As usual, blaring headlines—“Prices soar in Aspen and Martha’s Vineyard as the Affluent Flee Megacities” read one recent entry in Fortune—have only told half the story. Any exodus from any city known for its expensive real estate is usually short-lived. So we went in search of the full picture, courtesy of experts like Natalie Todd, the beautiful resident Malibu real estate specialist with world-class firm Douglas Elliman.
“When Los Angeles’ shutdown eliminated showings, not to mention entertainment industry jobs that provide sizable incomes to tens of thousands of city residents, the luxury market entered the equivalent of a black hole,” Todd, who frequently deals with celebrity and high-net-worth clients, and multimillion-dollar listings, tells us. Hence the apocalyptic headlines. “During a lockdown, there’s no price discovery, which is why we saw a 43.5% drop in [second quarter] 2019 to [second quarter] 2020 sales, according to the Douglas Elliman market report.”
It turned out to be one of the shortest market dips in recent history however—which has gotten a lot less media attention. When Los Angeles reopened over the summer, “there was a release of pent-up demand, with surprising strength,” Todd reveals. “The city pivoted sharply into luxury, more than any other market. To its proponents, the strength of Los Angeles’ rebound indicates a market that just won’t quit. Over the past five years, Los Angeles and its surrounding areas have become more of an international destination because of the lifestyle they afford clients. Now more than ever, quality of life is very important to people.”
“Home” has become the focal point since the pandemic hit, Todd notes. “While being compelled to work from home has shifted everyone’s priorities, it has also prompted the ultra-wealthy to make massive additions to their existing real estate portfolios in some of the most desirable and exclusive areas of California, especially Malibu…. Ultimate quality of life at every level on the home front has become the new obsession of the top 1%, now more than any other time in recent history.”
As a result, “This has been the strongest Malibu market we have seen in quite some time, with an increasing demand for larger properties,” Todd says, including those priced at $50 million and above. This used to be an extremely difficult bracket to get into; and while one still needs at least a nine-figure net worth, the current availability of real estate in this price range means that this an unparalleled opportunity to join what we’ve coined The $50 Million Club. And it’s a club whose potential members now have their pick of proper ties from Malibu to Monaco.
Just ask Alexander Kraft, the dashing Chairman & CEO of Sotheby’s International Realty France – Monaco, with 55 brokerages across the country. “The luxury real estate market in France is incredibly, surprisingly strong in the wake of the COVID-19 lockdown,” Kraft tells us. “Despite two months of complete lockdown and strict restrictions still in place all over the country, our results for the first two quarters of 2020 are virtually identical to those of 2019, and this despite zero activity during the months of March and April!”
The shift began in May when the lockdown ended in France, and “a true luxury real estate buying frenzy ensued; buyers were, and still are, eager to purchase a luxury home as a safe haven for their family, from both a practical and a financial point of view,” Kraft says. “Both classic secondary homes, be it villas on the ocean, chalets in the mountains, or mansions or castles in the countryside, and high-end primary residences in the cities with balconies, terraces or gardens, are highly sought-after, to not only maximize the quality of life, but also secure a safe long-term investment in these troubled times.”
Prospective members of The $50 Million Club have a portfolio of properties to choose from, including incredible estates in Cannes and the Côte d’Azur, the likes of which are seldom available in such proliferation.
And “with several hundred million euros under contract right now, this unexpected boom is set to last at least for the immediate future,” Kraft says. “Obviously, all bets will be off in case of a dramatic recession, but during prior crises, French luxury real estate has always proved to be less affected by downturns than other markets.”
This article originally appeared in the Nov/Dec 2020 issue of Maxim magazine