- The Washington Times - Monday, July 2, 2007

Housing is slumping in most markets, but sales of luxury homes are booming, thanks to raging bull bourses around the globe and the fast-rising incomes of the world’s wealthiest residents.

The record price for a luxury home in the United States recently surpassed $100 million when Schlumberger Oil fortune heiress Adelaide de Menil sold her mansion in Long Island’s East Hampton for $103 million to Ron Baron, the founder of Baron Funds Investment Co.

Luxury home sales are robust worldwide, stoked by strong economic growth, double-digit gains in foreign markets and 11 percent growth last year in wealth among individuals with more than $30 million in assets. Lakshmi Nivas Mittal, chief executive of the world’s largest steel company and the fifth-richest man in the world, recently bought a London estate for $128 million — beating the American record thus far.

“Although the U.S. housing market slipped overall in 2006, the luxury market has continued to boom as a result of rising wealth at the top of the demographic pyramid,” said Laurie Moore-Moore, founder of the Institute for Luxury Home Marketing in Dallas.

Sales of homes priced at $5 million and above jumped 18 percent last year and rose 31 percent in the first quarter of 2007, according to DataQuick, a market research firm. In the Washington area, pricey homes can be found in Potomac, Great Falls, Alexandria and on the water in Annapolis, among other places.

“At least five U.S. sellers are so optimistic that the luxury home market will stay strong that they’ve priced their homes at more than $100 million,” said Ms. Moore-Moore. “We may see a new record in the next 18 months or so.”

The most expensive home under construction is “The Pinnacle” at the members-only Yellowstone Club in Montana, she said. The club’s developer, Tim Blixseth, is offering that estate for $155 million.

Also for sale at $135 million is Saudi Prince Bandar’s estate in Aspen, Colo. A Los Angeles property called “Fleur De Lys” is being offered for $125 million, as is Donald Trump’s Palm Beach residence. “Tranquility,” a Lake Tahoe residence, is a relative bargain with a $100 million price tag.

The trend favoring the rich and tony can be seen even in California, Arizona and Colorado — three of the states hit hardest by mortgage defaults and foreclosures among middle-class housing investors and lower-income subprime borrowers.

Robby Carson, a luxury home specialist at Estes Park Realty of Estes Park, Colo., said he expects another record year of sales at the Colorado mountain resort, with more than $24 million in property listed.

“We’re extremely excited about the growth of the luxury market,” he said, calling it a “silver lining” in the otherwise moribund housing market.

Price also is no object in Montecito and Santa Barbara, exclusive Pacific Coast communities that are the choice of the Hollywood elite. Home sales there more than doubled last year to an eye-popping $219 million and are on pace to break that record this year, according to Distinctive Real Estate, a local firm providing concierge services for its well-heeled clientele in addition to managing home sales.

Mary Beth Woods, a Coldwell Banker real estate agent in Brentwood and Pacific Palisades outside Hollywood, said sales have slowed some from the hectic pace during the housing boom and wealthy buyers are being more cautious about the prices they pay, but she expects solid growth in sales and prices to continue.

“The market was in a frenzy, and homes were overbid,” she said, adding that now the market has slowed to a more “sustainable” pace.

In Arizona’s Valley of the Sun, sales of homes costing $5 million or more jumped from four in 2000 to 32 last year.

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