Bidding Wars Break Out for Tear-Down Mansions
Coldwell Banker Previews International via Bloomberg
This Brentood house originally listed for $3,625,000; after seven offers a deal was reached within 10 days for the sale of the five-bedroom, six-bathroom home for $3.85 million.
This Brentood house originally listed for $3,625,000; after seven offers a deal was reached within 10 days for the sale of the five-bedroom, six-bathroom home for $3.85 million. Source: Coldwell Banker Previews International via Bloomberg
Bidding Wars Break Out for Tear-Down Mansions
Coldwell Banker Previews International via Bloomberg
This Brentwood home was listed for $1.55 million and had more than 100 people look at it during three open houses. It received 11 offers and is set to close escrow on May 23 for $1,705,000.
This Brentwood home was listed for $1.55 million and had more than 100 people look at it during three open houses. It received 11 offers and is set to close escrow on May 23 for $1,705,000. Source: Coldwell Banker Previews International via Bloomberg
Bidding Wars Break Out for Tear-Down Mansions
Rodeo Realty Inc. via Bloomberg
This home located in Santa Monica two blocks from the beach, was sold in mid-April for $2.85 million after receiving multiple bids within the first week of having been listed. The agency that sold it to a husband-wife couple with four kids was Beverly Hills-based Rodeo Realty Inc.
This home located in Santa Monica two blocks from the beach, was sold in mid-April for $2.85 million after receiving multiple bids within the first week of having been listed. The agency that sold it to a husband-wife couple with four kids was Beverly Hills-based Rodeo Realty Inc. Source: Rodeo Realty Inc. via Bloomberg
A week after Christine Lynch listed
her house in the Brentwood neighborhood of Los Angeles for
$3.625 million, she had seven offers. Within 10 days, a deal was
reached for the five-bedroom, six-bathroom home — and for
$225,000 more than she asked.
“My first reaction was, ‘Wow, I guess we’re really doing
this,’” Lynch, 55, said in an interview. The all-cash
transaction was completed on April 23. “I was really surprised
by this level of interest and how quickly it sold,” she said.
Bidding wars are breaking out for luxury homes in such
wealthy Los Angeles enclaves as Brentwood, Beverly Hills and Bel
Air as an increasing number of buyers bet on rising home prices
and investors return to the market. Even properties in need of
extensive renovation are being fought over by shoppers who
expect to resell them for more after a remodel or rebuild.
“The percentage of people who think prices are only going
to go up is the greatest I have ever seen in my career,” said
Syd Leibovitch, president of Rodeo Realty Inc. in Beverly Hills.
Sales of Beverly Hills homes priced at $2 million and
higher climbed 11 percent in the first quarter from a year
earlier to 39, according to DataQuick, a San Diego-based
provider of property information. In Brentwood, whose residents
include actress and singer Julie Andrews, they increased 56
percent to 25, and in Malibu they gained 64 percent to 23.
Throughout the U.S., residential-property sales of $1
million and higher rose 7.2 percent in March, the most recent
month for which figures are available, from a year earlier,
according to the Chicago-based National Association of Realtors,
whose price categories stop at that amount.
Across U.S.
Demand has been rising for high-end homes in the
northeastern U.S., including Boston and New York; on the
California coast; and in parts of the southern U.S. amid a
recovery in financial markets, according to Paul Bishop, vice
president of research at the Realtors group.
In Brentwood and Beverly Hills, homes usually start between
$2.8 million and $3.2 million for those on smaller lots in low-
lying areas, and can go as high as $20 million for larger plots,
according to John Gould, manager of Rodeo Realty’s Beverly Hills
office. Properties in hillier areas, which usually are larger
and have views, tend to range from $5 million to $75 million.
In the Los Angeles area, multiple offers — as many as a
dozen per home — have reduced listing times for the highest-
priced houses as bidders worried about losing out act faster
than they have in the past two years, according to Stephen Shapiro, cofounder of Westside Estate Agency in Beverly Hills.
Acting Quickly
While luxury properties used to linger on the market for
weeks and months as recently as 2011, offers now come in on the
day of the first showing, a phenomenon that was common during
the 2007 buying frenzy, Shapiro said.
“In recent history, buyers would look at homes and return
six months later to find the same home was still on the
market,” he said. “Now if buyers hesitate, the house is often
sold by the time they come back. And each time one sells, the
next one comes on at a higher price.”
Sales remain less than the record reached from 2005 to
2007, said Leibovitch of Rodeo Realty. In Beverly Hills, where
celebrities including Sharon Stone have homes, first-quarter
transactions for properties priced $2 million and higher were 40
percent below the 65 homes sold in the third quarter of 2005,
and in Brentwood the 25 purchased were 49 percent below 2007’s
second quarter, according to DataQuick.
