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No housing slump for super-rich

Sales and prices have never been better in the Platinum Triangle

July 07, 2007|Annette Haddad | Times Staff Writer

Joyce Rey stands in the soaring marble entryway of a palatial Bel-Air estate, ticking off its selling points.

Master suites? There are five of them, along with three living rooms, a gymnasium and a library. The dining chamber is "embassy-size," and the pool and gurgling fountains are on par with those at the finest hotels.

"There are six bedrooms under the tennis courts, and nine more above the 10-car garage," Rey tells a cluster of fellow sales agents scouting the place on behalf of clients. "And don't forget to see the kitchen downstairs. It's a commercial kitchen, and big enough to feed an army."

At $40 million, it's not for everyone. Yet Rey knows business has never been better in what's known as the Platinum Triangle of Beverly Hills, Bel-Air and Holmby Hills.

Soccer star David Beckham, Amazon.com founder and Chief Executive Jeff Bezos and actor Tom Cruise all bought here this spring, paying $22 million to $35 million for their own grand estates.

"Homes like this will always have buyers because this is where the rich want to live," says Rey, a trim platinum blond who looks at home amid the elegant surroundings in her sleek designer suit and peep-toe heels.

When Rey started selling real estate in the area three decades ago, it was known merely as the Golden Triangle.

Maybe it's time for another upgrade.

While much of the nation -- and the region -- suffers through a real estate slump, sales in the Platinum Triangle are stronger than ever.

In the first four months of the year, 23 estates selling for at least $10 million closed escrow in the area, according to records kept by local real estate agents, up from 10 last year.

By contrast, home sales in Los Angeles County fell 19.1% through May, according to research firm DataQuick Information Systems.

Property values in the Platinum Triangle area are also outpacing the county overall, climbing 9% from Jan. 1 through May 30, compared with a 3.9% rise countywide. Indeed, the continued strength at the high end of the market has helped mask flat or declining prices elsewhere, such as in the Antelope Valley.

Super-rich get richer

Before the recent cooling trend, of course, most Southern California homeowners saw their properties escalate sharply in value. Still, the numbers sound a bit more dramatic at the upper registers.

"Twenty million dollars is the new $10 [million]," says Cecelia Kennelly-Waeschle, a Beverly Hills sales agent who tallies "the list," the unofficial log of the Westside's high-end sales.

Real estate experts say sales are being fueled by several factors, including the growing ranks of the wealthy.

The richest 5% of the nation's population saw its average household wealth soar 40% (adjusted for inflation) from 1990 to 2005, according to census data. That contrasts with a 7.3% increase for middle-income families.

The super-rich are also getting super-richer: In 2000, 274 Americans on the Forbes 400 list had a net worth of at least $1 billion. By 2006, all 400 on the list had at least that much.

Rick Goodwin, who keeps tabs on the nation's luxe estates as the publisher of Ultimate Homes magazine, says the U.S. is going through another Gilded Age.

"The wealthy are growing exponentially compared to the rest of us and they've got the money to really fulfill their fantasies," Goodwin says. "One way they do that is by buying trophy properties."

And few places in the world tout as many real estate crown jewels as Beverly Hills, Bel-Air and Holmby Hills, which typically offer lush, pastoral grounds and sweeping city or ocean views.

"It's one of the last best places to own," says Jeff Hyland, a Beverly Hills real estate broker who chauffeurs his clients in a smoke-gray Bentley.

As the film and entertainment capital, Los Angeles also has the advantage of being an international destination. And thanks to a weak dollar, it's a relative bargain to wealthy foreign buyers.

$9.9-million fixer-upper

On a recent Tuesday, Hyland spent his day greeting fellow sales agents at an open house at the top of Hillcrest Road in the heart of the most sought-after ZIP Code -- Beverly Hills 90210.

With floor-to-ceiling windows overlooking the city and the Hollywood Hills, the mid-century modern is owned by the family of the late Nathan Shapell, the Los Angeles developer who created Porter Ranch.

Sitting on a one-acre lot, the house has a list price of $9.9 million. For that bargain price, it's a fixer-upper.

"We're looking for a buyer who is willing to spend around $2 million restoring it," Hyland says.

The Platinum Triangle wasn't always on fire. During Southern California's real estate downturn in the 1990s, Beverly Hills was among the first neighborhoods to slump. From 1989 to 1993 prices declined 40%.

"The last time, the high end was leading the charge on the way down," says G.U. Krueger, who in the 1990s was the chief economist for the California Assn. of Realtors. "Now things are totally different."

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