January 14th, 2011
03:24 AM GMT
London (CNN) – Ok, you are unlikely to be in the market for a house that sells from $5 million to $150 million, but this 'uber-rich' housing market can be as good an economic barometer as any other. If the super rich are buying and selling in places like London or Rome then taxes are raised and real estate agents are hiring.
I spoke this week with Neil Palmer, CEO of “Christie's International Real Estate,” who is cautiously optimistic that sales in 2011 will be much higher than in 2010 and certainly than 2009.
Funny thing is, Palmer says the super luxury rich real estate market was not hit during the crisis because buyers couldn't afford these homes – there was just too much uncertainty for the ultra-rich to decide when to “pick up that second or third home.”
I just love the fact that people who buy houses north of $5 million tend to have more than one. It’s not the big purchase of a lifetime; it’s getting that extra home somewhere you spend a lot of time.
Christie's is currently selling Ringo Starr's ski chalet in Aspen for $4.5 million and the late Aaron Spelling's Hollywood mansion for $150 million. In between, there are homes in many major western cities. In Miami-Dade County alone, Palmer says the luxury home market in 2010 was up 30% in volume compared to the previous year. Sales in January 2011 were higher than January 2010 – a concrete example that the rich are spending again.
Christie's says buyers from the Middle East and Asia continue to push this market higher. But with domestic interest inside India and Beijing and Hong Kong so strong, developers there don't yet see a reason to advertise in the West, yet. It could be an untapped market for anyone selling international real estate.
London Sotheby's real estate arm says there are now plenty of buyers in the region but simply not enough stock. We were shown around a $13 million six bedroom home off Regent's Park. We were there for a little over an hour, yet there were two showings. One man did not care there was a TV crew around, he wanted to get on with his viewing.
Christie's is showing off a row of eight newly renovated townhouses in Regent's Park as well. Cornwall Terrace has homes reportedly on the market for more than $30 million.
I cannot imagine that kind of wealth. I really can't.
Of course, the Spelling mansion has been on the market for at least two years now and I can't see any chatter on the web that it’s had major interest. I don't know, but Christie's notes that Andrew Lloyd Webber's Trump Tower Duplex did sell, and it was listed at $19 million while a country estate in Tennessee sold last June with a listed price of $28 million. It’s not clear how much people actually paid for those properties.
As Sotheby's Charlie Smith said to me, if you “realistically” price your luxury property you will find interest.
Maybe Mrs. Spelling will take $130 million.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.