We’re here reporting from the Westin Oaks Galleria at the National Association of Real Estate Editors Houston conference where we’ve heard from some exceptional experts in second home and vacation real estate, including Natalie Binder of Telluride Rentals, Ben Jenkins of Land Advisors & Resort Solutions, and Matey Veissi, founder of Veissi & Associates.
Each of these professionals offered interesting perspectives on the vacation and second home market for 2014, which is one where buyers, developers, and investors are cautiously rebuilding after the economic downturn.
It had to happen sooner or later, especially with prices slashed and dashed by 40 to almost 60% in some markets. But sales of second homes, some vacation, most investment, shot up in 2011. The combined sales of vaca and investment homes was at the highest it has been in this country since 2005. The NAR says purchases of investment homes rose by more than 64%. Buyers rushed in to take advantage of those slashed prices and low finance rates, when, that is, they could obtain financing. Meantime, sales of vacation homes were up 7 percent.
National Association of Realtors chief economist Lawrence Yun said that investors have been swooping into the market to take advantage of bargain home prices, and the lure of rising rental income has beat out cash sitting idle in banks earning very little interest.
And get this: 41 percent of investment buyers purchased more than one property. Almost half of the investment home buyers paid cash for their purchases in 2011, as did more than 40 percent of vacation home buyers. While the second home purchases were up, sales of owner-occupied houses dropped by 15.5 percent in the U.S. in 2011 from 2010 as more people chose to lease rather than buy.
One more indicator that the bottom feeders are out shopping and picking up some great deals on second homes, even the wealthiest of the wealthy. Larry Ellison, the sixth-richest man in the world, has bought the 249-acre golf course estate of Edra Blixseth for $42.9 million, this according to records filed in Riverside County, California. Last known listing price: $55 million, which was a 27% reduction.
Agent Lisa Bessone of Christie’s International Real Estate on Tuesday confirmed the sale of Porcupine Creek, but declined to divulge the buyer or other details.
Documents obtained by The Desert Sun show a grant deed was recorded on Jan. 28 by Porcupine Properties and the paper/site linked it back to Ellison’s investment holding company.
Ellison was last reported by Forbes to have a net worth of $28 billion. And apparently likes tennis: he bought the Indian Wells Tennis Garden and its world-class BNP Paribas Open tennis tournament in 2009.
The estate has a most colorful history. It was owned by Yellowstone Club founders Tim and Edra Blixseth, and was a central focus of their bitter divorce and subsequent bankruptcy action in Montana. Edra sold the Yellowstone Club, considered the most exclusive private ski home development in the world — though right next door is a far better alternative, Spanish Peaks — to Boston-based private-equity firm CrossHarbor Capital Partners, LLC.
Porcupine Creek ultimately fell into the lap of a trustee for BLX Group, and hit the market early last year for $75 million. Like everything in this market, the asking price was reduced to $55 million.
The estate features an 18,430-square-foot Mediterranean-style main home with hand-painted ceiling murals, an amphitheater and a resort-style pool. There are eight two-bedroom guest houses, a gym, spa, an outdoor party grotto with a full-size stage, and commercial kitchens. The private home has been the scene for numerous charity events that often held 500 or more guests.