$20 million Bay Area home: What you can have in the ultra luxury market

PALO ALTO — A few years ago, a little ranch home was perched on just over an acre of rolling grass and oak trees in Palo Alto.

A San Francisco investor saw something more than a rancher: the perfect dirt for a rare, nearly $20 million hillside estate.

“It’s a stunning piece of property,” said developer David Dossetter.

92593 SJM L BIGHOUSE 1002 90 011 $20 million Bay Area home: What you can have in the ultra luxury marketSince 2014, Dossetter and other investors have poured millions of dollars into a speculative house that just hit the market — a 13,500-square-foot mansion with 7 bedrooms, 8 full baths, 4 kitchens, a wine cellar, movie theater, double-infinity edge pool, cabana house, butler’s pantry and garage apartment, generously outfitted with numerous and sundry hand-crafted and high-tech accoutrements.

The home, three miles south of Stanford University, is empty, waiting for the right match with a tech entrepreneur, foreign executive or Powerball winner. And for just $19.95 million, it could be yours.

The mansion offers a glimpse into the very top of the country’s priciest real estate market.

More than 400,000 homes have sold in the Bay Area since 2012, the start of a record-breaking run of increasing home prices, but only 385 cost more than $15 million, according to data from Zillow and CoreLogic. The asking price for the new estate is about triple the average sale — $6.7 million — for a home in the nation’s wealthiest zip code in Atherton. It’s nearly five times as expensive as the average home in the country’s third most exclusive district — Old Palo Alto, Professorville, and Crescent Park in Palo Alto.

About 700 Bay Area homes have sold for more than $10 million since 2012, according to a Zillow analysis. Estates fetching between $15 and $19 million typically get a buyer a 5,100-square-foot mansion on a 10,000 square foot lot.

Wealthy buyers also have been active in the market for homes over $30 million — about 200 estates in San Francisco, Oakland, San Jose and their surroundings have topped that price, according to the real estate site.

By comparison, the median price for a new single family home in the super-heated Bay Area comes in at a mere $942,000. The median home value in Palo Alto — boasting strong schools, sunny weather, and quick commutes to Stanford University and tech and banking headquarters — is about $3.2 million.

Aaron Terrazas, senior economist at Zillow, said high end homes, typically more than $10 million, are difficult to price because they have so few comparable spaces. Luxury estates come with one-of-a-kind features, and buyers often have specific, non-negotiable demands.

“At those very high price points, it’s a different market,” he said. “Not only are the homes more unique, so are the buyers.”

The developers bought the property on the 4100 block of Old Adobe Road near   Arastradero Road and Foothill Expressway in February, 2014. The high value of the land, assessed at $3.9 million, made it unprofitable for developers to build a collection of more affordable homes —  even just a few multi-million dollar units.

“We could use smaller houses,” said Michael Dreyfus, agent with Golden Gate Sotheby’s International, “but it just doesn’t work out for builders.”

Dreyfus has spent nearly three decades representing buyers and sellers in the wealthiest enclaves of Silicon Valley. The typical Santa Clara County home now stays on the market less than a month before finding a buyer.

But buyers in the ultra-luxury market can wait and pick and haggle from a world of housing opportunities, agents say. They fret little about multiple bids, late night contract writing and contingency waivers.

“Your buying pool is way smaller,” Dreyfus said. The typical net worth of a buyer would be more than $30 million, he estimated, a tiny fraction of the population.

Dreyfus put the home up for sale in June. It’s set in the foothills, near horse farms, hiking trails, gated estates and a few tech headquarters, including electric vehicle maker Tesla. New, high-end construction has swept into the neighborhood, encouraged by the booming economy, large lots and more permissive land use codes.

The rugged terrain allowed architects to build into the side of the hill, offering big, lighted spaces technically considered basement space by city planners, Dossetter said. The designation allowed for a larger and more elaborate space.

The estate has all the features expected in a $20 million home and more, Dulcy Freeman, agent for Golden Gate Sotheby’s, said during a recent tour of the property.

Work from local artisans fills the spaces — a hand-worked copper fireplace accent and kitchen hood from a Redwood City furniture maker, custom chandeliers from a Healdsburg shop, gates and railings forged in Scotts Valley.

Oversized windows slide open to usher in northern California breezes, and provide a wide, walk-through transition from indoors to out. Built-in heaters lift the evening chill from the patio.

Downstairs holds a billiards room, limestone-lined wine cellar, workout studio and sauna and steam rooms. “I feel like I’m in a spa,” Freeman said.

The 1.25-acre property was unusually large for Palo Alto, she said. “This is a secret find,” she added, although the marketing campaign is more shout than whisper.

The firm is promoting the property with a 20-page catalog, packed with buttery images of the property at dusk, tight shots of handmade furnishings and aerial photos of surrounding trails and estates. A second brochure includes a video player, with short clips offering gauzy, hovering details of the craftsmanship.

Several groups and individuals have toured the property. But the right match is still waiting.

“No one needs a $20 million house,” Dreyfus said.

But he’s betting someone will want it.

Article source: https://www.mercurynews.com/2018/10/03/20-million-bay-area-home-what-you-can-have-in-the-ultra-luxury-market/

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