L.A.'s New Norm: $20 Million Homes and "People Are Swarming to Get In"
Global buyers are driving up prices as 10-figure listings move into neighborhoods no one would expect ("Who the hell would want to live in funkytown?"), privacy is at a premium, and even relatively puny properties (no pool!) prosper.
This story first appeared in the July 3 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
Five years ago, back in that idyllic era before the stratospheric explosion of the top of the Los Angeles real estate market, $20 million could afford a buyer a legitimate spread in any number of the city's highest-end 'hoods. These days? Not so much.
"With homes going for $50 million behind The Beverly Hills Hotel or $70 million on Hillcrest, what is $20 million anymore?" asks Josh Flagg, real estate agent at Rodeo Realty and star of Bravo's Million Dollar Listing. "The bottom line is you can't buy a true estate in Los Angeles for $20 million — by that I mean a home located on an acre of flat land, with the tennis court and all that. Up until the tail end of 2014, you might have been able to. As of now, those days are over."
Eric Lavey, a former talent agent with William Morris Endeavor and UTA who now is director of estates division at The Agency, seconds the notion: "A few years ago, $25 million or $30 million would have been a huge number, even somewhere like Beverly Park. Now it's something we're seeing in a variety of areas — and it doesn't necessarily guarantee the kind of sprawling compound you'd think of when you consider that number."
Case in point: Oak Pass Road, a street tucked behind The Beverly Hills Hotel that has housed such current and past residents as Demi Moore, Jon Voight, Mark Wahlberg and, more recently, Channing Tatum, who purchased Kevin Huvane's former home earlier this year for $6 million (Tatum and wife Jenna Dewan are in the process of tearing down the Cape Cod-style shingled spread and rebuilding). "There are only about 35 houses on this entire street, but two of them are now on the market for $23 million and $24 million," says Lavey. "Five years ago, $10 million to $12 million was a giant number here; now that's the middle ground."
Built in 1998, this renovated 8,000-square-foot home in Mandeville Canyon, with four bedrooms and a three-story guesthouse overlooking stalls for two horses, last sold for $7.6 million four years ago.
Oak Pass residents Irena and Mike Medavoy have listed their 9,000-square-foot, East Coast-style home for $15 million with Jade Mills and Joyce Rey of Coldwell Banker Previews International. If it sells for that price, the Medavoys will almost double their investment: They purchased the seven-bedroom home for $8.2 million less than two years ago.
Lavey points to two factors in these exploding values: One is L.A.'s emergence on the global real estate scene; the other is the fact that Oak Pass residents banded together a few years ago to convert their block into a key-entry street. "There are only so many private roads here, but suddenly, with L.A.'s surge on the global real estate scene and the number of tech people here, homes on a truly private street are skyrocketing in value," he says.
Adding to the allure is a family-friendly vibe. "Look at Channing Tatum — here's a guy who could have bought anywhere, but he chose this street to raise his family," says Lavey. "Why? Because people can feel normal here. It's not the cookie-cutter, Disneyland-mansion land you see in L.A. Houses have an architectural mix, and there's a true community vibe. Homeowner meetings are often barbecue pool parties, and there's even a permanent fruit stand in front of one of the homes. Residents fill it with fruit every week, and families buy strawberries and peaches or whatever and leave money on the honor system. All of it goes to charity. This kind of feeling is extremely rare in L.A."
You can forget the honor-system fruit stand on Weidlake Drive. In fact, the lack of any family vibe may be the entire point of the impossibly narrow, steep road that winds its way up behind the Hollywood Reservoir and has become the chosen perch for an elite set of high-end partiers. "This is way east of Cahuenga, and it's a hippie-feeling canyon road," says Coldwell Banker Previews International's Valerie Fitzgerald. "It's definitely off the TMZ-van path. The road probably isn't wide enough for its vans to turn around, anyhow."
Melanie Griffith and Antonio Banderas’ 15,000-square-foot Hancock Park house, which was listed by Brett Lawyer of Hilton & Hyland, sits on 1.5 acres; the now-divorcing couple added a neighboring lot in 2000 after buying the house for $4.2 million in 1999.
Back in 2006, when Eva Longoria purchased a Weidlake Drive five-bedroom, seven-bath home with underwater pool windows for $3.6 million, it was considered extremely off the beaten path, but in the ensuing years, developers have built megamansions that have skyrocketed into the mid- and high-teen millions.
"First you think, 'Who the hell is going to want to live in funkytown?' Then you start to look at it — the privacy and the views — and you start to think, 'OK, this may be really, really far from Beverly Hills, but suddenly, it starts to seem worth it,' " says Fitzgerald, whose listings include a 16,000-square-foot, fully furnished contemporary with an elevator, disco, gym, theater and a list of past renters — including Justin Bieber, Mark Zuckerberg and the American Idol cast — who have paid as much as $200,000 a month. Current price? $21.5 million. If you're looking for more elbow room, there's the option to purchase this pad along with three neighboring properties for $50 million.
"You're getting 50,000 square feet of living space in four homes all built in the last three to five years," says Fitzgerald. "We're seeing a lot of interest from young Hollywood people who want this kind of privacy while being close to clubs and recording studios."
Perhaps even more noteworthy, the $20 million mark has leapt west of the Interstate 405. "For a long time, it was extremely rare to see a home sell for more than $20 million in Brentwood, Santa Monica or the Palisades," says The Agency's Deedee Howard. "It would happen, but not often. Compare that to right now, when there are more than a dozen homes priced at $20 million and above that are west of the 405. That's a significant shift."
Earlier this month, NBCUniversal CEO Steve Burke paid $22 million for a home in the Pacific Palisades. Yes, the bluff-top spread comes with sweeping coastline views, 9,500 square feet of living space and a home theater and gym. But don't go looking for more than four bedrooms, and you can forget that afternoon dip: There's no pool.
This 8,100-square-foot Palisades home was built for film star Virginia Bruce and her husband in the late ’30s. Ambuehl cites "the Caruso effect" as a factor pumping up Palisades prices, as the developer remakes its downtown.
Howard's listings support the upward trend and include a four-bedroom contemporary with a three-story guesthouse that overlooks horse stalls in Mandeville Canyon. Asking price? $20 million for the 8,000-square-foot house. Compare that to another 8,000-square-foot, Windsor Smith-designed Mandeville Canyon home purchased by Gwyneth Paltrow and then-husband Chris Martin that had six bedrooms and eight bathrooms. It sold to the couple for slightly less than its asking price of $10,450,000 three years ago.
So, is it possible to score mega square footage and five-star amenities for less than $20 million? Real estate experts agree that you'll have to sacrifice that hilltop perch. Melanie Griffith and Antonio Banderas' house is located in the flats of Hancock Park and came on the market for $16.1 million in April. Last week, it sold — reportedly to Netflix chief content officer Ted Sarandos and wife Nicole Avant — for $15,947,000, a record price for Hancock Park by almost $5 million.
"This is an area where a $10 million sale would be a big deal a couple of years ago, but that's changing," says Stacy Gottula of Coldwell Banker Previews International. "Twenty million dollars in Hancock Park in the not-very-distant future would not surprise me."
"People talk a lot about the international buyer, but I'm seeing local families who will pay $15 million to $20 million now to live in the Palisades," says The Agency's Cindy Ambuehl, who cites listings such as the former Virginia Bruce estate. "I sold it to the current owner six or seven years ago for around $6 million. Now, we have that same property listed for $15.9 million, and this is not in the Riviera area. This is a home just west of the village. On my first caravan, we had back-to-back private appointments. Prices are going up, and people are swarming to get in."