Super-luxury home sales surge across America, rising 35% in 2021

Dec 22, 2021

(BLOOMBERG) IN 2021, at least 40 residential properties sold for more than US$50 million in the US, according to data compiled by the appraiser Miller Samuel.

That's about a 35 per cent increase over 2020, which was also a record year. "The surge in this tier is unprecedented," says Jonathan Miller, the company's president and chief executive officer. "We've never seen this kind of growth."

Fuelled by a booming stock market, low interest rates, and a pandemic-era's heightened emphasis on home life, prices for luxury houses have risen to stratospheric heights across the country.

"It's a national phenomenon," says Miller. "Not enough words have been written on the impact of low rates, even on the uber-wealthy. And one big takeaway in housing is: The lower the rates, the higher the prices. And this is that phenomenon on steroids."

The country's 8 most expensive homes, according to Miller Samuel's data, each sold for US$100 million or more and are spread equally between the Los Angeles metro area, the New York metro area, Palm Beach, Florida, and ranches in Montana.

"Since 2014, there's been the establishment of a new class of property," says Miller, referring to these US$100 million-plus houses. "Initially, it seemed comical or whimsical; these numbers we were seeing came across as a flash in the pan. But now we're in our seventh year of it."

A caveat: Miller says his tally is provisional, because, as financial advisers rush to line up deals before 2022 begins, he predicts a flurry of closings at the very end of the year.

"I don't think anyone is saying that in 2022, taxes are going to be cut," he says, "so it's just hedging."

New York vs Florida

For all the chatter about rich people leaving high-tax states, New York still topped the list for the number of sales over US$50 million, with 13; Florida had 11.

The US$157.5 million sale of a duplex at 220 Central Park South was No 3 on Miller's list, while the most expensive sale in Florida, 535 North County Road in Palm Beach, sold for US$122.7 million.

The value of New York real estate on Miller's list totalled around US$931 million, whereas Florida's added up to roughly US$941 million.

New York's Hamptons did some heavy lifting.

More than a third of the sales in New York state occurred in the Long Island enclave, including the former Ford family estate in Southampton, which sold for US$105 million; 2 East Hampton beachfront parcels totalling US$85 million on West End Road, reportedly sold by Calvin Klein; a humongous house at 840 Meadow Lane in Southampton that sold for US$70 million; and 30 Spaeth Lane, a 6-acre (2.4 hectare) oceanfront parcel in East Hampton, which sold for US$60 million. In Florida, the action was mostly in Palm Beach and Manalapan, the area to its south.

No 6 on Miller's list is the massive property at 1840 S Ocean Boulevard, on the stretch known as billionaire's row, which sold for US$109.6 million. Following that is the 33-bedroom, 6-hectare compound in Manalapan sold by the Ziff family for US$94.2 million. Hot on its heels is another Manalapan home, 1020 South Ocean Boulevard, which hedge funder Paul Saunders reportedly sold for about US$90 million.

Wide open spaces

Some of the biggest prices paid this year were for huge tracts of land.

Rupert Murdoch's US$200 million purchase of a 140,000-hectare ranch in Montana topped the list. No 4 on the list is Climbing Arrow Ranch, a 32,000-hectare working ranch near Bozeman, Montana, which sold for about US$136 million.

Even if other properties couldn't match the sweep and scale of a county-sized ranch, they were at least adjacent to wide open spaces. "It's not that surprising," says Miller. "It's proximity to water and views."

Indeed, the second-most-expensive home on Miller's list, a 2.8-hectare compound in Malibu purchased by venture capitalist Marc Andreessen, sits on the edge of the Pacific Ocean. Every Palm Beach home on the list has waterfront, as does every Hamptons home included.

The Carter Estate in Maui, Hawaii, which Jeff Bezos reportedly purchased off-market for US$78 million, is on the water, as is the US$70 million Laguna Beach, California mansion reportedly purchased by hedge fund manager Joseph Edelman. So is a US$50 million mansion in Greenwich, Connecticut, that has 103 metres of frontage on Long Island Sound.

Go big and go home

Only homes in New York and Los Angeles bucked a trend in which the emphasis was on square footage, rather than square acreage.

Los Angeles homes were particularly massive. The musician known as the Weeknd purchased a 33,000 square foot home in Bel Air for US$70 million. A newly constructed mansion in Brentwood's tony Mandeville Canyon covers 19,000 square feet (sq ft) and sold for US$62.6 million.

Meanwhile, billionaire Nicholas Berggruen acquired the 29,000 sq ft Hearst Estate in Beverly Hills for US$63.1 million; not far behind, the Hilton family sold a 15,000 sq ft Beverly Hills mansion on 1 hectare for US$61.5 million.

The lowest-priced entry on the list, a nearly 29,000 sq ft home at 67 Beverly Court, was initially listed at US$165 million. After failing to find a buyer, it sold at auction for US$51 million.

Miller cautions against extrapolating from these sales to the wider market.

"This suggests - or illustrates - the widening wealth gap," he says. "In many ways, it's a circus sideshow. It has very little, if anything, to do with local markets, and has everything to do with a global perspective and investing in tangible assets instead of financial instruments."