The historically low 3.5% interest rates that the country enjoyed between 2013 and the end of last year couldn’t last forever. Interest rates have risen, and signs indicate that they’ll increase even more in coming months.
The average home price is $677,400, per Zillow. The rise in interest rates from 3.5% to 4.13% recently means that Orange County buyers are paying approximately $200 more per month for that home than they would have last year.
What does that mean for Orange County’s luxury home segment, which is defined as the top 10% of homes on the market? Top luxury specialists weigh in.
Rex McKown of McKown, Weinstein & Partners, who, along with partner Marcy Weinstein leads a team of luxury home specialists, says interest rates don’t impact the luxury market in the same way that they affect other markets.
“Ninety percent of our buyers and clients are buying all cash,” he said. However, he added that rising interest rates can create a trickle-up effect. “For example, if someone in the $2 million range can’t get a loan to purchase the next level up to, let’s say, the $4 million range, then the $4 million homeowner can’t bump up to the $6 million or $8 million range, and so on.”
Adrienne Brandes of Surterre Properties Inc. added her perspective. “Buyers in the $4 million and up range typically either pay cash or have a unique relationship with a banker or stockbroker where they can get preferred rates against what they have in the brokerage firm or the bank,” she said. “For example, I am in escrow currently with a client who is in the $4 million-plus range, and his rate is 2.3%, interest only … I don’t think the interest rates typically affect high-end buyers.”
New Build, New Life
The newly completed classic Tuscan-style estate at 35 Shoreline Drive in Dana Point is perched on a .37-acre lot above Headlands Point at Strand Beach in Dana Point.
The 9,004-square-foot residence sold on March 24 for $9.2 million. It was originally listed in September for $9.2 million.
The five-bedroom, nine-bath home boasts ocean views from nearly every room. Floor-to-ceiling windows in the living and dining rooms frame unobstructed ocean views.
A walk-in wine cellar and a home movie theater are among the unique features. The home also has an ocean-view infinity pool and an in-ground spa surrounded by professionally landscaped grounds.
The transaction was represented by Jeff Golden of White Sand Realty on the seller’s side and Patrick Knauf of Realty Benefit on the buyer’s.
Location to Love
Ideally situated on the sand in Linda Isle in Newport Beach, the 4,558-square-foot home at 501 Via Lido Soud sold on April 11 for $9 million.
The four-bedroom, five-bath home had been owned by the same family since 1940 and was sold “as is” in an estate sale. It bested its March list price of $8.75 million.
The home offers four bedrooms and five baths in 4,558 square feet set on a 7,350-square-foot lot. It also features a two-car garage, plus two parking spots, a rarity on the island. The property’s features also include an in-ground pool, a covered patio and a large private dock.
Nancy Casebier and Eric Bergman of HÔM Sotheby’s International Realty represented the seller, and Mark Todd of Surterre Properties worked on behalf of the buyer.
Blank Canvas
The sprawling ranch-style estate at 2566 Monaco Drive in Laguna Beach’s guard-gated Irvine Cove, available for the first time in more than 30 years, presents a blank canvas for the new owner. It sold on April 10 for $8 million after listing in February for $9 million.
Nestled on a landscaped double home site of just over half an acre, the one-level design encompasses approximately 5,528 square feet of flowing living space. Vaulted, open-beam ceilings soar above a formal area with a dining room, living room and handsome fireplace.
The home’s kitchen features an island with seating for six or more, a second island with cooktop, white cabinetry with glass doors, a built-in refrigerator and casual dining area.
There are six bedrooms and five baths. Nearly every room opens to the outdoors. There are several private patios, a sun terrace, a covered lanai, and an ocean-view courtyard.
Andy Stavros of Teles Properties represented the seller in the transaction, and Chris Valli of Surterre Properties represented the seller.
