NorthBay biz spoke with several real estate brokers who’ve been in the trenches during these tumultuous times to get their take on where the luxury real estate market has been, where it stands now and what’s on the horizon.
It’s safe to say that, even after weathering North Bay real estate prices in the last five years, our idea of high-end real estate is a little skewed here. Just try looking for luxury homes listed for more than $2 million, and you’ll not only find them scattered liberally throughout the region, but you’ll see more than a few listed for $5, $10, even $20 million and more. Can you say that about Bakersfield?
We all know housing here is expensive, and luxury housing is even more so. But the big question on many people’s minds seems to be: What’s going to happen next? Can home prices possibly return to their pre-recession highs?
NorthBay biz spoke with several real estate brokers who’ve been in the trenches during these tumultuous times to get their take on where the luxury real estate market has been, where it stands now and what’s on the horizon. They’ve offered their insights into where well-heeled buyers are coming from and what they’re looking for. And, in case you’re curious, we’ll check out a few of these remarkable homes and the breathtaking views, celebrity owners and deluxe features that make them stand out.
Marin County’s elegant estates
In some areas of Marin County, it’s hard to throw a rock without hitting a million dollar home offering the best of Marin’s outdoor living and indoor comforts. From the private, wooded compounds of Ross, the terraced, sun-splashed mansions of Belvedere to the quirky, Victorian charmers of San Rafael, there’s a high-end home to be found for every taste.
Villa Della Pace in Kentfield is one stunning example of Marin County lifestyle on the market this spring. Offered at $10.495 million, this multi-leveled, Mediterranean-style residence was designed to make the most of its wide-open views of Mt. Tamalpais to the south and Phoenix Lake glistening in the valley below. State-of-the-art, teak Nana walls let entire walls of windows be tucked out of sight, blurring the line between indoors and out.
Currently the home of San Francisco Giants pitcher Barry Zito and his wife, Amber, Villa Della Pace also offers a combined gourmet kitchen and great room for entertaining, a separate family room and a temperature-controlled wine cellar with seating for formal tastings. The terraced gardens include a pool, spa, outdoor fireplace and more entertaining space. A newly completed guest house, located over a three-car garage, was designed with the same high-end details as the main house.
Marilyn Rich of Pacific Union International/Christie’s Great Estates in Ross is the listing agent for Villa Della Pace and has been part of the luxury real estate market throughout Marin since 1993. She recounts that, in 2008, the recession and subsequent drop in home prices seemed to hit lower-priced homes in Marin first, followed by mid- and, eventually, high-end properties, with some luxury homes losing 15 to 30 percent of their values by 2010.
The outlook began to improve last year, as homeowners who’d been able to hold off on selling began dipping their toes back in the water. Rich has several properties she’s eager to introduce to her listings this season, including a Ross property listed at nearly $19 million and a Tiburon home for just under $10 million. “There haven’t been a lot of really exceptional homes for sale in the last few years, so it’s exciting to see them return to the market,” she says.
Recent data confirms that things are looking up in the county. According to Bay Area Real Estate Information Services, Inc. (BAREIS), a widely used multiple listing service in Northern California, the average sales price for a residential property in Marin County in 2012 was $879,000. This figure is up from $846,000 in 2011, but still way down from the $1.225 million average seen in 2007.
Rich is seeing certain trends take hold in Marin’s luxury market, where the majority of buyers are coming from either inside the county or from San Francisco. “The houses that are selling fastest and for the most money are turn-key properties: beautifully appointed, professionally staged and ready for immediate occupancy,” she says. Often, she adds, the most desirable homes are found in flat areas rather than in the hills.
There also seems to be a general floor plan that sells best. “Buyers appreciate the combination kitchen and family room space with doors that open out to the backyard,” she says. “It appeals to almost everyone.” With the America’s Cup races taking place on San Francisco Bay this summer, waterfront properties with a view of the action are also at a premium. “In the end,” says Rich, “it’s all about location and condition.”
