Realtors Predict high luxury for 2005

by David Hall

High atop downtown San Diego’s Symphony Towers nearly 100 Realtors from around the county gathered early Dec. 2 to discuss their expectations for the upcoming year.  The event, sponsored by Riviera Magazine and Alternative Strategies, was promoted as the “2005 Real Estate Forecast: The Year of Luxury Living.”

Following an introduction of the event hosts, keynote speaker Eric Haskell, professor of French and humanities as UCSD, informed and entertained Realtors on the origin and historical significance of modern definitions of Luxury as an idea cultivated in the French court of Louis XIV.  Delving into ideas of extravagance, indulgence, lavishness, magnificence and sumptuousness, Haskell set the stage well for what would not be an analysis of the market as a whole, but rather a look into what has made San Diego one of the top destinations in the country for the super wealthy.

 Fittingly, Rancho Santa Fe was the first community discussed as K. Ann Brizolis of Prudential Realty California related in what specific part of the community certain packages of features could be expected.

“Those seeking an estate with acreage for horses and riding, a guest house, staff house, pool and tennis court would be well suited in RSF Covenant,” said Brizolis.  “If a garden property is desired in a golf and tennis community then the Bridges or the Farms would be fitting.  However, if buying to tear down and rebuild is the desire of the purchaser than Fairbanks Ranch would be the most probable choice” as home to what Brizolis termed “McMansions.”

Del Mar was the next topic for review with Shawn Hethcock of The Willis Allen Company lending her insight into the long-prized town.  “With only 2,500 single-family homes and a local movement to limit growth, Del Mar has ensured that many of these properties can never be expanded to the size of luxury homeowners require to raise a family.”

Citing lack of inventory as a cause, Hethcock noted “La Jolla, Del Mar, and RSF can no longer be considered the only destinations for the high-end home buyer.  As the affluent home buying population increases and proximity to the ocean continues to be a priority, the small beach towns of north San Diego County have become destinations for those seeking a luxury lifestyle,” said Hethcock.

In discussing the transformation of Solana Beach, Hethcock identified the town as “a tight-knit community attracting affluent young families.”

These families have brought with them a trend of razing the original ranch homes of the ‘60s and ‘70s and replacing them with large custom homes designed by well-known architects and constructed by high-end builders.  “The resulting neighborhood, with its big ocean views, is a luxury home destination,” Hethcock said.

“The coastal town of Encinitas has been the focus of nationwide attention in its successful and award-winning metamorphosis from a home of hippies and surf bums, to a town now populated by affluent and successful ex-hippies and ex-surf bums whose definition of luxury includes the maintenance of a laid-back surf town feel,” said Hethcock.  “With new construction booming, luxury bluff-front properties co-exist with small public beach parks and access to world-class surf spots.  The surf generation of the ‘70s has grown up and can afford the best.  Their idea of luxury is to live in a fabulous home within walking distance of their favorite surf break.”

Hethcock went on to note both Carlsbad and Oceanside for their aggressive redevelopment efforts.  “With beach-front enclaves bustling with new construction, both Carlsbad and Oceanside will elevate into the realm of multimillion dollar oceanfront properties.”

The booming towns of coastal North County, however, are not the only attractions San Diego offers to its growing audience.

La Jolla, long know for its prime real estate and lavishly designed homes, recently set a new record price for a single home sale, said Maxine and Marty Gellens of Prudential.  The closing price came in at more than $18 million.

“However, the perception is that most homes in La Jolla come in over the $5 million mark, yet this is not the case.  Just over 40 homes have ever been sold in La Jolla over 5 million, though 15 of those transactions occurred in the past year,” said Marty Gellens.

Jim Patrick of Prudential California Realty offered a quick history lesson.

“Only 20 years ago, downtown San Diego was considered no-man’s land.  In the late ‘70s, Mayor Pete Wilson envisioned an environment in which one could “live, work and play,” and the master plan for transforming downtown was born.  Currently, there are 307 units available in the downtown market.  Of these, 26 homes are actively listed for more than $1.5 million.  Currently, eight units are pending and 17 more have closed in this price range in 2004.  “If you think downtown sounds intriguing now, consider this.  There are some 16,000 residential units in the marketplace today.  It is estimated that by the year 2030, there will be more than 53,000 residential units in existence,” said Patrick.  It would seem Wilson’s vision was right on the mark.

Patti McKelvey of McMillin Realty discussed the Eastlake area and its transformation from a community looked at by many as undesirable to a booming area that’s rapidly developing homes with the kind of amenities rivaling prestigious Rancho Santa Fe estates.

One thing each speaker made clear throughout the event was that the strength of the real estate market in San Diego is in direct proportion to the desire of the wealthy to live here.  And, wealth craves luxury.  But, what is luxury?  One Realtor perhaps answered that question best with a quote from Gucci.  “Luxury is what lingers long after the price is forgotten.”