Number of $100 Million Homes Surges in U.S.

Number of $100 Million Homes Surges in U.S.

Ten properties are listed at or above that price, up from three last year

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A penthouse at One57 in New York City was one of the three 2014 sales of $100 million or more. PHOTO: RAMSAY DE GIVE FOR THE WALL STREET JOURNAL


By LAURA KUSISTO
Updated April 30, 2015 12:11 p.m. ET

Four years ago, a Russian billionaire became the first person known to pay the unheard-of price of $100 million for a single-family home in the U.S. While breaking the nine-digit mark is still extremely rare, it is becoming slightly less so.

As of March 31, 10 properties are listed in the U.S. at that price or higher—in diverse locales ranging from the Florida Keys to Dallas, according to a report released Thursday by Christie’s International Real Estate. If they all sell at or above the $100 million mark, it will more than triple the number of such sales in 2014, when three homes sold at above that price.

The tiny slice at the top of the market is driven by forces largely distinct from the larger housing market underneath it: the increasing concentration of global wealth; the desire for a safe place to put capital; and the notoriety and bragging rights that come with owning one of a handful of the most expensive properties in the world.

“These are unique assets that only a handful of people in the world can own and they like to be able to say that they own them, not in an overtly public or garish way but to their friends,” said Dan Conn, chief executive of Christie’s International Real Estate.

The three 2014 sales of $100 million or more capture the range of properties that make up the elite category: A duplex penthouse atop the new condo building One57 in New York City; a 11.2-acre vacation property in the Hamptons area of Long Island, N.Y.; and a 50-acre waterfront estate in Greenwich, Conn.

David Ogilvy, president of David Ogilvy & Associates, who sold the Greenwich property, said the maximum imaginable price for unique properties has moved dramatically upward in recent years. “I listed and sold a beautiful property for $45 million 10 years ago and everybody just fell over dead. I thought that was my career signature,” he said.

Then, in 2013 he originally listed the Greenwich property for $190 million. He toured a number of billionaires, including from China and Europe, through the home but couldn’t get anyone to bite at that price. In early 2014 the house sold for $120 million.

Economists said it is difficult to compare the performance of the ultraluxury market to housing overall because the former can swell markedly with just a few dramatic sales. World-wide, luxury home sales—as defined by those over the $1 million mark—jumped 16% in 2014 from the prior year, according to Christie’s.

Still in many cities, the pace at which the luxury market is growing slowed in 2014 from 2013. In San Francisco, which had a 62% increase in $1 million-plus sales in 2013, such sales grew 19% in 2014, according to Christie’s.

In Los Angeles, New York City and London, luxury sales growth slowed to near zero, which the report attributes to lack of inventory.

In many places, the top end of the market is being driven by a few high-profile new condo buildings and can swing based on when those projects are finished and sales close.

In Miami, million-dollar-plus sales account for 6% of overall residential sales but 41% of the dollar volume. One could purchase 88 average homes for the top sale price of $28 million.

“The bar [on price] is being raised every single day,” said Nelson Gonzalez, a senior vice president at EWM Realty International in Miami Beach. Still, Mr. Gonzalez said that Florida developers are wary of crossing the $50 million threshold.

It is difficult to measure the depth of demand for units above $50 million and $100 million because it virtually didn’t exist a few years ago. Jonathan Miller, president of Miller Samuel Real Estate Appraisers, said that in the past many properties were listed at record-breaking prices and fell flat.

“A lot of the vanity listings that were above $100 million never sold.

They either came off the market or the prices were cut in half and then they sold,” he said.

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