Too Few Sellers
Deals are being held back in part by a shortage of willing
sellers. Nationwide, about 2.37 million existing homes were
listed for sale in March, the fewest for the month since 2005,
the year U.S. home sales reached a record 7.08 million, the
National Association of Realtors reported April 19.
“We could have twice as many sales if we had more
inventory,” Leibovitch said.
A total of 19,284 houses and condominiums sold in Los
Angeles and five other Southern California counties in April,
DataQuick reported yesterday. That was down 3.4 percent from
March, and 21 percent below the average for April since 1988.
Jack Massopust listed his 92-year-old father’s Brentwood
home, which boasts views of the city, the Pacific Ocean and
Catalina Island, on April 3 for $1.55 million. Within about a
week, more than 100 shoppers had come to three open houses, and
the 3,200-square-foot (300-square-meter) house, which
Massopust’s father bought new in 1960, had received 11 offers.
Eight were at or higher than the asking price.
‘Very Surprised’
The property, listed through Mary Lu Tuthill of Coldwell
Banker Previews International in Brentwood, is in escrow,
expected to close May 23, for about $1.705 million. The
purchasers agreed to a “buy as is” condition, Massopust said.
“I have always appreciated the location and the view,”
said Massopust, 64, a retired transportation engineer for the
city of Los Angeles. “That’s in my opinion what sold the house
for that price. But I was still very surprised.”
Sales volume for homes priced $5 million and higher at all
of Coldwell’s West Los Angeles offices was up 35 percent this
year through May 8 from a year earlier, according to Joyce Rey,
the Beverly Hills-based head of the estates division at Coldwell
Banker Previews International.
Tuthill, who also brokered the sale of Lynch’s house, said
an increasing number of homes sell within a week of being
listed. One 6,000-square-foot property on Tower Road in Beverly
Hills, in escrow and scheduled to close by the end of the month,
came on the market at $7.295 million and within a week received
five offers, the highest of which was for more than $2 million
greater than the asking price, Tuthill said.
Speculators Back
The increase in demand for high-end properties is being
driven in part by investors looking to make a profit, a buyer
pool that’s been almost nonexistent the past couple years,
according to Rey. She said investors have grown to about 20
percent of the shoppers she represents since the beginning of
the year.
Throughout Southern California, the portion of investor
purchases was close to a record last month, and the share of
buyers paying cash was double the historical average, according
to DataQuick.
“The speculative buyer is back,” Rey said. “This is the
first time since 2007 that I have investor clients again.”
That’s buoying an increase in bids for homes that need
major work, she said.
One house on a 25,000-square-foot lot in Brentwood hadn’t
been on the market in more than 50 years and was considered a
“borderline tear-down,” according to Tuthill. The home, with
original 1930s kitchen and bathrooms, was listed at $5.495
million at the beginning of March and received five offers, the
highest of which was $5.6 million. After the seller countered at
$5.695 million, two bidders upped their offers to $5.7 million
and one jumped to $5.75 million, the eventual selling price.
Bubble Gum
“We were always joking that we were holding it together
with bubble gum and paper clips,” Tuthill said. “The initial
reaction was that this property was priced too high for recent
comparables. But what brokers underestimated is the pent-up
demand.”
A home on Bel Air Road in Bel Air came on the market in
mid-March at $10.25 million and the final purchase agreement was
signed for $1 million more. Escrow is scheduled to close next
week.
The mid-century house, once owned by the late television
host Art Linkletter, hadn’t been on the market in 40 years. The
buyer is considering a major renovation or tearing it down,
Tuthill said.
‘A Good Deal’
“Those types of properties are more in demand than ever,”
said Leibovitch of Rodeo Realty. “With interest rates as low as
they are, investors can really get a good deal.”
Competition is so fierce that one couple looking to buy in
Santa Monica had their daughters, ages 8 and 10, write a letter
and draw a picture of the home to try to persuade the elderly
seller to choose them over other bidders.
The neurologist and his wife, who asked not to be named
because they don’t want his patients to know details of the
purchase, agreed in mid-April to pay $155,000 more than the
$2.695 million asking price for the four-bedroom, three-bathroom
house, located two blocks from the beach.
Lynch and her husband, who’d owned their Brentwood home for
18 years, bought a smaller, three-bedroom house in the West Los
Angeles neighborhood of Rancho Park, because they now spend
about 40 percent of the year on the Hawaiian island of Kauai.
They’re relieved they decided to act now, she said.
“We didn’t really have to sell,” Lynch said. “It was
more of a lifestyle choice, a question of where do we want to be
10 years from now. But with this type of response, it seemed
like it was meant to be.”
To contact the reporter on this story:
Nadja Brandt in Los Angeles at
nbrandt@bloomberg.net
To contact the editor responsible for this story:
Kara Wetzel at
kwetzel@bloomberg.net
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