According to some analysts, the U.S. luxury home market has reached its peak. Events ranging from global economic volatility to an overabundance of luxury offerings to the cooling of the tech boom have caused a marked slowdown in the sale of homes above the $2 million mark in some communities.
The Business Journal asked top local real estate experts for their insight as to whether a similar situation is brewing here. They said no; in fact, some said it’s the opposite. But a couple wondered if it might be nearing its peak.
“No, our local luxury market has not peaked,” says Rob Giem, estate director of Newport Beach-based Compass Real Estate. “In fact, I believe we will see some very impressive numbers in the next 12 months. While a current oversupply of new development has created imbalance in some overheated marketplaces—New York, Miami and parts of Los Angeles, for example—we have had slower and more steady growth in recent years. Leverage and speculation are nearly nonexistent in this market, making it even stronger than many think.”
Tim Carr, partner with Villa Real Estate, shares that perspective: “I don’t think we have peaked yet, because the economy still seems strong, but I definitely think that we are getting toward the upper end of this market. I think our market is interesting. Buyers are becoming more cautious, but there is still a large influx of international buyers, and we have seen some record-setting numbers this year.”
Phil Immel, founder and chief executive of Immel Team Luxury Real Estate, a boutique firm that specializes in coastal properties, says the core of his market, Dana Point, is experiencing a slight slowdown. “We’ve sold three since July and currently have six in escrow,” he said. But he added that, “Part of it is seasonality; fewer beach houses are being purchased right now. Plus, we’re going into fall, the holidays. After Super Bowl Sunday, activity will pick up again.”
Carr said he believes luxury home prices will continue to rise. “We currently see strong demand and limited inventory. Good homes are selling for premiums, but marginal homes are sitting. I am not sure how long and how far this market will go, but there is still strong demand for good product.”
Giem said, “I also expect that the final sellout of the Newport Coast and the near sellout of The Strand will help push prices up in the luxury sector as the growth in demand continues to outpace supply.”
“For the longer term, it’s a fine market,” Immel said. “Nothing disastrous is on the horizon. We’ll be cruising at 35,000 feet through the spring and into the summer market.”
Laguna’s Biggest ’17 Sale
The custom estate at 21 Montage Way boasts Laguna Beach’s highest recorded sale price so far this year. It’s also the biggest sale in the exclusive enclave of Montage Laguna Beach in five years, fetching $18 million. The transaction closed on Oct. 16. Its list price in May was $22 million.
The 7,500-square foot residence has four master suites and five baths, as well as a professionally appointed kitchen, butler’s pantry, two living rooms, an exercise room, and a 3,000-square-foot basement.
The grounds feature a teak deck, fire pit, two-story waterfall and Jacuzzi, as well as an infinity swimming pool and spa, outdoor kitchen and a fire pit overlooking the ocean.
The estate is on a natural spring that uses a French drain system to collect water for use in the pool, spa, waterfall and landscaping.
Shana Spitzer and Laura Roche of Villa Real Estate represented the seller, and Winston West of Berkshire Hathaway Home Services worked on the buyer’s behalf.
Premium Property
The home at 3309 Ocean Blvd. in Corona del Mar sold on Oct. 19 for $10 million, coming in just over its August list price of $9.99 million.
The three-bedroom, three-bath home spans 3,796 square feet on a 7,380-square-foot lot. The property, which boasts direct beach access from Ocean Boulevard and privately gated Breakers Drive, has more than 60 feet of beach frontage.
The main home’s floor plan encompasses a living room with vaulted ceilings, kitchen and adjacent dining area, a den and an office. Oversized windows and multiple decks highlight panoramic ocean views.
Tim Smith and Marie Gentosi of Coldwell Banker Residential Brokerage represented the seller, while the buyer’s side of the transaction was handled by Christopher Samuelson of Regency Real Estate Brokers.
