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Sunday, Jun 23, 2024

The Cost of Luxury

A boost in sales of ultra-high-end homes in Orange County, by locals and out-of-town wealthy individuals, is leading to more work for those catering to the area’s well-to-do.

Buyers “want to keep their homes pristine, and there’s a lot that goes into that,” said John Stanaland of Villa Real Estate.

Local brokers are peeling back the curtain to show just what goes into this upkeep, and all the employees and subcontractors that are involved.

What’s clear is that the work for a high-end luxury homebuyer—and often their broker—doesn’t end when the deal does.

Property Managers 

It’s not just office towers and commercial properties that require the services of a property manager in Orange County; luxury homeowners often hire an individual to oversee their home, whether it’s a 4,000-square-foot custom property in Corona del Mar or a sprawling 18,000-square-foot Crystal Cove estate.

These property managers can be individuals from varied backgrounds, ranging from an experienced agent to a retired fireman, so long as they’re trustworthy workers that can maintain not only the home itself, but the owner’s privacy.

It’s not a job for everyone, given the personalities and needs of the homeowners.

“These are very busy individuals with high standards,” said Kathryn White of Compass.

“More often than not, one person manages a number of high-end properties on behalf of the buyer,” Stanaland said.

Often, the buyers of custom homes also receive a property manager in the shape of the home’s contractor, with the builder staying on to act as a servicer should anything need maintenance or repair.

Newport Beach-based Patterson Custom Homes, for example, is known for offering management programs for owners after the home is delivered.

“It’s an efficient way to manage these valuable properties, as the builder knows the home and the original subcontractors should anything need repairing,” White said.

These property managers can oversee nearly a dozen other employees, from landscapers to pool maintenance to appliance specialists.

If an owner is out of town or staying at another residence, property managers will check on the house on a weekly basis to ensure nothing is broken and prevent disasters, like floods.

“Every aspect of home ownership can be managed by these individuals,” White said.

Concierge Services 

On the more personalized side, managers or owners can hire high-end concierge services to prepare the home when the owner is expected to be in town, with work ranging from filling each vase in a home with fresh flowers and stocking the fridge.

“I’ve also used concierge companies for buyers that handle packing and unpacking, art installation, and other detailed services,” White said.

In addition to property managers that oversee the home when the owner is out of town, these buyers are likely to maintain a full-time staff to help when the owner is in town.

This ranges from the high-end standard of private chefs, nannies, and housekeepers, to the more extravagant, such as fitness instructors and nutritionists.

Buyers coming from out of town may also bring their staff from prior properties, choosing to relocate employees to the new residence.

“For many luxury homeowners, the main concern when hiring a staff is privacy, so some might choose to retain some of their employees” when moving to a new home,” said Marcy Weinstein of McKown Weinsten & Associates of Compass.

The need to accommodate out-of-town homeowners is increasing, as this week’s OC’s Wealthiest edition indicates; more than a quarter of the top 25 people on the list aren’t full-time residents, and most on the list have multiple homes in and out of the area.

“For homes above $10 million, it’s usually people buying a seasonal home here” from out of town, and mainly come from the Western U.S., says Compass’ Rob Giem.

Jack of All Trades 

Brokers often play a role in the post-sale process.

After acting as a conduit between buyers and sellers, luxury brokers continue to work with their client, specifically new homeowners, serving as a link between owners and contractors or managers.

“As a full-service concierge firm, we often handle a lot of property management duties,” Weinstein said.

This is often true for brokers that specialize in a specific neighborhood, such as Arlen Raubach, a broker with Compass that frequently represents deals in Dana Point’s The Strand community.

Raubach previously told the Business Journal that he acts as an on-call resource for the neighborhood, offering 24-hour support to the community’s pool of exclusive owners.

Secondary Home Market 

Demand for property managers and support staff is likely to grow alongside the county’s secondary home market, which continues to see post-pandemic gains as the region benefits from new out-of-town buyers.

Weinstein notes that the high-end leasing market is practically nonexistent in Orange County, with a greater push from part-time residents to buy summer homes rather than rent.

“There’s a much bigger secondary market for high-end homes in Orange County after the pandemic,” said Weinstein.

Weinstein has seen an increase in secondary home interest from two pools of buyers: those looking for a summer vacation home in a less dense city, and those that operate a business outside of California, which is seeing a greater exodus from those looking to move to more tax-friendly states.

“As some high-end clients move out, others that live outside of the state are increasingly looking to buy vacation homes here.” 

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