The Westside of Los Angeles - a rambling territory that includes the fashionable communities of Beverly Hills, Brentwood and Westwood, plus coastal Venice, Santa Monica and Pacific Palisades — is perennially hot. With celebrities, Fortune 500 executives and international entrepreneurs driving demand, the Westside is experiencing nearly unprecedented momentum.
Joyce Rey of Coldwell Banker Previews International, states, “The market for luxury properties is absolutely fabulous all over the Westside.” She reports that through September, 24 $20 million-plus properties closed, compared to 14 for the entire preceding year. Eleven of those eclipsed $30 million, compared with only five for all of 2013.
Rey marvels at the increasing role of overseas investment, barely a factor when she began her career. “They’re looking for safety of capital as well as a beautiful lifestyle,” suggests the celebrity-favored agent. Syd Leibovitch, President/CEO of Rodeo Realty, believes a majority of $20 million-plus properties are now purchased by international buyers.
Leibovitch also sees strong demand for tricked out Century City and Westwood condos, but notes prices, which suffered greater losses than single-family homes during the recession, still have room to grow. Rey cites a scarcity of product, noting, “New buildings are nearly sold-out and those in the planning or construction phase are still a few years off.” Jeff Hyland, president of Hilton & Hyland, believes pent-up demand for new luxury units will be satisfied by an impressive pipeline of developments across the Westside.
Nick Segal, president and founding partner of Partners Trust, reports overall volume of luxury sales on the Westside has declined 1 percent from 2013, following two years of ascending volume and appreciation. That modest adjustment doesn’t concern Segal, who suggests it translates into a healthy market with bankable consistency. “We’re seeing demand, we’re seeing investment, and we’re still seeing multiple offers for properties that are priced well.”
Segal reports virtually all losses suffered during the recession have been recouped, with some submarkets eclipsing peaks established in 2007, while Leibovitch claims prices for many ultra-high-end properties are now double those heights. Segal submits that the departure of speculators would be the precursor to market correction, but insists that
hasn’t started and their presence contributes to a healthy, sustainable market. Although many luxury transactions are cash deals, Segal is seeing banks increasingly more engaged, which he views as another positive indicator.
In addition to a more international clientele, Hyland sees a different type of buyer emerging in this market. “We used to see trust-fund people, now we’re seeing entrepreneurs that made it themselves,” says Hyland, who observes these clients aren’t necessarily frugal, but are savvy shoppers. “They’re not impetuous, they thoroughly vet properties and have the confidence to wait. But when they see what they want, they buy it.”
Hyland maintains Trousdale Estates in Beverly Hills, long a playground for celebrities and world-class architects, is the Westside’s hottest neighborhood. He reports 10 percent of Trousdale’s housing stock is currently undergoing complete reconstruction or major renovation, so style-conscious buyers can get the dramatic contemporary architecture typically offered on the hills above the Sunset Strip, but with Beverly Hills’ renowned city services. Jay-Z and Beyoncé are reportedly considering a 22,000-square-foot house there, listed for $85 million.
Leibovitch reports a very robust Westside market, particularly among properties priced at $20 million or more. “Price increases have been tremendous — much higher than in a normal market,” he says, citing appreciation of up to 30 percent in the course of a single year.
Addressing the increasingly diverse clientele, Bob Hurwitz of Hurwitz-James Company observes that “the Chinese are entering the market in a big way. Many Beverly Hills properties are receiving a lot of interest from Chinese parents buying a house for $3 million-plus for their kids to live while they are in school here.” Hurwitz stresses the need to understand subtleties and differing cultural tendencies; he utilizes an agent who is fluent in Mandarin. “One particularly expensive property I have listed has been shown almost exclusively to buyers from Mainland China.”