including a US$1.1 million sale in Greenville and a US$2.2 million sale in Barryville.
Last year, he had a US$3 million sale on the city of Hudson’s Warren Street, its main thoroughfare, a record for the street.
In May, Columbia/northern Dutchess and Greene counties saw a 37% year-over-year increase in median price, he says. Other communities with a lot of traction include Germantown, Rhinebeck, Red Hook, Ghent, Kerhonkson, Millbrook, and Chatham, says Kumar, who lives in Hudson.
Most of Kumar’s buyers are New York City residents looking for a second home, “but we’re seeing more first-home buyers,” he says.
Someone looking for a property in the US$600,000-to-US$700,000 range “used to be considered a good buyer,” Kumar says. “Now that buyer is looking in the US$1.5 million–to–US$2.5 million range.”
Kumar predicts “a strong market for many years to come…Land is still inexpensive and plentiful.”
FLORIDA
The exurban markets that ring Orlando, Florida, have also been hot.
“What you get for your money here is unbelievable, and the other story is our low taxes,” says Carrie Prieto, managing broker for four Premier Sotheby’s International Realty offices in central Florida.
Californians and Midwesterners have joined the traditional buyers from the Northeast.
In Ocala, which is about 65 miles north of Orlando, the average price in August 2021 was up 46% year over year, and active inventory was down 32%, she says. New construction is booming, with 7,000 permits for new construction backlogged in the Ocala Building Division.
“The prices are lower than Orlando, and people are okay with the one-hour drive to the city,” Prieto says.
On the west side of Orlando, “Lake County has seen tremendous growth,” she says. Average prices are up 24%, with active inventory down 34%.
The Clermont area of Lake County has become very popular over the last 10 to 12 years, she says. “It was all country there previously.”
In exurban Orange County, the Horizon West master-planned community is bringing more than 40,000 residential units (mostly single-family and townhomes), Prieto says. “The schools have had trouble keeping up,” she says.
In Osceola County, south of Orlando, “St. Cloud was a small, sleepy city until the last four or five years,” she says. “Now there are big land sales and a lot of communities being planned, with big national building companies coming in.”
Originally posted by Sotheby's International Realty.