It's the tallest residential building in the world.

The international ultra-luxury market ended 2017 with a bang, especially in New York, with the most expensive sale of the year closing a few weeks ago -- a trio of penthouses at 432 Park Avenue to an undisclosed Chinese buyer for $91,125,498.

That transaction was quickly followed by the sale of two more penthouses to one buyer for $60.1 million, contributing to a total of over $583.42 million in sales at this one building throughout the year.

New York's Highest Sale in 2017

If you feel you missed out on the opportunity to live at the top of the tallest residential building in the world -- Penthouse 95 is still available, asking $82 million (contact me for further details.)

One of nine Bay Area sales over $20 Million in 2017

In the Bay Area, there were nine sales over $20 million in 2017, with the highest being $38 million for a new, modernistic home with magical Bay views on Pacific Heights' Gold Coast, the most expensive home in San Francisco's history.

Just south of the City the highest sales of the year were $30 million, paid for two properties -- a home on Faxon Road in Atherton, and a home in Palo Alto's 'Professorville'. Eight acres of land in Los Altos Hills sold for $25 million.

In Southern California, at least 53 homes sold at or above $20 million, with buyers including Beyonce and Jay-Z, Angelina Jolie, Matthew Perry, Kimora Lee Simmons, George Lucas, and Larry Ellison. 

Other buyers included businessmen Nicolas Berggruen, Sir Tom Hunter, Mark Walter, Stanley Druckenmiller, and Alan Salzman, heirs and heiresses such as Karen Lo, Kevin Washington, Evan Metropoulos, Cody Leibel, and Jennifer Greenberg Messer, various investors and developers, and the founders of Matches, Chrome Hearts, Maxfowles, the Bratz dolls, and Alo Yoga.

 

Offered by Coldwell Banker's Chris Cortazzo for $50 Million

Of all luxury markets in the US, the most excitement was in Malibu, with 13 sales between $20 million and $85 million (for David Geffen's compound) breaking multiple records. 

Last month, real estate broker Kurt Rappaport's own Malibu property was reportedly in contract for an astonishing $120 million to Canadian billionaire Daryl Katz -- the most recent report, however, is the deal fell through, leaving Malibu's nine-figure sale record to be broken another day...

As they say, some things never go out of style!

Now, to follow up on something I told you about in my January 2016 report -- the $300,000,0000 sale of the (newly constructed!) Chateau Louis XIV, developed by Emad Khashoggi (the most expensive residential transaction of all time.)

Take a fabulous 360 degree tour of the magnificent property here.

We've just found out who the buyer was -- it turns out he's also the buyer of the world's most expensive painting, which just sold a few months ago -- Saudi Prince Bader bin Abdullah bin Mohammed bin Farhan al-Saud.

What a year! Will 2018 break more sales records? Read further...

As we go into the New Year, the perennial question is: how will the luxury real estate market perform in 2018? 

First, let's look at overall economic conditions.

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On a macro level, it appears the national and world economies will be stable through 2018, barring unforeseen geopolitical events. Here are some key economic indicator forecasts, which are quite positive:

The Federal Reserve is forecasting 2.5% GDP growth and the Wall Street Journal Survey of Top Economists forecasts 2.6% -- similar to 2017.

National unemployment is predicted to drop to the 3.9% to 4.1% range, from the current 4.4%.

Global GDP is predicted to rise to 3.7% from the current 3.6% by the International Monetary Fund.

The Bay Area economy continues to break records. Its GDP is nearly $800 billion, making it the world's 18th-largest economy.

Salaries in San Francisco are the highest in the country (making it the third most expensive city in the world to employ a workforce, while New York has the overall highest cost of living in the US) -- and in November it reached an unemployment rate of 2.3%, its lowest in at least five decades! It stands with Austin as the second largest US city with unemployment under 3%. Incredible!

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Next is the issue of taxes.

There's been much debate about the impact of the new 2018 tax law on the market. Some forecasts, such as that of the Wall Street Journal’s Mansion Global, predict a dampening effect of up to 10% on prices in the most impacted areas, while also noting it will take some time to see how the various cross-currents play out.

The National Association of Realtors' latest forecast indicates a possible 5% price decline in high-cost states such as California and New York.

Will the negatives of the new law (loss of a lot of the property tax, state income tax and part of the mortgage deductions) outweigh the positives (possible repatriations of hundreds of billions of overseas corporate tax dollars, perhaps higher income for corporate employees and more liquidity in the high end)?

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With sales totalling nearly $8 billion, San Francisco's real estate market hit new highs in 2017, ending the year with a median sale price of $1,475,000 for single family homes citywide -- an increase of 13.5% compared to December 2016. 

In Pacific Heights and Presidio Heights, the median price for the last quarter of 2017 was $5.4 million, or $1,600 per square foot.

Taking everything into consideration, there are no indications that these trends should reverse in 2018. 

