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Looking at the ultra-high-end housing market

Top-dollar properties are the ‘anchor tenants’ of residential neighborhoods

By Zach Todaro

A significant amount of the real estate analysis out there today is focused on the average or median-priced home. The purpose of such exercises is to establish metrics that are inclusive of the entire populace. There is, however, much to learn from focusing on a certain subset of properties.
My favorite slice of the pie is the ultra-high end of the market. San Diego County is very unique in that the most of a subject home’s value is in the land. If you were to look at, say the highest subsets of the Dallas market, those properties have a significant amount of value tied up in improvements (the structure). One would find that the ultra-high end in Dallas features everything, from 10-car garages to lavish gardens, and everything in between. Because space is limited and land expensive in San Diego, especially in the high-end coastal markets, property features are much more limited. Because of this, the high end in San Diego is considerably more relevant to the average homebuyer, in that most homes have very distinct improvements.
Large commercial properties rely upon anchor tenants, which are successful and well-known businesses. Anchor tenants not only pay the most rent, but also drive large amounts of traffic to the smaller, lesser-known stores. Top dollar properties are the “anchor tenants” of residential neighborhoods. They define what property features are in demand and draw attention to the neighborhood. For example, the most expensive homes in Coronado sit on the beach and bayfront. The beach vs. bay argument has been prevalent among the town’s citizens since the Hotel Del was built. It seems every year a new side of the island becomes more popular. The most expensive sale in the county in 2010 took place on the Coronado beachfront, ringing in at $10.5 million. 1063 Ocean Blvd., a four-bedroom, five-bath with approximately 6,300 square feet, only fed the beach vs. bay debate. Two months later, 527 Ocean Blvd. sold for $8.95 million. A beachfront condo at the Hotel Del then sold for $5.8 million. Last year was a good year for sellers by the sea. In December, 903 1st St. (bayfront) sold for $7.8 million. Stay tuned in 2011 to see if that last sale sets a new trend.

Listed below are the highest sales from 2010 in each respective neighborhood. Take note of any defining features that may be present in your current or future home. You’ll notice, for instance, on Coronado, many of these properties hold value in their location and view. Spending a ton of money on a house that has neither may not be the best investment. Even if you may not be looking to buy or sell in the multi-million-dollar range, keying into how major players in the marketplace spend their money can provide valuable insight.

La Jolla: 9882 La Jolla Farms Road. Six-bedroom, nine-bath home featuring 9,683 square feet. This property is set back from the ocean and has stunning views from its raised elevation. The property affords the owner a great deal of space and privacy, something you don’t commonly find in coastal locales. Sale Price: $10 million.
Rancho Santa Fe: 5901 Lady’s Secret Court. Seven bedrooms, eight baths with 10,552 square feet. Located in the Del Rayo Estates, privacy at this property is a key feature. Sale price: $9.575 million.

Del Mar: 1912 Ocean Front. Four-bedroom four-bath with 3,100 square feet. This property is literally on the beach and, judging by the square footage, that clearly plays a significant role in its value. Sale Price: $8 million.

North Park: 3117 28th St. Three-bedroom, four-bath with 2,344 square feet. This Spanish Renaissance-styled home looks over Morley Field. Built in 1931, the Mills Act designation certainly played into the high price tag. Sale price: $1.125 million.

Kensington: 4226 Middlesex Drive. Three-bedroom, four-bath with 2,000 square feet. This property features expansive canyon views from much of the deck and the backyard pool/patio. Sale price: $1.175 million.

Downtown: Bayside by Bosa, 25th floor. Three-bedroom, three-bath with 2981 square feet. This unit in Bayside, one of the newest and most popular buildings Downtown, has outstanding bay and ocean views. Sale price: $2.5 million dollars.

Mission Hills: 2226 Juan St. Three-bedroom, three-bath with 2,639 square feet. The upstairs deck has sweeping views of the city. Sale price: $1.478 million.

Point Loma: 809 San Antonio Place. Four-bedroom, four-bath with 4,990 square feet. This property is located on the bay, with water, marina, and Downtown views. This home is also Mills Act designated. Sale price: $4.15 million.

Zach Todaro is a Realtor with Willis Allen Real Estate, representing clients in the greater San Diego area. Zach can be reached by email at ztodaro@gmail.com and by phone at (619) 302-9239.

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