By Bess Hochman
While many other aspects of the economy have been uncertain, the luxury housing market in some of the largest, most desirable U.S. real estate markets is surging. Prices in these areas are generally exceeding expectations.
Many real estate agents believe foreign investors are the reason for this surge. Research experts also cite a strong U.S. economy and “financial volatility abroad” for the draw of foreign buyers to U.S. cities like Los Angeles, San Francisco, Miami, and New York.
Los Angeles and San Francisco ranked #2 and #3 respectively nationwide for the highest price luxury home sales in the final quarter of 2014 according to the research center for Redfin. Miami holds the top ranked slot with a surge in buyers from Europe and South America.
Price growth for 2014 was 12 percent for Los Angeles, 10 percent for San Francisco and a stunning 66 percent for Miami. The average sales price for luxury real estate in Los Angeles for 2014 was about $4.8 million and a whopping $8.3 million for Miami.
Foreign buyers see U.S. real estate as a hedge providing protection against inflation and the commodities market. They view real estate here as a safe investment with low political risk.
Out-of-country investors want to make purchases of very unique and irreplaceable structures that garner lots of attention. In Los Angeles, this means a home on a large parcel of land or condos that offer many amenities.
Branded condos are gaining popularity, especially with Asian buyers who are the number one buyers of U.S. real estate. These condos are offered by famous hotel chains, like the Ritz Carlton, and offer all the amenities of hotel living. They also offer a sense of stability that comes from a global brand.
Because foreign investors want a safer investment outside of their country, they are not worried about being involved in bidding wars or offering eye-popping amounts over the actual listing price. Many of the record sale prices being recorded are homes purchased by foreign investors.
Beverly Hills, Bel Air, Holmby Hills as well as Brentwood, Santa Monica, Pacific Palisades, and Malibu top the list of the most expensive neighborhoods in Los Angeles.
The most expensive home in Los Angeles and the nation is situated in Beverly Hills. Located on 25 acres of land, the home is 53,000 square feet. This estate is on the market for sale asking $195 million and for lease at $475,000 a month.
A Swedish technology entrepreneur purchased a Beverly Hills home for $70 million recently. The house boasts a candy room, separate vodka and tequila bars, huge car showroom and spectacular views!
Foreign buyers look for jaw dropping amenities in the homes they are buying. Many of these homes have multiple swimming pools, movie theaters, large wine cellars and elevators.
Luxury home sales in Southern California are hitting levels we have not seen before and it looks like foreign buyers will keep it surging.
For a free courtesy consultation, or information regarding mortgage brokers, contact Bess Hochman, a top Westside Real Estate Broker for more than 20 years. Bess is also distinguished by holding a law degree. This article expresses the opinion of the author. You are advised to consult attorneys & others experts specializing in the issues referenced in this article.
Contact Bess by phone at 310.291.4111 or email [email protected]
“Bess is a master negotiator!” says Michael Donaldson, attorney and author of “Negotiating For Dummies.”