A collection of local and out-of-town billionaires, well-known and under-the-radar business executives, foreign buyers and other well-heeled investors spent more than half a billion dollars on Orange County’s most valuable homes for the second year running.
That’s the takeaway from the Business Journal’s inaugural listing of Top Home Sales for the prior year, an addition to our long-running Top Deals Commercial Real Estate special report, which begins on page 17.
Our Top Home Sales listing includes prices, addresses, and brokerages for the 28 largest reported homes sales in OC last year. Each topped $11 million in price.
We’ve included specific buyer and seller data where available, in addition to a map showing the general location of the homes featured in the listing.
Data for the list was provided by Irvine-based land brokerage Land Advisors Organization, which tracks local land and home pricing data for its homebuilding and development clients.
Land Advisors’ Senior Vice President Mike Hunter has been in the business since 1969. He said the ultra-luxe market’s performance last year ran counter to the trends seen elsewhere in OC’s housing market.
While the highest of the high-end homes outperformed year-ago levels on a total dollar basis, sales for houses between $1.5 million and eight digits saw a pronounced drop in OC, he said.
Hunter also pointed out sales tapered off toward the end of the year, which Rex Mc- Kown of McKown Weinstein Associates at Surterre Properties also notes.
“The overall sales in the luxury market were down during the second half of 2018,” McKown said. “While many notable sales happened, the market as a whole was not as healthy as 2017.”
Early returns suggest the same trends are continuing into the start of 2019.
Sales Up, PSF Down
Some other data points and items of interest from 2018’s collection of priciest sales:
• The top 28 sales totaled about $514.8 million, up about 2% year-over year.
• There were four sales topping $30 million last year, twice as many as 2017. An additional four sales exceeded $20 million in 2018, one fewer than 2017.
• Last year’s median price for the top 28 was $18 million, up $1 million from 2017.
• The average price per square foot for the top sales last year was just below $2,200, down about 3.3% year-over-year, not factoring in home sites slated for teardowns. A new home in Irvine can be bought for a little more than $500 per square foot, by comparison.
• Laguna Beach was the biggest source of luxe home sales last year, with 11 deals, up from five a year prior. Newport Coast was second with eight, down from 10 in 2017.
• Proving high-end buyers still enjoy a new home, 11 of the 28 on the list were built less than two years ago, including two at the gated community The Strand at the Headlands in Dana Point.
Steve High, president of Villa Real Estate, said when he looks back at last year “the biggest winners of the year were the spec builders—those guys had a captive audience.”
• Bill Gross has more money than you or me. The billionaire bond trader, who retired this month, spent nearly $68 million for a pair of homes a few miles from each other in Laguna Beach.
Gross paid close to $7,400 per square foot for 2471 Riviera Drive, OC’s most expensive home sale last year at a reported $35.8 million.
“I lived in Irvine Cove for 30 years and wanted to return to the peaceful tranquility it offers,” Gross told the Business Journal last week.
The price he paid was said to be more than $800,000 over the beachfront property’s asking price—allowing the area’s most famous finance executive to outbid his ex-wife, Sue.
It’s not the first time Gross has made notable real estate moves in OC. A decade ago he paid a reported $23 million for a double lot in Newport Beach’s gated Harbor Island and knocked down the existing homes. He ended up selling the site before it was rebuilt.
High-end brokers caution that the Bond King’s two deals last year are not indicative of the health of the overall market, where top-end homes are taking longer to sell.
Brokers also tell the Business Journal that they’ve had to caution their selling clients not to use Gross’ “money is no object” purchases as comps to use for their own listings.
The county pulled out the welcome mat for a few notable executives with star power, like Dallas Mavericks owner and ABC’s “Shark Tank” investor Mark Cuban, who scored a 7,867-square-foot vacation spot at Montage Residences for $19 million.
It was the highest sale at the Montage over the past year, according to listing agency Villa Real Estate.
How does a famed dealmaker like Cuban close a deal on an ultra-luxe home?
The seller of the Montage property—Texas natives—got season tickets for the Mavericks’ home games, and their son got an internship with the team, according to Cuban’s broker, Tim Smith of Coldwell Banker.
Those tied to the sports world were also sellers last year. Former Angels’ third baseman Doug DeCinces and his wife, Kristi, sold their longtime Irvine Cove home at 124 Riviera Way for a reported $14 million; one of a few sales along Riviera Way and nearby Riviera Drive noted in our listings.
What does the state of the ultra-high-end market say about homes for the rest of us?
Not too much, according to Land Advisor’s Hunter—himself a former notable athlete, having played football for University of Southern California under coach John McKay.
“A lot of the major builders come in and talk to me, and all but one said our sales have picked up [for prices] under $1 million, but it slowed down” for higher-priced offerings.
Hunter said he anticipates homes sales this year to perform similar to last year.
Marcy Weinstein of McKown Weinstein Associates at Surterre Properties said some areas have new homes mixed with those 25 years old, making the prices “vary greatly.”
“Over the last 25 years, Newport Coast has always offered land as an option for building your dream home and [only] one or two lots remain,” she said. “This will actually cause our market to slow, with less choices there are fewer sales.”
Not every big-dollar transaction made the list. A few luxe brokers noted that several off-market and private transactions completed in 2018 by publicity-shy buyers and sellers went under the radar, and were not picked up by our data gatherers, which drew information from the Multiple Listing Service.
The Business Journal welcomes feedback on our inaugural listing, as well as suggestions on how to improve future editions of the Top Housing Sales listing. Contact Business Journal Editor Mark Mueller at (949) 833-8373 or by email at email@example.com.