Pure real estate genius.

[mhurdle858]

According to Zillow (Mr. Doof's link), the house was estimated at 39.1 mil right before the sale.

I know that Zillow is not the end-all-be-all, but that is a $56 mil difference!

 

[GDaddy]

Okay, actual paired sales over a short period of time are not real common so I had to hunt these up.

Same property in SD County sold in 08/2004 for $8.75M and resold 22 months later in 06/2006 for $12m. Projecting the same rate of increase over the entire 48 months to 08/2008 would have ended up at $17,443,000. About double.

Here's another. Property sold in 09/2004 for $7M and resold in 03/2006 for $11,665,000. At THAT compound rate of increase the property would have ended up at $22M by 08/2008.

Now without getting into the specifics of these properties to see what other factors were going on with them, a couple datapoints don't mean much. But this sort of analysis is literally my day job IRL and I've run across hundreds of examples of this over the various price ranges and property types - so that's where my original opinion came from.

 

[GDaddy]

According to Zillow (Mr. Doof's link), the house was estimated at 39.1 mil right before the sale.

I know that Zillow is not the end-all-be-all, but that is a $56 mil difference!

Zillow is completely meaningless for anything other than a subdivision home or condominium, preferably in an inland location where all the site values are the same for miles in each direction. There are too many variables in play and too few datapoints to analyze a custom property with a high-value location on a regression analysis.

I should also mention that the level of subjectivity and ego involved in these transactions transcends all reason. That aspect of it cannot be overstated. Many of these buyers just DGAF. So asking for the decision making these people are engaged in to make sense is usually pointless.

 

[everysurfer]

So trump got some dumb Russian to buy at the absolute peak of the bubble

Noice

Trump also got his lawyer to pay his hooker bill

 

[Billy Ocean]

So trump got some dumb Russian to buy at the absolute peak of the bubble

Noice

Trump also got his lawyer to pay his hooker bill

Talent

 

[StuAzole]

Okay, actual paired sales over a short period of time are not real common so I had to hunt these up.

Same property in SD County sold in 08/2004 for $8.75M and resold 22 months later in 06/2006 for $12m. Projecting the same rate of increase over the entire 48 months to 08/2008 would have ended up at $17,443,000. About double.

Here's another. Property sold in 09/2004 for $7M and resold in 03/2006 for $11,665,000. At THAT compound rate of increase the property would have ended up at $22M by 08/2008.

Now without getting into the specifics of these properties to see what other factors were going on with them, a couple datapoints don't mean much. But this sort of analysis is literally my day job IRL and I've run across hundreds of examples of this over the various price ranges and property types - so that's where my original opinion came from.

Do 2008 sales.

 

[Mr Doof]

According to Zillow (Mr. Doof's link), the house was estimated at 39.1 mil right before the sale.

I know that Zillow is not the end-all-be-all, but that is a $56 mil difference!

Zillow is completely meaningless for anything other than a subdivision home or condominium, preferably in an inland location where all the site values are the same for miles in each direction. There are too many variables in play and too few datapoints to analyze a custom property with a high-value location on a regression analysis.

I posit that Zillow is great for the public record reporting of sale/purchase price and not so great for its estimates.

So maybe not completely meaningless?

 

[StuAzole]

Okay, actual paired sales over a short period of time are not real common so I had to hunt these up.

Same property in SD County sold in 08/2004 for $8.75M and resold 22 months later in 06/2006 for $12m. Projecting the same rate of increase over the entire 48 months to 08/2008 would have ended up at $17,443,000. About double.

Here's another. Property sold in 09/2004 for $7M and resold in 03/2006 for $11,665,000. At THAT compound rate of increase the property would have ended up at $22M by 08/2008.

Now without getting into the specifics of these properties to see what other factors were going on with them, a couple datapoints don't mean much. But this sort of analysis is literally my day job IRL and I've run across hundreds of examples of this over the various price ranges and property types - so that's where my original opinion came from.

For someone "in the business" you sure are having a hard time getting relevant economic data. Give me a day and I'll see what I can pull up.

 

[sizzld1]

Seriously. How complicated can one person make an exceedingly easy issue?

 

[GDaddy]

I actually looked through the 2004-2008 sales in the $20+M prices in LA County and didn't find any in 2008 that were resales from within a few years. Then I looked in SD County and dropped the pricing. If I had better examples I would have cited them. I didn't use the 2006 sales to fark with you guys, I used them because that's what there is.

