In the megahome market, $100 million is the new $50 million.
It wasn’t that long ago that a $50 million home sale was big news. Now, $100 million home sales are becoming a monthly occurrence.
Three homes have already sold this year for more than $100 million. The latest, according to the New York Post, is an 18-acre oceanfront estate in the Hamptons that sold for $147 million. The buyer was reported to be hedge funder Barry Rosenstein of Jana Partners.
The deal came just a few weeks after the sale of Copper Beech Farm in Greenwich, Connecticut. The 51-acre waterfront estate sold for a reported $120 million, although the buyer hasn’t been identified. That followed close behind the $102 million sale of the Fleur de Lys estate in Los Angeles. While the buyer in that deal also hasn’t been identified, several have reported that it’s a “secretive French billionaire.”
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The sales may signify nothing more than three different properties finding just the right buyer at the right time. But prior to the Big Three, there were only two existing-home sales in the U.S. believed to sell for more than $100 million. The first was the Palo Alto Loire Chateau in Los Altos Hills, Calfornia, purchased for $100 million in 2011 by Russian tech tycoon Yuri Milner.
The second was a home in nearby Woodside that was purchased last year for a reported $117 million. The buyer was reported to be billionaire Masayoshi Son of Softbank.
Other properties that sold for nine-figures were mostly land—like Ron Baron’s 2007 purchase of 40 acres of land in the Hamptons for $103 million. That land is also on Further Lane, where Rosenstein reportedly made his purchase of the $147 million property.
Yet the recent sales show that the rise of the $100 million home is no longer fantasy in the real-estate world.
“The trophy property phenomenon is not abating,” said Jonathan Miller of real-estate appraisal firm Miller Samuel. “And this is a global trend, this is not unique to the U.S.”
Indeed, nine-figure real-estate deals are part of a worldwide surge in megahome prices, driven by a jump in the number of billionaires looking for safer places to put their mounting piles of cash.
A 16,000-square-foot apartment in London just sold for $236 million, believed to be one of the highest—if not the highest— price ever paid for a piece of residential real estate.
Just a few years ago, sales of more than $80 million or even $50 million were big news in certain cities. Now, “those sales of $80 million or $90 million prices look quaint,” Miller said. And once one billionaire pays $100 million for a house, it’s easier for others to justify it—to the public and to themselves.
“It’s like they get the green light,” Miller said.
The most surprising fact about the $100 million home boom is that none of the sales was in New York City. While plenty of publications predicted a $100 million sale in New York City, the Big Apple has yet to see a confirmed sale at that price.
—By CNBC’s Robert Frank.