New Survey Shows Continued Strong Performance for High-Value Real Estate

Posted by Lisa Bessone — February 7, 2008

NEW YORK AND LONDON – (Feb. 8, 2008) – A  survey of the world’s leading luxury real estate brokerages that comprise the Christie’s Great Estates international network reveals that despite the widely reported downturn in housing, high-value real estate in many markets worldwide has sold in record numbers and at record prices.“Recent news stories about housing prices have failed to report on the robust sales achievements in the luxury real estate sector,” says Christopher Harrington, Chief Operating Officer, York Simpson Underwood Realty, the exclusive affiliate of Christie’s Great Estates in the Triangle. “The high-end category worldwide continues to outperform expectations. As of January 2008, luxury home sales in the Triangle have increased by 56% over January 2006 figures.”The sustained strength of the luxury real estate category mirrors the sustained confidence in fine art, as demonstrated by the history-making year-end results for Christie’s International plc, the world’s leading art business and parent company of Christie’s Great Estates. Christie’s global art sales totaled $6.3 billion last year. In February of 2008, confidence in the fine art market was underscored at London’s Impressionist & Modern Art Sale, which realized a total of $207.4 million, the second-highest total ever for an art auction in Europe. The top-selling lot, Pablo Picasso’s Femme au chapeau, realized $11,281,560, almost double its high estimate. Two days later, Triptych 1974–77 by Francis Bacon sold for $51.7 million, making it the most valuable Post-War and Contemporary work ever sold in Europe.The affiliates of the Christie’s Great Estates network report similarly strong first-quarter results in 2008. What follows are reports and comments from a sampling of Christie’s Great Estates affiliates on the vigorous state of their local luxury real estate markets.New York, New York:   The residential real estate market in Manhattan finished exceptionally strong in the fourth quarter of 2007, achieving a new record average price of $1,430,514 for Manhattan apartments, a 34-percent gain over the same period the previous year. The number of sales for apartments priced above $10 million tripled. “The factors that make our market healthy continue to provide stability, and we are seeing this positive effect most at the high end,” says Hall F. Willkie, president of Brown Harris Stevens.Westchester County, New York: Sales were up 28 percent from 2006 for homes priced above $2.5 million, according to Houlihan Lawrence, which recently closed on Cassiobury, a country manor last offered at $12 million and constructed of architectural elements reclaimed from a 16th Century English estate.Greater Tri-State New York: The Hamptons and North Fork reports that 50 homes priced at $5 million and above have sold, gone to contract, or had an offer accepted in the past two months, says Charles Manger of Brown Harris Stevens. A Greenwich estate in the exclusive Round Hill enclave, represented by David Ogilvy & Associates, sold for $30 million in January.Texas and Oklahoma:  In these oil economies, the Christie’s Great Estate affiliate brokerages reported record sales in 2007. Martha Turner Properties in Houston saw a 19-percent increase over 2006 with sales of homes valued at $1 million and above, which accounted for 16 percent of their total sales.California:  In January of 2008, Newport Beach achieved an all-time record with the sale of a $30 million home. In the fourth quarter of 2007, Pacific Union in San Francisco sold 33 residences for more than $3 million each, almost double the number for the same quarter in 2006. “All our high-end properties ($10 million and above) are selling for more than they would have a year ago,” says Jeffery Hyland of Hilton & Hyland in Beverly Hills. Hyland explains that there is too much money and too little luxury inventory.New England and Eastern Seaboard: “In our market, the specialty property or the generational asset, well-priced, is eminently saleable,” says Robert Borden, President of LandVest. “They are sold at record prices sometimes and notwithstanding what is reported in the general media.” In 2007, LandVest achieved state record sale prices for single-family homes in Vermont ($8.5 million), New Hampshire ($9 million), and Maine ($10.5 million). Lila Delman Real Estate in Newport, Rhode Island, reports that the company’s dollar volume is up 41 percent from 2006 to 2007, with an average sales price increase of 18 percent over the same period.Florida: In Palm Beach, sales have remained steady, with the number of single-family homes sold increasing by 12 percent in 2007 (compared to 2006) and the average price of a single-family house rising nearly 16 percent (compared to 2006) to $5.3 million in 2007, according to Brown Harris Stevens. “We, too, continue to see growth in the luxury market,” says Tom Bringardner, President of Premier Properties of Southwest Florida, Inc. “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 sold a $19-million Delray Beach 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 