Marketing multi-million dollar properties like these requires a specialized skill set and a large network both inside and outside the industry. Building an Internet presence for each property has become increasingly important, and agents will often create customized, interactive websites for their luxury listings, offering virtual tours and e-brochures for prospective clients. Agents can even track the traffic on these websites to further tailor their marketing plans. In addition to memberships in luxury home organizations and registries, and the use of traditional media advertisements, Rich sometimes employs more creative methods, such as holding invitation-only sunset cocktail parties for prospective buyers at the properties, as she did at the Zitos’ home.
Napa County’s new breed of buyers
For the last few years, the chatter about the sky-high price of ultra-luxury real estate in Napa County often centered on Villa Montana, the Calistoga property belonging to football legend Joe Montana and his wife, Jennifer. The 500-acre compound is an outdoorsman’s paradise, with a fully stocked pond, basketball and bocce ball courts, swimming pool and equestrian facilities, not to mention a 10,000-square-foot Italianate villa with every top-of-the-line amenity. A slow market forced the couple to drop their asking price from $49 million to $35 million in January 2012, and records show the property was removed from listing in September.
Today, there’s similar buzz around Villa Sorriso, a 650-acre property that sits on the Napa/Sonoma border and is currently listed at $29.9 million. Reported to be the home of actor Robin Williams, the 20,000-square-foot main house has five bedroom suites, a home theater, an elevator and cellars built for wine and art. There’s even a viewing tower to take in the spectacular views of the property’s vineyards, olive groves, lake and acres of protected open space. With the property’s size and price tag, many Napa Valley residents (and real estate brokers) are curious as to who the next owner will be and what it will mean for the market.
The Napa market took its share of hits during the recession but is still drawing luxury buyers from around the globe. Mike Silvas, owner of Wine Country Fine Properties in Napa, has been working in real estate since the early 1970s, first in his family’s agency in Southern California and now here in the North Bay since 1998. He remembers the market for luxury properties all but grinding to a halt in 2008. “Things weren’t moving because there just weren’t any buyers,” he says. “With no buyers, no one could figure out what the homes were worth, so prices fell. When they dropped to the point that buyers were willing to pay, then properties began selling.”
Silvas says the market began to improve in 2011, and last year’s sales were strong. According to BAREIS, the average sales price for a residential property in Napa County in 2012 was $542,000, up from $472,000 in 2011. The average in 2007 was $864,000. “This year has been really busy so far,” Silvas shares. “It’s like someone flipped a switch back on.”
Many of these homebuyers aren’t just Napa Valley residents moving into bigger digs as the economy improves. Some are buyers from San Francisco and the peninsula looking to invest fortunes made in the financial and technological sectors into second homes or investment properties. “Along with traditional second home buyers, retirees buy these properties with the idea that they’d move here later,” he says. “Now we’re seeing people use this as a major investment tool as well.” Napa Valley is also drawing well-off buyers from all corners of the world, including Canada, Australia, New Zealand and even China.
The Internet has been an important resource for reaching these overseas buyers and opening up new markets, thanks to websites like the International Multiple Listing Service, which lists homes for sale in multiple countries, and Proxio, which lets agents post listings in a variety of languages and currencies and find international properties for their clients. Among the most sought-after Wine Country amenities are a wine cellar, outdoor kitchen, gym, gated drive and home theater. “Some buyers are still coming in looking for a ‘gentleman’s vineyard,’ where they get the views of the land but a neighbor agrees to farm it,” Silvas adds. “Most are just looking for one to three acres of land, privacy, views and a pool.”
This spring, Silvas has represented a wide variety of properties, from multi-million dollar vineyard estates to condominium second homes on the grounds of the Silverado Country Club and Resort in Napa. He reports that sales at Silverado have picked up a great deal since administrators lowered the membership transfer fee for new owners from $70,000 to $40,000.