 

[sizzld1]

I actually looked through the 2004-2008 sales in the $20+M prices in LA County and didn't find any in 2008 that were resales from within a few years. Then I looked in SD County and dropped the pricing. If I had better examples I would have cited them. I didn't use the 2006 sales to fark with you guys, I used them because that's what there is.

I appreciate the effort. It's not always easy to find the facts we'd like (categorically, not personally). All I know is I wish I had $100mil laying around to purchase a teardown. The dude, and his effed up family, never even ended up staying a single night in the place. Must be nice.

 

[GDaddy]

Okay, here's another one. It falls outside your narrow 2004-2008 window, but it still still fits the pattern I'm talking about.

Property in Bel-Air, built in 1936. Partially remodeled prior to 2001 and sold in 2002 for $6,875,000. That buyer did a major remodel and resold the property in 2011 for $21,500,000.

Property in Bel Air, built in 1937, sold in typical condition in 04/2007 for $7M, remodeled and resold in 03/2011 for $23m. Incidentally, it had been listed for a year prior to the 2011 sale for $23M before it did sell, which may mean that it wasn't worth that much in 2009 when it was first listed but the market eventually caught up.

 

[StuAzole]

Okay, here's another one. It falls outside your narrow 2004-2008 window, but it still still fits the pattern I'm talking about.

Property in Bel-Air, built in 1936. Partially remodeled prior to 2001 and sold in 2002 for $6,875,000. That buyer did a major remodel and resold the property in 2011 for $21,500,000.

Property in Bel Air, built in 1937, sold in typical condition in 04/2007 for $7M, remodeled and resold in 03/2011 for $23m. Incidentally, it had been listed for a year prior to the 2011 sale for $23M before it did sell, which may mean that it wasn't worth that much in 2009 when it was first listed but the market eventually caught up.

Be more simple. Look at 2008 listings and see how long they sat on the market and if they sold at original ask or not. There were very few under-ask deals made during the run up.

Don't you have access to Burns or Meyers or REE?

 

[GDaddy]

I actually looked through the 2004-2008 sales in the $20+M prices in LA County and didn't find any in 2008 that were resales from within a few years. Then I looked in SD County and dropped the pricing. If I had better examples I would have cited them. I didn't use the 2006 sales to fark with you guys, I used them because that's what there is.

I appreciate the effort. It's not always easy to find the facts we'd like (categorically, not personally). All I know is I wish I had $100mil laying around to purchase a teardown. The dude, and his effed up family, never even ended up staying a single night in the place. Must be nice.

I cannot stress this enough. The Florida duck may be exactly what people are saying it is - I have no clue. All I'm saying is that the pricing on these properties has generally moved to a different beat than the lower priced properties and people shouldn't automatically make the assumption that the change in pricing is the smoking gun. Maybe it is and maybe it isn't.

We see reports in the media about entertainment celebrities making money or losing money on their transactions. If they're losing money on a resale it may be in part because they bought poorly in the first place. It's really common for people to assume that it was the latest resale that is the distorted sale without considering the possibility that it may just as well have been the prior sale.

I see people get "good" deals all the time, at least as often as they get bad deals. I'm working on one right now up in the north end of the 90210 zip area where they paid 10% less than my appraisal of the property at the time of the 2016 sale, and this later valuation is going to come in 20% or more higher than that.

 

[GDaddy]

Okay, here's another one. It falls outside your narrow 2004-2008 window, but it still still fits the pattern I'm talking about.

Property in Bel-Air, built in 1936. Partially remodeled prior to 2001 and sold in 2002 for $6,875,000. That buyer did a major remodel and resold the property in 2011 for $21,500,000.

Property in Bel Air, built in 1937, sold in typical condition in 04/2007 for $7M, remodeled and resold in 03/2011 for $23m. Incidentally, it had been listed for a year prior to the 2011 sale for $23M before it did sell, which may mean that it wasn't worth that much in 2009 when it was first listed but the market eventually caught up.

Be more simple. Look at 2008 listings and see how long they sat on the market and if they sold at original ask or not. There were very few under-ask deals made during the run up.

Don't you have access to Burns or Meyers or REE?

