In a Manor of Speaking

Los Angeles’ luxury real estate market just received a shot in the arm: “The Manor,” a 56,500 sq.ft. chateau in Holmby Hills, sold earlier this month for $119.75 million—the highest home price in L.A. County history. It represents another notch in the belt for the county, which saw its price record shattered last year by the $110-million deal for Hard Rock Cafe co-founder Peter Morton’s Malibu beach house.
It’s the fourth sale of $100 million or more in L.A. and the third in Holmby Hills, which saw two record-setting sales of $100 million in 2016: deals for the Playboy Mansion, and for a nearby mega-mansion built on speculation. The Manor was built in 1991 for late producer Aaron Spelling and his widow, Candy. She then sold it to Petra Ecclestone, daughter of Formula One billionaire Bernie Ecclestone, for $85 million in an all-cash deal eight years ago.
The racing heiress originally shopped the limestone-draped mega-mansion as a pocket listing in 2014 at $150 million before bringing it to market in 2016 at $200 million. At the time of the sale, it was on the market for $160 million. The buyer remains unknown.
The Manor’s $119.75-million closing weighs-in as the priciest sale in California history, edging out a home in the affluent Silicon Valley community of Woodside that sold for $117.5 million in 2013. The national record still belongs to a New York penthouse towering over Central Park for which billionaire Ken Griffin paid $238 million in January.

It’s a company town (again).

Los Angeles has been a company town since silent movie makers came in search of California’s golden sunlight. The entertainment business has long been the driver of a significant portion of our town’s economy—and has provided streams of qualified (usually well-paid) buyers for homes. A couple of decades ago, with titanic media company mergers shrinking employee head counts and production slates and/or budgets being downsized, “the business” wasn’t as stimulating as before to local real estate markets. But over the last decade—and specifically the last few years—the company town aspect of L.A. is, once again, booming—and is one reason housing prices locally have steadied their course through a number of mini-market shifts.
Google’s January announcement that it would take over much of the failed Westside Pavilion shopping center, proved technology is not only a NorCal economic stimulator. That announcement heated-up demand for houses in West L.A., as prospective landlords snatched-up potential “rental” homes for the giant’s incoming employees. The average single-family home sales price in West L.A. sits at $1,270,000, a 5% increase over this time last year.
Another example: Companies like Amazon and Netflix have agreed to rent entire buildings before construction has even begun on some, setting off a scramble in recent years to erect billions of dollars’ worth of new offices and production facilities to accommodate them. The explosive entertainment business growth has heightened desirability for housing in these neighborhoods; primarily Hollywood, Culver City and Playa Vista (where a median-priced condominium currently sells for $1,08,250, up 16% over last year).
Netflix is all-in on Hollywood (close to this week’s featured listing at 1924 Canyon Drive), helping transform the once-blighted ’hood. “One square-foot of Netflix (and there are hundreds of thousands) creates additional demand in the surrounding area,” says a real estate developer. “There is a massive multiplier effect” made up of demand for housing for their workers and their service providers (who want to be near the big players). Hollywood’s median price for a condo is currently up 4% over this time last year, at $740,000.
Amazon Studios has locked-in more than 600,000 square-feet (so far) in Culver City, where, on average, a condo costs $588,500. Apple Inc., which is set on creating its own content, and HBO have also agreed to move into new buildings being erected in Culver City, a historic movie-making town that has seen an economic renaissance in the last decade, enhanced by the Expo Line light rail connecting it to downtown and Santa Monica.
It seems as though California’s golden light is once again shining brightly on Los Angeles’ real estate markets.

Leaving Los Angeles

The Trump Organization has sold one of its last remaining properties in Greater Los Angeles, a five-bedroom home in Beverly Hills. 809 N. Canon Dr. recently closed for $13,500,000, public records show. It was an off-market sale. The buyer was an entity named Hillcrest Asia Limited. The MLS reports prices have remained flat in the surrounding area; showing .0% change over this time last year.
In 2007, Trump Org. paid $7M for the home. The 5,400-square-footer sits at the top of Rodeo and Canon, where the two drives meet Sunset Boulevard, directly across from the Beverly Hills Hotel. In early 2017, The City of Beverly Hills began issuing fines on the Trump property because its tall hedges violated City ordinances. Trump Org. representatives contended the hedges were necessary to “ensure privacy” for Donald and/or members of his family. Trump Org. paid $1,128 in fines over the course of 2017, City records show.
The sale leaves the 250-acre Trump National Golf Club in Rancho Palos Verdes as the New York-based firm’s only remaining L.A.-area property.

Home is where the heart is.

As home prices continue a herky-jerky march upward in Greater Los Angeles, and as rents skyrocket and short-term rentals like Airbnb displace longtime tenants from their rent-stabilized units, more and more people are facing a homeless crisis not of their own making. Earlier this week, L.A. County released results of its latest homeless head count. The Westside of L.A., particularly, experienced a huge leap: 19% more people are homeless there than in 2018.
Many lawmaker and social workers say that common causes of homelessness—mental illness, substance abuse, and gender identity discrimination—are joined by a new cause: Lack of affordability. And although U.S. home prices overall rose at their slowest pace in more than 6 years in March (a sign weaker sales are keeping a lid on price increases), L.A.’s home prices inched-up 1.3% (essentially staying “the same as” last year’s prices).
Those and other statistics were found in an S&P CoreLogic Case-Shiller 20-city home price index study, released this week. The report cited that prices nationwide in March climbed 2.7% over March of 2018, barely down from February 2019’s gain of 3% over February 2018.
Even with March’s barely-smaller increase, home prices continued to rise more quickly than inflation (which increased 2% in March from a year ago). This condition is a contributing factor to an “affordability gap,” that could lead to someone not being able to find housing that fits into their budget. And that could be the first step to no housing at all.
During June’s gay pride season, consider a donation to the Los Angeles LGBT Center, which provides social services and affordable housing to at-risk youth and seniors—and everyone in between.
Have a great Pride weekend.

Is “rich” a state of mind?

We know that the older you are, the higher you set the bar for what it takes to be considered wealthy. But an even bigger influence on that number can be where you live. Being wealthy in Denver doesn’t mean nearly the same thing as being wealthy in Los Angeles, San Francisco, or New York City.
People living in the San Francisco Bay Area—or trying to, anyway—have the loftiest definition of what net worth you need to be rich in their city; an average of $4 million, according to a report published by Charles Schwab. And if you narrow that down just to the baby boomers surveyed (ages 55 to 73), the average jumps to $5.1 million. The percentage of homes worth at least $1 million in S.F. is a shockingly-high 81%.
The Schwab survey is a national sample of 1,000 respondents between the ages of 21 and 75; for city results, Schwab surveyed between about 500 and 700 people in each location.
East Coast boomers in New York and Washington D.C., meanwhile, said it would take $3.6 million to be thought of as wealthy in their cities. The percentage of homes worth $1 million or more in N.Y and D.C. was 10.3% and 4.9%, respectively.
Away from the coasts, Denver had the lowest average dollar figure ($2 million) for what it would take to be thought of as wealthy. It scored high on another measure—the percentage of people who said that feeling personally wealthy is more about how they live their lives than about a dollar amount. More than 75% of people surveyed in Denver agreed with that, compared with 66% for L.A., which had the lowest percentage of contentedness among the cities surveyed.
And when asked what they would do with a $1-million windfall, the cities with the highest percentages of people saying they’d plow it into real estate were Houston (40%), Boston (36%) and L.A. (35.2%).


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