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Thursday, Feb 22, 2024

Luxury Homes Get More Commonplace

Luxury Homes Get More Commonplace By SHELLY GARCIA Senior Reporter In some ways at least, the rich really are no different. Record low interest rates and a flagging stock market in recent years, the same dynamics fueling mid-price homes, are also plumping up the luxury home market. Although it’s difficult to pinpoint the exact reason for the increase in expenditures on new luxury homes, many say that those with big money to spend are putting more of it into their homes now than ever. “Last year we built 90 $2 million homes,” said Jim Boyd, senior vice president at Toll Brothers, a Huntingdon Valley, Pa. builder that is developing a luxury home community in Moorpark. “Ten years ago, we had only done one or two, and five years ago we probably just did a handful.” In addition to Country Club Estates at Moorpark, a 216-home community which will be built around a 28-hole championship golf course, Toll is also planning a Chatsworth development, Indian Springs at Chatsworth. Prices for the homes begin in the mid-$900,000 range and can increase by hundreds of thousands of dollars depending on the options chosen by the buyer. Another builder, John Laing Homes, recently opened a luxury home division to cater to what it sees as a neglected market. “Generally what we’re seeing is a lack of supply in the marketplace, a good degree of confidence in real estate as an investment and very healthy interest rates,” said Tom Redwitz, president of the John Laing’s new luxury group. “And so people are feeling safer to step up to a more expensive home.” Among the first developments for the company’s luxury group is Castille at the Oaks of Calabasas, a community of 26 homes priced around $1.3 million to $1.7 million. Selling will begin this summer. Builders say they are limited in their luxury home efforts only by the availability of land in communities that can support such homes. “In Chatsworth, we’re adding onto an existing neighborhood, and building where there’s lots of million dollar homes,” said Boyd. “We were a little bit of a pioneer in Moorpark when we started grading three or four years ago, but we had a golf course, so we felt we could create our own community.” Fitting in Most times, however, builders say they design the housing to suit the market in which they are building. So even those known for their luxury homes, often can’t focus exclusively on the segment. “We certainly look at each land offering and see if the price makes sense,” said Barbara Stowers, vice president for sales and marketing at Taylor Woodrow Homes. “We have opportunity in Orange County, Riverside, San Bernardino and San Diego, and Newhall Land still has opportunities for builders, so it’s not like we’re completely out yet. But it’s one resource that’s in limited supply, and I’m sure that’s one of the biggest concerns with every residential builder.” Irvine-based Taylor Woodrow is building a luxury development in Orange County, but the company categorizes its local offering, Gallery at Dos Vientos Ranch in Thousand Oaks, as “executive housing,” a notch down from luxury in price and geared more to families for whom maintenance and simplicity are bigger priorities. With options, a Gallery home can cost upwards of $1 million, but most builders say the luxury category begins at that price and above. What will a cool million buy? In general, the homes are larger, as are the lots, and amenities can range from estate-like architectural details to exotic built-ins like professional level home entertainment systems. “People are getting a third to a half acre of ground, and if you were to see our houses, they feel like a million dollars,” said Boyd at Toll Bros. “We’ve got fewer garages facing the street, more courtyard type driveways and grand entrances. Most of our best selling homes have double staircases.” Think Tara in “Gone With the Wind,” picturesque courtyards and entrances well-recessed from the street. For those whose lifestyles lean to the more modern, there are elaborate, professionally designed home entertainment rooms that can virtually serve as a private movie screening area for the homeowner and guests, and home offices that are fully separated from the main house, perhaps even on a second story dedicated exclusively to workspace. “We’re seeing a greater desire to have them, and have them in different sizes and configurations,” said Redwitz of the types of home office spaces luxury home buyers are requesting. There has always been a market for luxury homes, which begin with pre-determined architectural designs and floor plans and then are customized and built to suit the owner. But the economy and demographics are changing the dynamics of the marketplace in much the same way that those factors have affected the home-buying market overall. Good investment As interest rates have dropped, buyers have been able to trade up to homes that were out of their reach even a few years ago. And builders say that new, luxury homes are seen as a particularly good investment by baby boomers in their peak earning years. “The value of homes around here has really skyrocketed, and a lot of people are opting to take their equity out of their existing house and invest in a luxury home,” said Marc McAlpine, a spokesman for Toll. “And the stock market has been so volatile, people are looking at a new home purchase as a pretty darn good investment.” Even the rich, with presumably more money to spare, have been moving away from the stock market and into safer investments like real estate. “We do see some shifting of assets,” said Howard Waddell, executive director of the American Affluence Research Center, a Pinecrest, Fla.-based organization that tracks attitudes of those with a minimum net worth of $500,000. “Just a year ago for two years the number one investment priority was capital growth. It’s not the case anymore. One thing we know about these people is despite the fact that they have a lot of money, there are not many of them that spend recklessly.”

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