High-end property draws record prices despite downturn

“Recent news stories about housing prices have failed to report on the robust sales achievements in the luxury real estate sector,” said Gayle Boren, a partner of The Boren Group, the exclusive affiliate of Christie’s Great Estates in Douglas County, including Lake Tahoe. “The high-end category worldwide continues to outperform expectations.”

The most recent report stated in a Tahoe-based real estate firm’s quarterly report, dated the end of 2007, that Lake Tahoe’s high-end housing market is flourishing. Single-family home sales in Incline Village, one of the region’s priciest markets, rocketed in the third quarter by 45 percent from a year earlier, according to an Associated Press article quoting statistics from officials for Chase International.

The report stated that single-family home sales elsewhere along Lake Tahoe’s eastern shore rose 11 percent, with the median price falling 12 percent.

“I see better movement on the high-end homes (for 2008),” said Jerry Boren, managing partner at The Boren Group. “When I say higher end I mean $2 million plus, especially lakefronts as opposed to everything else.

“There is some movement on the low-end condo market around $350,000 in the Tahoe Keys and there is a wide gap in between. There are sales going on but there are very good deals in between there. And you don’t see the high-end home people budging too much.”

In San Francisco, a feeder market for Lake Tahoe, Pacific Union sold 33 residences for more than $3 million each in the fourth quarter of 2007, almost double the number for the same quarter in 2006. In January, Newport Beach, Calif., achieved an all-time record with the sale of a $30 million home.

“All our high-end properties ($10 million and above) are selling for more than they would have a year ago,” said Jeffery Hyland of Hilton & Hyland in Beverly Hills, Calif. “There is too much money and too little luxury inventory.”

In Texas and Oklahoma, high-end luxury reported record sales in 2007, according to the Christie’s Great Estates affiliate brokerages. In these oil economies, Martha Turner Properties in Houston acknowledged a 19 percent increase over 2006 sales of homes valued at $1 million and above, which accounted for 16 percent of their total sales.

In Palm Beach, Fla., sales have remained steady, with the number of single-family homes sold increasing by 12 percent in 2007 (compared with 2006) and the average price of a single-family house rising nearly 16 percent (compared to 2006) to $5.3 million in 2007, Brown Harris Stevens reports.

“We, too, continue to see growth in the luxury market,” says Tom Bringardner, president of Premier Properties of Southwest Florida. “The number of sales and dollar volume of sales over $3 million in Southwest Florida, including Naples, Marco Island and Bonita Springs, was up over 2006 results. In 2008, the number and dollar amount of our escrow deposits has been increasing; showings are increasing, and I believe these are both leading indicators of pent-up demand.”

Premier Estate Properties in Boca Raton, Fla., sold a $19 million Delray Beach, Fla., oceanfront estate as well as the highest-recorded sale of land in Manalapan Beach for $11 million.

David Omler of Paradise Properties of Brevard in Satellite Beach, Fla., near Cape Canaveral also bucked the Florida trend in which some brokerages have reported a two-thirds drop in total sales.

Omler’s company sales are up 6 percent over 2006, and in the past year, he acquired four small companies.

“We’re not Palm Beach or Boca Raton, where every home is a million-dollar home,” he said. “In 2007, however, I sold the most million-dollar homes in company history, and the activity for this market since the first of the year is like nothing I’ve ever seen.”

In the Caribbean the high-end market is definitely the strongest performer of the island property market now, with both European and American buyers, according to Christian Wattiau, owner of Sibarth Real Estate on St. Barths, who sold a US$22 million home at the end of 2007. Cap Cana, the exclusive Dominican Republican resort represented by Provaltur International, sold 75 percent of beachfront condominium inventory for US$68 million in December of 2007. Cap Cana achieved a record sale last month for a beachfront lot that traded for US$5.8 million.

In the Virgin Islands, Peter Briggs of John Foster Real Estate reports that his clients “have been pleased to find turnkey properties available for immediate occupancy, evidenced by our successful closings in December and January in the $2 (million to) $4 million price range.”

As far as European and Canadian investors taking advantage of the declining dollar and buying into the U.S. higher end real estate, especially Lake Tahoe, Boren states that he has noticed an increase in interest.

“We’re just starting to get our foot in the door,” he said. “It’s been a long time coming. Over the years I’ve never been overexuberant the way Lake Tahoe has been marketed around the country or the world.

“One of our lakefront listings is on (an Internet visual) loop in Zurich (Switzerland) and that was through the Christie’s connection. So that’s a nice little perk for us. And I know our name and Lake Tahoe (are) getting out there.

“And with the devaluation of the pound and where the dollar stands now, Lake Tahoe is a great buy.”