Sale to list ratios on that class of property are meaningless. Seriously. Sometimes its not even the brokers who are establishing the list prices, and MOST of the listings never do sell due to overpricing. The days on market are not exactly meaningless but they're not always directly indicative, either. There are only so many buyers at these prices, and at these prices they can literally afford to be picky about what they want. Major remodels are common, even after a recent remodel, because the buyer liked the property but hated the decor.

One thing I do that most real estate brokers never do is I always look at the listings that didn't sell, to see what didn't work in those market conditions. They don't necessarily indicate to what is, but they pretty much do indicate to what isn't. Another thing I always do that brokers never do is I always research the sales history for that market segment going back 10 years to see what the long term trend did. I cannot presume to know what the current data means in isolation from those long term trends.


Some of these properties are being marketed without open exposure to everyone, sometimes because a buyer approaches the seller directly or a broker has a relationship with a buyer and seller and puts them together that way without ever listing the property.

I don't want to attempt to teach everyone here about the vagaries of the luxury home market. My original point was and still is that the real estate market as a whole does not march in lock step. The various little segments enter/exit these cycles at different times and their rates in increase/decrease vary tremendously from one end of the market to the other. When you're seeing a national or regional average all you're looking at is a horse that was designed by committee and ended up looking like a camel.

 

[StuAzole]

Okay, here's another one. It falls outside your narrow 2004-2008 window, but it still still fits the pattern I'm talking about.

Property in Bel-Air, built in 1936. Partially remodeled prior to 2001 and sold in 2002 for $6,875,000. That buyer did a major remodel and resold the property in 2011 for $21,500,000.

Property in Bel Air, built in 1937, sold in typical condition in 04/2007 for $7M, remodeled and resold in 03/2011 for $23m. Incidentally, it had been listed for a year prior to the 2011 sale for $23M before it did sell, which may mean that it wasn't worth that much in 2009 when it was first listed but the market eventually caught up.

Be more simple. Look at 2008 listings and see how long they sat on the market and if they sold at original ask or not. There were very few under-ask deals made during the run up.

Don't you have access to Burns or Meyers or REE?

Sale to list ratios on that class of property are meaningless. Seriously. Sometimes its not even the brokers who are establishing the list prices, and MOST of the listings never do sell due to overpricing. The days on market are not exactly meaningless but they're not always directly indicative, either. There are only so many buyers at these prices, and at these prices they can literally afford to be picky about what they want. Major remodels are common, even after a recent remodel, because the buyer liked the property but hated the decor.

Some of these properties are being marketed without open exposure to everyone, sometimes because a buyer approaches the seller directly or a broker has a relationship with a buyer and seller and puts them together that way without ever listing the property.

I don't want to attempt to teach everyone here about the vagaries of the luxury home market. My original point was and still is that the real estate market as a whole does not march in lock step. The various little segments enter/exit these cycles at different times and their rates in increase/decrease vary tremendously from one end of the market to the other.

How many $40M homes have you sold?

 

[sizzld1]

Here GDaddy, check this website. You can see every residential sale in Palm Beach County and define your own time frame and minimum sales price. Do 2004 to 2008 and then order the results by property address. I did it for sales that were $10mil and above. There are about 1500 results. Some include pseudo-commercial/apartment properties so watch out.

It takes a while to sift through them, but so far the most salient example I have seen is a mansion sold in August 2004 for $14.5 mil at 860 S. Ocean Blvd in Palm Beach. Resold in 2006 for the same amount and then sold again in November of 2007 for $16 mil. I've only made it through about 1/2 of the results, but I haven't seen any high-end properties that had multiple sales in the 2004-2008 timeframe that got anywhere near doubling in value. Most seem to be in the range seen above, about a 10% increase. Maybe you'll find some that doubled?


http://www.pbcgov.com/papa/Asps/SalesSrch/SalesSrchResults.aspx?srchtype=SS&ssrchtype=SUB&sproptype=R&sdtfrom=1%2f1%2f2004&sdtto=12%2f31%2f2008&spricemin=10%2c000%2c000&spricemax=150%2c000%2c000&ssqftmin=&ssqftmax=&srtfld=1&susetype=+&ssubdiv=&salefilter=AS

 

[GDaddy]

Okay, here's another one. It falls outside your narrow 2004-2008 window, but it still still fits the pattern I'm talking about.

Property in Bel-Air, built in 1936. Partially remodeled prior to 2001 and sold in 2002 for $6,875,000. That buyer did a major remodel and resold the property in 2011 for $21,500,000.