   

New York luxury real estate just reached a new all-time high with the sale of billionaire Vincent Viola's home at 12 East 69th Street, in contract for $80 million.

 At that price, the 20,000 square foot residence, built in 1884, will be the City's most expensive townhouse to date!

Can we expect to see more major townhouse sales in 2018? If so, there are some wonderful options currently available.

Asking $37.5 million, listed by George van der Ploeg

Only a few feet away, a neo-Federal style mansion at 6 East 69th Street just went on the market last week for $37.5 million.  Built in 1925, the six-story, 12,000 square foot property features an 1,800 square foot sunroom outside its master suite.

Asking $32.5 million, listed by Nikki Field

One block down, at 34 East 62nd Street, is an incredible opportunity for a newly constructed Upper East Side townhouse, asking $32.5 million.

The five-story, 9,200 square foot mansion was designed by HS Jessup Architects in a sleek update of the Beaux-Arts style, with French limestone facade, and dramatic slate Mansard roof.

Asking $39 million, listed by Modlin Group


An elegant Beaux-Arts mansion at 4 East 74th Street recently made headlines when it was rumored Nicole Kidman and her husband, country music star Keith Urban, were purchasing it for $39 million (they weren't.)

Asking $39 million, listed by Modlin Group

Completed in 1901, the six-story, 12,000+ square foot townhouse owned by hedge fund billionaire Marc Lasry has 16 rooms, a grand oak staircase, private outdoor patio, roof deck, state-of-the-art security system, and 10 fireplaces.

Past celebrity residents have included Michael Jackson and artist Marc Chagall.

One of America’s most historic estates in one of America's most historic enclaves has just sold to former Tonight Show host Jay Leno and wife Mavis for $13.5 million -- a rare example of the whirlwind world of celebrity real estate extending beyond New York and Beverly Hills.

Built in 1936, Seafair Estate in Newport, Rhode Island is a crescent shaped stone-clad mansion that sits right on the ocean cliffs. The 8-bedroom, 11-bath mansion features a carriage house, pool, tennis court, and private beach.

 After being interviewed in 2007 for an article on the future of San Francisco real estate -- at the time it was titled “Seven Megatrends" --  I've been honored, over the years, to make numerous media appearances and do interviews and presentations on the topic. 

In 2014 I updated the report to “Eight Megatrends: The Future of San Francisco” (I’m delighted to say that three years later it's still a top search result for "San Francisco real estate forecast"!)

Here we are in 2018, and with several speaking engagements coming up for my "2018 Real Estate Crystal Ball," I'm updating the report to “Nine Megatrends: The Next Ten Years in San Francisco”.

So, what is the ninth megatrend...

In a recent series of fascinating articles, leading tech forecaster Peter Diamandis (founder of the X-Prize, and chairman of Singularity University) writes about the unprecedented convergence of eight different technologies in this decade: artificial intelligence interacting with robotics, nano-tech, the Internet of Things, 3D printing, virtual and augmented reality, and new computational systems such as super and quantum computers.

This is very different than anything we’ve seen in previous decades, where one primary technology drove innovation -- the computer chip in the '70s, personal computers in the '80s, the internet in the '90s, mobile and search in the 2000s.

With demand fueled by tech growth, the Bay Area’s construction boom continues to the tune of about $20 billion (here is a fascinating look at the 75 largest projects, from airports to hospitals and transportation terminals, as well as office, hotel, residential and retail developments.)

Surprisingly, average Class A office rents, while high at about $80 per square foot, are much lower than other major cities, coming nowhere close to those in central Hong Kong -- four times higher at $323 per square foot!

 

The newest large-scale project was announced a few weeks ago, with Microsoft planning to revamp its main 643,000-square-foot Mountain View complex, which should be ready to occupy in December 2019.

It will be their smartest, greenest office yet with one hundred percent of the buildings’ non-drinking water coming from rainfall or on-site recycled water -- a first in Silicon Valley.

The SF Ballet Opening Night Gala has a Celestial Theme
- Image: ArtistAndrea, via Etsy -

As we head into 2018, the Bay Area continues its extraordinary tradition of philanthropy. I'm delighted to be supporting the San Francisco Ballet at its "Celestial" themed Opening Night Gala this month.

I'd also like to invite you to an event I'm co-hosting with Sandra Papale and Dona Crowder at The Infinity Penthouse, in celebration of Joanne Renna Douglas and Alfred Renna's new book, "Negotiating New York: Life, Love, and the Pursuit of Real Estate," which Shark Tank star Barbara Corcoran calls "a wonderful, life affirming story."

The book is must-read for anyone in the luxury real estate business (or who loves luxury real estate)! The event is on Wednesday, January 10th, 4:30 - 6PM -- please let me know if you'd like to attend.

Below is my calendar of charitable, cultural, entertainment, sporting and business events that I hope you enjoy -- I look forward to seeing you soon around town!

415.308.8184 | JoelGoodrich.com | BRE# 01028702