California |  Luxury always finds a buyer

California | Luxury always finds a buyer

It’s a market that regularly makes headlines in the American press: that of luxury properties, that are selling… or not. In the spring, a “mega mansion” in Los Angeles sold for less than half the asking price ($126 million per 100,000 square feet).⁠2 and 42 bathrooms, all the same). Could luxury setbacks herald the end of an era of California real estate glut? Nothing is less secure.

Posted at 12:00 pm

Anabelle Nicoud
special cooperation

(San Francisco, California) City of all excesses, Los Angeles offers a vast portfolio of real estate, each one more ostentatious than the last, as the real estate faithful know. sunset sale.

Further north, San Francisco is at the heart of the most expensive real estate market in the United States. With Silicon Valley right next door and a median annual household income of $113,000, compared to $47,000 for the entire United States, according to 2021 figures, San Francisco has continued to see real estate prices skyrocket since the beginning of the 2010s.


PHOTO CARLOS BARRIA, REUTERS Archive

San Francisco is at the heart of the most expensive real estate market in the United States.

abundance of luxury

“We have much more demand than supply,” sums up Isabelle Grotte, a French-born agent who, with her team, made $195 million in real estate transactions last year in San Francisco. With its famous slopes and hills, the city does indeed offer little untouched land to build castles on.

Property prices in the most enviable neighborhoods will range from $17 million to $25 million. Which seems modest next to the steroid villages of Southern California.

This does not prevent more luxurious properties from coming onto the market regularly.


COMPASS WEBSITE PHOTO

Actress Sharon Stone’s former home is currently for sale for $39 million.

Thus, an old house of the actress Sharon Stone, which dominates the beach of Baker Beach, in the elegant neighborhood of Sea Cliff, is currently for sale for 39 million dollars. At this price, you’ll get slightly dated Italian decor, stunning views of the Pacific Ocean, Marin County Mountains, and the Golden Gate Bridge, and all those sunbathers relieving themselves at the foot of the villa stairs as soon as possible. good weather returns. We have witnessed it.

Another neighborhood, other excesses: On Russian Hill, high in the hills that make up San Francisco’s charm and reputation, a double penthouse that belonged to former Secretary of State George Schultz is being sold for $29 million. This one has more than 5800 m2.⁠2 of living space and floor-to-ceiling windows offering sweeping views of the bay. For the more cost-conscious millionaires, it is possible to purchase one of the two units that make up the penthouse.


PHOTO FROM SUMMIT PENTHOUSES WEBSITE

On Russian Hill, atop the hills that make up San Francisco’s charm and reputation, a double penthouse apartment once owned by former Secretary of State George Schultz is for sale for $29 million.

Post-pandemic market

Post-pandemic, despite the end of compulsory office work announced by major employers in San Francisco, notably Airbnb and Pinterest, the real estate market continues to grow: +11.7% growth in one year for San Francisco, 21 .3% in Santa Clara County (which includes much of Silicon Valley) and Alameda County, near Oakland.

The luxury one follows the evolution of prices in the average market, which continues to hover around 1.9 million dollars for an average single-family home, according to figures from the essential real estate portal Zillow.

“A house that would have sold for $900,000 three years ago is now going to sell for more than $3 million,” observes Jen Passetti, a real estate agent in San Francisco. She should note that if she likes to browse Zillow, she should note that the prices displayed never reflect the retail price in San Francisco. “It is a price that is made to call a tsunami: we show much lower to attract more buyers and spark interest and emotions,” explains Mr.me Passetti. Single-family homes sell like this in less than a week on average, with an oversupply that can run into several hundred thousand dollars.

continuous rise

Rising interest rates shouldn’t stop this real estate craze in the San Francisco Bay Area, as it is in several hot markets across the United States (Austin, Texas, in particular).

Ted Stroll bought a house in a modest neighborhood of San Jose, one of the most affordable cities in Silicon Valley, in 2007 for US$600,000. Today, the retired California Court of Appeals attorney believes it’s worth more than double that. “If he was still working, he wouldn’t be able to shop in San Jose today,” Stroll said. Unfortunately, mortgages are so high that many people cannot retire or have to move. Its a big problem. »

However, the upward trend should continue, according to Zillow’s predictions. “Our model predicts another 16.3% price increase through February 2023,” said Jeff Tucker, senior economist at Zillow. But my instinct tells me that it will surely be less, the bay will surely be one of the first regions of the country to experience the effect of the increase in interest rates. It is still completely unbelievable to see a 15-20% price appreciation in a real estate market in such a short time. I never thought I’d see this. »

The high-end market in this region is also not experiencing the crisis. “What it shows is that there is a strong base of buyers who have no problem buying a home and can even pay more,” Tucker said.

the kingdom of home staging

Polished photos, trendy furniture and plants, lawn chairs that invite you to relax. In California, real estate agents do not interfere with the marketing of the properties entrusted to them. Unless you have a house that is impeccably tested and decorated with works of art (which is not impossible here), the properties are subject to renovation and a home staging before they go on sale. Thus, we maximize the potential of a property, we facilitate the ability of future buyers to project themselves there and thus avoid downward negotiations that could occur. Goodbye, then, to IKEA furniture damaged by years of service, wedding photos and other children’s drawings. Often a sine qua non of agents, this service costs the seller several tens of thousands of dollars. Interestingly, sellers leave their homes several weeks before the sale, and the acquisitions here are very fast and inflexible.


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