Property in Bel Air, built in 1937, sold in typical condition in 04/2007 for $7M, remodeled and resold in 03/2011 for $23m. Incidentally, it had been listed for a year prior to the 2011 sale for $23M before it did sell, which may mean that it wasn't worth that much in 2009 when it was first listed but the market eventually caught up.

Be more simple. Look at 2008 listings and see how long they sat on the market and if they sold at original ask or not. There were very few under-ask deals made during the run up.

Don't you have access to Burns or Meyers or REE?

Sale to list ratios on that class of property are meaningless. Seriously. Sometimes its not even the brokers who are establishing the list prices, and MOST of the listings never do sell due to overpricing. The days on market are not exactly meaningless but they're not always directly indicative, either. There are only so many buyers at these prices, and at these prices they can literally afford to be picky about what they want. Major remodels are common, even after a recent remodel, because the buyer liked the property but hated the decor.

Some of these properties are being marketed without open exposure to everyone, sometimes because a buyer approaches the seller directly or a broker has a relationship with a buyer and seller and puts them together that way without ever listing the property.

I don't want to attempt to teach everyone here about the vagaries of the luxury home market. My original point was and still is that the real estate market as a whole does not march in lock step. The various little segments enter/exit these cycles at different times and their rates in increase/decrease vary tremendously from one end of the market to the other.

How many $40M homes have you sold?

I don't sell properties, nor do I profess to be competent at selling them. I don't need to golf or prospect for clients or write contracts or arrange inspections or conduct caravans and open houses or take phone calls from anyone/everyone.

I value properties from the 3rd party perspective. That's all I do. And unlike the brokers, I actually need to be able to show my work and prove my point. I can't deal in "how I feel" because nobody on the money or legal side cares how any of the principals in the transaction feels or what their instincts are.

Moreover, my practice isn't limited to just one property type. I don't deal with just houses and homebuyers. In fact, I usually don't even appraise a residential property unless its a problem situation that the residential appraisers don't want to deal with. If I'm appraising a house it's usually because a residential appraiser referred the situation to me because they didn't want to attempt it.

So yeah, I generally look at more transactions specifically for value in a week than most brokers look at in a year. And I certainly look at a much broader spectrum of property types. I'm nearly always aware of more relevant data to a transaction than the average broker is precisely because I don't operate off the assumption that I already know the market.

 

[GDaddy]

Here GDaddy, check this website. You can see every residential sale in Palm Beach County and define your own time frame and minimum sales price. Do 2004 to 2008 and then order the results by property address. I did it for sales that were $10mil and above. There are about 1500 results. Some include pseudo-commercial/apartment properties so watch out.

It takes a while to sift through them, but so far the most salient example I have seen is a mansion sold in August 2004 for $14.5 mil at 860 S. Ocean Blvd in Palm Beach. Resold in 2006 for the same amount and then sold again in November of 2007 for $16 mil. I've only made it through about 1/2 of the results, but I haven't seen any high-end properties that had multiple sales in the 2004-2008 timeframe that got anywhere near doubling in value. Most seem to be in the range seen above, about a 10% increase. Maybe you'll find some that doubled?


http://www.pbcgov.com/papa/Asps/SalesSrch/SalesSrchResults.aspx?srchtype=SS&ssrchtype=SUB&sproptype=R&sdtfrom=1%2f1%2f2004&sdtto=12%2f31%2f2008&spricemin=10%2c000%2c000&spricemax=150%2c000%2c000&ssqftmin=&ssqftmax=&srtfld=1&susetype=+&ssubdiv=&salefilter=AS

If you've gone through a bunch of them and have only found one or two so far then you're kinda getting the gist of how common or uncommon these comparos are in real life. But yeah, if you can identify a couple more and they're showing a pattern then that's probably the pattern.

One word of caution, though. WRT individual transactions I often use public records as a lead but it's important to note that some transactions that show up in public records aren't arm's length sales. Depending on the format being used some of them *may* only involve a change in vesting, partnership agreements, estate issues or inter-family transfers, especially in the high dollar brackets.

It's also become fashionable in certain areas to obscure the actual sale prices, so if that kind of activity is present it can add to the easter egg hunt factor.

 

[Beerbelly]

It’s frivken money laundering you dens dipshit, good lord.