Sonoma County’s laid-back luxury
Don’t be fooled by the more casual lifestyle in Sonoma County. While the price tags on its luxury estates may average less than their counterparts in Napa and Marin counties, the area’s increasing prominence as a wine and food destination in its own right means that its Wine Country estates are garnering some impressive sales prices. Sonoma County’s average sales price for all residential property was $416,000 in 2012, up from $376,000 in 2011. In 2007, that average price stood at $627,000.
This growing reputation may be why Sunset magazine chose Healdsburg as the site of its 2012 Idea House, seen on the market this spring for $2.65 million. The 3,600-square-foot home was built with all the environmentally friendly and energy-efficient features you could wish for, without sacrificing the luxury amenities buyers in this price range expect: modern design with tons of natural light, easy access to the outdoor living spaces, panoramic views, a wine room, a dumb waiter and a guest house with its own kitchenette.
Also on the market for the first time is Top Ridge Lodge, a one-of-a-kind piece of old-fashioned Glen Ellen. In a story reminiscent of Jack London’s own, the home’s owners originally occupied a small cottage on the 26-acre property, nestled in the hills below Jack London State Park. In 2001, they completed work on Top Ridge Lodge, modeled after the European hunting lodges they had visited as a family when their children were growing up. Now listed at $3.695 million, the home has even been featured in catalogs for style makers like Williams Sonoma and Pottery Barn.
This 4,200-square-foot home boasts timeless stone and timber construction, century-old wood floors rescued from a Midwestern train station, a gourmet kitchen and unparalleled views of Sonoma Valley. The property also contains an eight-acre Zinfandel vineyard, stables, vegetable gardens, a lighted sport court and year-round creek.
Diane Krause, a real estate agent with Wine Country Group Realtors by Better Homes and Gardens in Sonoma, has been working in the Sonoma and Napa markets, particularly in luxury second homes, since 1985. She’s the co-listing agent for Top Ridge Lodge, with Tina Shone of Sotheby’s International Realty, as both are long-time friends of the owners.
Krause says the overall market for luxury homes has followed the rest of the market in its troughs in the last four years, but that demand is still there and seems to be growing, particularly for second homes. She’s seeing high-end homes that have been on the market for a while finally trading, with buyers more eager to seal deals because they aren’t sure what will happen with prices later in the year.
While Sonoma isn’t experiencing as much foreign investment as Napa County, Krause often works with clients from San Francisco, the South Bay and Los Angeles, who find themselves swayed by the valley’s charms. “Clients come from out of town looking for a property to use as a second home base, and then they fall in love with Sonoma,” she says. “They may keep an apartment in the city, but many of them end up wanting to relocate to Sonoma permanently.” These second-home buyers aren’t necessarily coming to Sonoma County to become winery owners, either. “Vineyards aren’t at the top of everybody’s list,” she says. “The demand is more for views and privacy than for vines.”
Krause has also seen a huge block of sellers who’ve previously bought large estates in the hills and are looking to move to something that’s smaller and closer to town—but without sacrificing style—especially as they get older. “Clients are often looking for homes that are very similar to the ones they’re coming from, only scaled down,” she says. “Homes with guest houses and pools on large parcels close to town are hugely desirable.”
Outlook for 2013
For now, the real estate industry seems to be in overdrive, with everyone interviewed for this article putting in some extra legwork while waiting to see what the summer holds and whether sellers come out of hiding. “I have a long list of clients who’d buy today if they could find that charming, quintessentially Sonoma cottage, preferably within walking distance of the Plaza,” says Krause. “Unfortunately, there are very few available and they get snapped up quickly.”
Rich says she’s encouraged by the number of luxury homebuyers she’s seen entering the market in the early stages of 2013, but it remains to be seen whether the supply of homes to match the higher demand will materialize. “We’re in desperate need of homes in the $3 million to $5 million range, particularly in Ross and Kentfield,” she says. “Right now, it’s all about knowing the inventory that’s out there and knowing your buyer profiles.”
