(Bloomberg) — A $115 million purchase of a duplex high above New York's Central Park in June ended a nearly two-year drought for the city's ultra-luxury real estate market.
The shutdown was ultimately a turning point. Less than a month later, a nearby five-story penthouse went for $135 million.
With more than four months of the year to go, home sales of $100 million or more are on pace to set a new record in the city. Billionaires around the world have seen their wealth boom, generating momentum for big home purchases. The pace of sales is fueling optimism among agents tasked with finding buyers for other prime listings across the US.
Nationwide, there have been six deals worth $100 million or more this year through the end of July, just three short of a record set in 2021. They stretch from Southern California, where an oceanfront property scored a state record at $210 million , in Aspen, Colorado — where a transaction this year crossed the nine-figure mark for the first time.
The pace of ultra-luxury deals isn't expected to slow down anytime soon. In Malibu, an agent is preparing to put a mansion up for sale in a private listing for $300 million, which would set a record for the most expensive home sale in the U.S. if it receives an offer at that level. Another agent in the area, Aaron Kirman, said he is working with several buyers looking for mega-mansions in Los Angeles or Malibu, and also has a pair of nine-figure listings, including a $115 million European-style villa in Bel. Air.
“I've had more billionaires call me so far this year for $100 million homes than I've had all of last year,” said Kirman, who is chief executive of Christie's International Real Estate Southern California. “They want what they want when they want it — and they're willing to pay for it.”
Read more: Malibu mansion to go on sale for record $300 million
While the pool of potential buyers is still small, high-end billionaires have seen their wealth grow over the past few years. In early January, the average net worth of the world's 500 richest people was $9.3 billion, according to the Bloomberg Billionaires Index. As of August, it was almost $9.9 billion, meaning a $100 million home purchase would account for only about 1% of their wealth.
Now, there are even more homes for them. As the fortunes of billionaires boomed, various projects for the wealthy began to be built, and many of these properties are becoming available. Plus, business titans including Jeff Bezos and Ken Griffin are getting even more strategic about their massive real estate portfolios, finding ways to snap up parcels of land in Florida to create even bigger estates for their families. theirs.
“There's clearly demand, which seems to be growing,” said John Gomes, co-founder of the Eklund Gomes Team at Douglas Elliman Real Estate. “There's definitely an upward trajectory, and we can double this year what we did last year.”
Billionaires on the bargain hunt
High listed prices will not mean that the property will always sell for that much. Both sales in New York ultimately went for less than the sellers originally asked.
The Central Park Tower transaction closed in June for about $60 million less than the $175 million Extell Development listed it for last year. In July, Vladislav Doronin shelled out $135 million for the top floors of a project he had developed, Aman New York. That figure was lower than the $180 million reported by another buyer agreed to pay for the unit in 2018.
While some billionaires are looking for relative bargains, others have very specific demands and are willing to pay to get what they want, said Fredrik Eklund, who worked with Gomes and Kent Wu to bring an undisclosed buyer to the deal. of Central Park Tower.
“They have their eyes on something and they just want it,” Eklund said. “They pay more or not – it doesn't matter.”
Some of the wealthiest homeowners have put together massive properties through multiple expensive sales. In Florida, Bezos PAID $147 million last year in separate transactions for two neighboring properties on Indian Creek Island and agreed BUY another for $90 million in April.
Jills Zeder Group founder Jill Hertzberg worked with Griffin to stitch together adjacent parcels on Star Island that cost $194 million combined. Now, she said, he's being offered double or even triple what he paid for the mount, but won't sell it.
“He's not interested,” she said. “Someone like him had the foresight when no one else was doing it.”
Master of the Universe Residences
Wealthier buyers are often interested in new homes, according to Hertzberg. But if they can't find one that a developer or resident is willing to sell, some are more open to tearing down buildings and starting over rather than renovating older properties, she said.
“It was when I first came to Miami Beach, people were renovating these old Mediterraneans, Art Decos,” Hertzberg said. “And then people started coming in with star architects who said, 'No, let's take it down.'”
She expects her $132 million listing of four adjoining homes on La Gorce Island in Biscayne Bay to close in the next few weeks, with one buyer buying three and another buying the fourth. The largest transaction will be just under nine figures.
For buyers looking for new construction properties, there are more options under construction. A penthouse at the upcoming Shore Club Private Collection in Miami Beach went into contract for more than $120 million in March. If it closes at that price when the building is finished in a few years, it would double the record for a Miami-area condo set by Griffin in 2015.
“The supply is finally coming,” Eklund said. “Every project that we're working on, we're making these kind of master-of-the-universe residences at the top.”