Mansion Mania : Record O.C. Sale Highlights High-End Market Surge
In what is believed to be the most expensive home sale in Orange County history, an 11,000-square-foot Laguna Beach mansion overlooking the Pacific Ocean sold this week for more than $14 million.
The sale highlights a statewide swell of million-dollar-plus home purchases, a niche that had been depressed for almost six years. However, for the last six months these homes have been snapped up in growing numbers as California’s economy turns the corner, according to a real estate data firm.
The sale of the Laguna estate, dubbed Pacific Reflections, included artwork and furniture. It was once owned by convicted stockbroker Boyd Jefferies and was sold by real estate developer Robert Breese and his wife, Beverly, to an unnamed out-of-state investor.
The Breeses had purchased the home from Jefferies for $6.25 million in 1986, just a month before he came under scrutiny by the Securities and Exchange Commission. He was eventually convicted for his part in the illegal “parking” of stock for insider trader Ivan Boesky and corporate raider Paul Bilzerian.
Indeed, sales of these high-end homes were up significantly across California as 705 buyers purchased homes for more than $1 million in the third quarter this year, a 35% increase from the same time last year, DataQuick Information Systems reported.
“This is the strongest sales pace we’ve seen since 1990,” DataQuick analyst John Karevoll said Thursday.
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Southern California led the state in these pricey sales. In Los Angeles County, 256 homes commanding prices of $1 million or more sold from July 1 to Sept. 30, up 44% from 178 such sales in the same quarter last year. Orange County followed suit with 61 homes, a 24% increase from the 49 sold in the same period last year.
Like other properties, high-end estates plummeted in value during the real estate slump, with some losing almost 40% of their value.
In Orange County, the largest sale in recent years, Hong Kong businessman George Yao’s lush 18,000-square-foot Harbor Island mansion, was purchased last April for $8 million, or about 60% of the $13.8 million it sold for in 1991.
Likewise, other large properties in north and central Orange County were on the market for much less than their purchase price, including Clothestime Inc. executive’s Mike DeAngelo’s 30,000-square-foot Cowan Heights home, which was reduced for sale earlier this year to $9.9 million from $22 million.
Although prices in Southern California have stopped their free fall, they have not increased significantly in recent months, brokers say.
Still, the increased sales of million-dollar homes could mean an uptick in prices next year, according to Barbara Amstadter of the Prudential-Jon Douglas Co. in Newport Beach.
“People are perceiving value for their dollar and they are buying,” Amstadter said. “I’m working with clients looking for $2-million homes and we’re having a hard time finding inventory for them,” she said.
The most expensive homes that sold in California last quarter were a Brentwood estate for $18.3 million, which may have included additional property, and a Santa Monica home that sold for $6.17 million.
In Orange County, during the study’s three-month period, the most expensive house sold was another Laguna Beach home on Crescent Bay Drive for $3.25 million. The most active city in Orange County this past quarter was Newport Beach, with 20 sales over the $1-million mark, a 66% increase from the 12 sold in the same period last year. The most active zip code in the California study was Beverly Hills 90210 of television fame, with 35 sales, followed by Brentwood with 29 sales. 15 of the California sales involved condominiums.
Analyst Karevoll said Southern California, which contains 60% of the state’s supply of these homes over $1 million, was hit hardest during the last real estate slump and is only now beginning to recover.
“We are just now returning to normal sales levels,” Karevoll said. Orange County, favored by many out-of-area investors for second homes, was hit less hard.
He added that the higher end of the real estate market is more volatile than the lower end, with prices often changing dramatically from month to month. And high-end homes are impervious to changes in interest rates or other factors that affect the rest of the housing market.
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Million-Dollar Club
Sales of million-dollar homes in Orange County during the third quarter were the highest for that period during the last six years:
1990: 55
1991: 30
1992: 24
1993: 22
1994: 45
1995: 49
1996: 61
Source: DataQuick
