Shades of the '70s: Multiple offers, quick resales, houses selling for more than their asking prices.
Whether it's because of impending tax reform or something else, it's all happening, especially on the city's Westside, where there are some surprising stories.
Like the one told by Bruce Nelson of Asher Dann & Associates in Beverly Hills:
"I just sold a house in Bel-Air for $5 million, and the buyer is going to tear it down to build another one."
Affects New Housing
Jeff Hyland of Alvarez, Hyland & Young in Beverly Hills tells of a house in Bel-Air that sold three weeks ago for $2.65 million and again since then for $3.1 million. "And it's a tear-down," he noted.
The hot market is also affecting new housing. Hyland represented a builder in the sale of a new house in Beverly Hills for $3.15 million--"without even a for-sale sign or an ad," he said.
He also listed a new house on the former estate of the late actor Harold Lloyd, and--as he tells it--"20 people already walked through the house, and I haven't even shown it yet. The landscaping isn't in. The crews are still there, finishing the house, but they can't keep the people out."
It's not exactly a bargain price, either, at $2.55 million.
Bought Before Completion
Similar things are happening elsewhere. Brian Sweeney of REMAX in Manhattan Beach said that in the South Bay, "there are lots of people buying new houses before the houses are finished."
And he cites a six-unit condo project in Hermosa Beach "that hit the market and in one day sold out at prices of about $200,000 each."
He also knows of four new houses in Manhattan Beach that were sold at prices of $450,000 and more the first day they were offered.
They were hardly a steal, but as William Cote of Cote Realty & Investment Co. in Newport Beach acknowledged, few real estate markets in the entire country can compete with the Westside, and Beverly Hills in particular.
Survey of Other Areas
"We have a lot of activity here but not at the level that is occurring up there," he said. "No place has the allure and fantasy--with the interest there of people in the entertainment industry--and the cultural and political diversity of Beverly Hills, West Hollywood, Malibu, Brentwood, Holmby Hills, Bel-Air and the canyons."
Only a few places even come close to the market activity in Beverly Hills, judging by a study by Coldwell Banker. In May, the firm tracked the price of a 2,000-square-foot, three-bedroom, two-bath house--deemed typical for a young corporate executive family--in cities all over the United States.
Seven cities exceeded the $300,000 price listed for Beverly Hills, but only one of these came anywhere near the short time--10 days--it was estimated that the Beverly Hills house would take to sell. That was Morris Township, N. J., with 14 days. (Newport Beach had a $300,000 price, but researchers said it would take 60 days to sell the house there.)
The only cities that did better than Beverly Hills in the "estimated-days-on-market" category were Torrance and Stamford, Conn. Each had seven days, but each had a house price of less than $300,000. Torrance was at $240,000; Stamford was at $295,000.
Price Records Set
The highest price was given for Greenwich, Conn., at $600,000. Yet, there are many houses in Beverly Hills and other places on the Westside that exceed that, including the highest priced single-family home in the nation: the $27-million Kirkeby estate in Bel-Air, which came on the market in February.
Some other price records have also been set lately on the Westside, despite Coldwell Banker's conclusion that the price for the 2,000-square-foot, Beverly Hills house has not changed since 1984.
John McCormick, manager of Rodeo Realty (estates division of Merrill Lynch) in Brentwood, said that four months ago, he sold a house in the Riviera section of Brentwood for $2.5 million. That was a record for the area until two months ago, when another home was sold for $8 million, he noted.
Who are the buyers? There is, from all reports, no influx of wealthy foreigners as there was a few years ago.
"Nope," McCormick agreed, "most of the buyers here are basic down-home Americans. And there are a lot of entertainment bucks. There's always that." Ron de Salvo of Merrill Lynch in Beverly Hills said, "There are some Saudis, but the buyers are mostly Americans, trading up, with a lot of cash."
There are apparently a lot of Westside home buyers in the "rich" to "super rich" categories outlined by a Congressional committee in July. "And they spend freely," Hyland observed. "When they vacillate about spending another $500,000, I just remind them that they can't take it with them (when they die), so they might as well spend it."
That partially accounts for what he describes as "the fever going around Beverly Hills," which has also manifested itself in an abundance of building and remodeling.