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 says. “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.”Midwest: In St. Louis, over the past six months, a total of 76 homes priced at $1 million and above sold, with an average of 107 days on market. The list-to-sales price ratio was 94 percent. “While purchasers remain cautious about the economy and spend more time in due diligence,” says MaryKay Shumway of Wisconsin’s Properties of Door County, “they are still extremely eager to purchase second homes in this area.”Mountain Resorts: In Vail, Sonnenalp Real Estate participated in seven transactions ranging between $5.3 million and $12.7 million in the past three months alone. These include two new records in January for the Beaver Creek and Bachelor Gulch resort areas. The first was for the highest price per square foot ($2,124) for any type of property in the history of the two resorts. The second was the highest aggregate price ever for a condominium or a townhouse ($9.37 million) in the same area. Telluride Real Estate found that Telluride, Mountain Village, and surrounding San Miguel County posted an all-time high for dollar volume, surpassing the record set in 2005. In Telluride Mountain Village, the company’s sales of single-family homes increased 32 percent over 2006, while gross dollar volume rose 46 percent. The average price of a home in Mountain Village was $3,825,907, an 11-percent increase over 2006.Telluride Real Estate closed on a $13.5-million mountain estate.Hawaii: “Due to the weakening U.S. dollar, Hawaii is attracting more international buyers,” says Caron Broederdorf-Hill, owner of Caron B. Realty in Honolulu. “During the last quarter of 2007, two of the four most expensive properties on Oahu sold to Japanese nationals.” On Maui, there have been 20 closed residential, land, and condominium sales since January 1, 2008, priced at $900,000 and above for a total of $43,852,000.Caribbean: “The high-end market is definitely the strongest performer of the island property market at this time, with both European and American buyers,” says owner Christian Wattiau of Sibarth Real Estate on St. Barths, who sold a US$22 million home at the end of 2007. Cap Cana, the exclusive Dominican Republic 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: “Our clients have been pleased to find turnkey properties available for immediate occupancy, evidenced by our successful closings in December and January in the $2–4 million price range.”Europe: “The fine homes and luxury apartment market is an international market,” says Marie-Hélène Lundgreen of Daniel Féau Counseil Immobilier in Paris, France. “The steady increase in the number of millionaires worldwide is acting as a demand accelerator.” In her market, Lundgreen saw a rise in the number of total transactions, and the higher the category, the greater the number of transactions recorded: a 50-percent increase between US$1.5 and $3 million; an 80-percent rise for properties valued between US$3 and $6 million; and a 450-percent leap for properties valued at US$6 million and above. From Cannes, France, Sylvain Boichut of John Taylor says, “In the best parts of Cannes, there’s no drop in prices or activity. Demand is steady and the stock of properties up for sale fails to meet it.” Palais Florentin and Palais Oriental realized a record €31.5 million. A Russian client recently acquired “Bagatelle” for €22 million and another property in the heights of Cannes sold for €21 million. Boichut adds: “All our agencies in the South of France register the same fervor.” Wüst und Wüst in Switzerland reports that the market prices in the Zürich area for exclusive properties at first-class locations have gone up more than 30 percent the last three years. The supply for high-end properties is still very tight.Oceania: “The share market and property market both overreact to the ups and downs, and for a short period, perception becomes reality,” says Ken Jacobs in Sydney, Australia. “At present, the premium end of the Sydney property market remains strong, which was demonstrated this week with a sale we transacted in excess of US$20,000,000.” Mexico, Central America, and South America: Las Ventanas Real Estate sold a penthouse at Mexico’s Las Ventanas, Rosewood Resort for a record US$7.5 million. The property was purchased in 2004 for US$3.5 million. “While a bit of slowing has occurred in Costa Rica,” says Molly Harris of Plantación Properties, “certain new buyers are emerging, most notably from Canada on the strength of their dollar.” In Rio de Janeiro, an 840-acre farm sold to a North American celebrity for US$3.5 million. “We are not only selling high-end properties to Brazilians but foreigners are discovering the beauty of our country as well,” says Patricia Judice de Araujo Esteves of Judice & Araujo.About York Simpson Underwood RealtyYork Simpson Underwood Realty’s (www.ysuhomes.com) mission is to provide the highest level of real estate and related services in the Triangle through a team of professionals dedicated to exceeding our client’s expectations and through active community involvement.

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