Nine-Figure Home Sales Are Skyrocketing

Nine-Figure Home Sales Are Skyrocketing

  • Wall Street Journal
  • 02/6/24

It has been nearly 20 years since the country’s first $100 million home sale, but in some ways the market is just taking off: Since 2020, at least 24 homes nationwide have traded for $100 million and up, more than the total number of nine-figure sales during the entire prior decade combined. 

Los Angeles and Malibu, Calif., have also notched a string of major transactions, gaining steam as the wealthy sought space and privacy during the pandemic or picked up second homes. Last year, entertainment power couple Beyoncé and Jay-Z paid $190 million for a mansion in Malibu that set a California sales record—and sparked predictions that the $200 million threshold is within reach.

“Soon $100 million will be $200 million, that’s the way it’s going,” said Drew Fenton of Carolwood Estates in Beverly Hills. “We’re inching closer to it.”

Nationwide, the number of megadeals skyrocketed as the ranks of ultrawealthy individuals swelled around the globe. There were 3,194 billionaires in 2023, up from 2,170 in 2013, according to wealth research firm Wealth-X. 

In the past few years, the values of trophy homes around the country—disconnected as they might be from the rest of the market—also skyrocketed. So did the number of deals. In the 10 years between 2011 and 2020, there were 19 deals at or above $100 million. There were 22 deals over $100 million between 2021 and 2023. Those deals included properties that roughly doubled in value in a short amount of time.

Historically, California’s largest trades have also involved a small collection of trophy estates in Los Angeles, and to a certain degree, new spec homes. The size, provenance and location of L.A.’s iconic estates makes them rare commodities, Fenton said. “In Bel-Air, you can get 3 acres eight blocks from Rodeo Drive,” he said. 

Among them is Casa Encantada, a roughly 8.5-acre estate owned by late billionaire Gary Winnick and his wife, Karen Winnick. After setting a U.S. sales record when it sold in 1980 and again in 2000, Casa Encantada hit the market in 2023 asking $250 million. It is now listed for $195 million. 

Kurt Rappaport of Westside Estate Agency, who is marketing Casa Encantada with Fenton, said the price is justified by how infrequently properties of this caliber come to market. “There are a lot of people who own these properties who don’t want to sell,” he said. He pointed to Bezos’s 2020 purchase of the Warner Estate in Beverly Hills for $165 million, and Lachlan Murdoch’s purchase of Chartwell, an estate in Bel-Air, for roughly $150 million in 2019. (Murdoch is executive chairman of News Corp which owns Dow Jones & Co., publisher of The Wall Street Journal.) “If you look at who owns these great houses, some of them are generational,” Rappaport said.

Given the scarcity of singular trophy homes, savvy buyers have scooped up multiple properties in prime markets in recent years. Griffin, for example, has spent more than $250 million assembling land to build a mansion in Palm Beach over the past few years. In 2023, Bezos paid a combined $147 million for adjacent properties in Miami’s Indian Creek Village. “People have realized how precious land is in cities—there’s not a lot of land so if you find a particular piece that’s gorgeous, and you have the opportunity to buy next to you, why not?” Hertzberg said. 

Buyers have also paid a premium for more space and privacy. In Malibu, WhatsApp founder Jan Koum spent a combined $187 million for neighboring properties that he bought in two transactions in 2019 and 2021. Likewise, venture-capitalist Marc Andreessen and his wife, Laura Arrillaga-Andreessen, paid $177 million for a Malibu compound in 2021; a year later, they paid $44.5 million for another trophy home nearby. 


Story courtesy of Wall Street Journal

 

 

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