Today, the Westside market watch will focus on the soaring prices of ultra-luxury homes. The first nine-digit home sale happened on the Westside recently selling for $110 million. Though this is something to notice, it is not as outrageous as you might first believe. In the first five months of this year, the area has sold 12 ultra-luxury estates. Of those, six have sold for $40 million or more.
What Houses Have Sold?
Let’s take a look at what has the ultra-luxury market hopping:
- $110 million mansion in Malibu
- $85 million estate
- $85 million for Bel Air compound
- $68.8 million for Holmby Hills estate
- $56 million for a mansion in Bel Air
- And more
What’s Behind the Prices?
When you see a jump from $4 million homes to $40 million, you need to look at what’s behind the higher prices. There are several Westside market watch factors coming together at once on the Westside. These include:
- High interest in the area from domestic buyers with enough capital
- Continued strong interest from foreign buyers
- Strong market conditions
- Luxury amenities not offered in other areas
- LA market has been overlooked in the past
Prices Continue to Creep Up
As luxury homes sell for higher prices, those owning luxury homes feel more encouraged to sell. With each sale, the average luxury home price goes up. This encourages more homeowners to sell at higher prices. The cycle is currently on an upward swing.
Of course, some people use the extraordinarily high prices to call attention to their mega-mansions. Nile Niami has recently built a spec mansion in Bel Air and is asking $500 million. For this price, the buyer will receive amenities not even dreamed of, including a ceiling of jellyfish tanks.
The likelihood is that Niami won’t get what he is asking. However, the stir created by asking $500 million will likely get him more than if he had listed the home at a more reasonable price. In general, homes that are listed between $50 and $100 million see offers come in 30% lower. And, the longer a home stays on the market, the lower the offer. For ultra-luxury homes on the market more than 250 days, offers come in at about 70% of listing price.
For help buying and selling a luxury home on the Westside, give me a call. I have extensive experience helping my clients navigate the market in this area and look forward to talking with you about your needs.