Home for sale, $165 million

Former Hearst estate tops all asking prices in mansion market

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August 03, 2007|By Mary Umberger | Mary Umberger,Chicago Tribune

CHICAGO -- On a recent afternoon, the Beverly Hills, Calif., paparazzi took to the skies.

Held at bay from their target by a long, gated driveway, they had to resort to helicopter fly-overs to nail their shot. In this case, however, the elusive celebrity wasn't a person - it was a house.

Not just any house, but rather the top dog of the realty moment. Its entry into the for-sale market July 9 merited a media stir because its $165 million asking price makes it the most expensive property in America.

At least, for now. It's a perverse reality that, while most of the U.S. housing market is practically slumbering, the competition to be the uber house - the top of the real estate heap - is thriving.

"The very top of the market is hotter than ever," said Laurie Moore-Moore, a Dallas consultant who trains real estate agents who want to work the luxury market. "For the flamboyantly wealthy, yes, there is a competition, to some extent, for the ultimate trophy house."

In other words, she says, when you're courting billionaires, it could pay to raise the price, not lower it.

So at least a half-dozen homes in America are for sale at $100 million and up, and the pricing one-upmanship seen in the last year has turned into a "how high can they go?" news event.

The front-runner, at $165 million, is Beverly House on 6.5 acres, a former home of publishing legend William Randolph Hearst that has been owned for the past 30 years by attorney-investor Leonard M. Ross.

Beverly House's price bested a Bozeman, Mont., ski aerie that had held the No. 1 spot for some months at $155 million, though construction on the spec home has barely begun.

The list goes on to include the Aspen, Colo., "ranch" of a Saudi prince ($135 million); Donald Trump's remodeled oceanfront mansion in Palm Beach, Fla. ($125 million); a residence modeled after Versailles in the Holmby Hills neighborhood of Los Angeles (also $125 million); and a 210-acre Lake Tahoe, Nev., estate ($100 million).

After that, there's a gap, with a cluster of homes at $75 million.

Real estate experts who regularly trek in this rarefied air say that generally, such homes might take a couple of years to sell. But they're confident that the extraordinarily wealthy - unfettered by such mundane concerns as down payments and mortgage rates - are shopping. The number of potential purchasers with such wealth isn't big, they say, but it's big enough.

"The list would be the size of a small-town phone book," said Moore-Moore.

Forbes magazine's annual tally of billionaires this year found a record 946 around the globe, and 178 of them crossed into billion-dollar territory in the past year. They're getting richer, the magazine said - their combined net worth climbed by $900 billion, to $3.5 trillion, which works out to $3.6 billion apiece.

A study released in June by Merrill Lynch and Capgemini estimated the number of "ultrahigh net worth individuals" worldwide with net assets of at least $30 million - excluding their primary residences and consumable possessions - grew last year by 11.3 percent, to 94,970.

"The rich are growing in numbers globally, and their wealth continues to grow, as well," said Moore-Moore, who heads the Institute for Luxury Home Marketing. "And they're putting more of their investment portfolios into second, third and fourth homes.

"Plus, the wealthy are increasingly becoming citizens of the world," she said. "If you look at the very wealthy in the Middle East, 80 percent own homes somewhere outside their country of residence. Among Europeans, 40 percent own homes outside their native country."

But if these top-tier homes aren't going to be primary residences, it's a given that the buyers will shop around a while, the agents say.

Palm Beach "is like a second, third or fourth home for people, so it takes longer to sell," said Cristina Condon, who has been marketing the Trump estate about a year. "Because nobody has to be here, it's a matter of if they want to be here."

Shari Chase, the listing agent for Tranquility, the Lake Tahoe property offered at $100 million, agrees.

"There's only a certain, thin layer of people in that stratosphere, but we are in an area that attracts many of the billionaires," she said. "Once you reach a certain price range, you can expect properties of this stature to be on the market for two years or more.

"We sold [what was then] the highest-priced residence in 1998, and that was offered at $50 million. It took 2 1/2 years to [get a contract], and then it took us two years to close it. They are lengthy transactions."

Mary Umberger writes for the Chicago Tribune.

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