New Benchmark
“The next benchmark will be $200 million,” Rappaport said. “This is a very small segment of the market that very few can afford but they rarely change hands, and when they do, it’s an opportunity.”
Last month, a Beverly Hills compound once owned by William Randolph Hearst went on the market for $135 million, making it the highest-priced residence for sale in California, according to listing broker Hilton & Hyland.
The boom in high-end real estate coincides with the slowdown in the broader housing market as tight credit, slow wage growth and higher prices and borrowing costs put homeownership out of reach for many Americans.
Purchases costing $1 million or more, representing 2 percent of sales, rose 7.8 percent in March from a year earlier, according to the National Association of Realtors. Transactions for $250,000 or less, which represent almost two-thirds of the market, plunged 12 percent in the period as house hunters found few available homes in that price range.
Sales of more than $100 million, while rare, underscore the growing gap between the rich and poor, said Jonathan Miller, president of New York-based appraiser Miller Samuel Inc.
“The average citizens in the U.S. are looking at this stuff like it’s happening on another planet,” Miller said. “It’s not a proxy for the remainder of the market, it’s a phenomenon happening to a tiny fraction of the top 1 percent. It’s a few dozen people paying these kinds of numbers.”