Mansions that had languished on San Francisco’s Billionaire’s Row were finally snapped up last year. Well-known moguls from tech and finance poured money into real estate. Expansive estates in Silicon Valley drew publicity-shy billionaires who set up shell companies to shroud their identities.

In the nine-county Bay Area, 11,041 properties changed hands in 2012 with sales prices above $1 million, up 29 percent from 2011, according to real estate service DataQuick of San Diego.

Of course, around here, a million dollars doesn’t necessarily buy a mansion. That price tag can easily adorn a two-bedroom condo in San Francisco, a run-down ranch in Palo Alto, or a suburban tract house in Moraga.

“Virtually all home sales in some communities were in the $1 million-plus category,” DataQuick said, listing Ross, Los Altos, Atherton and Hillsborough as Bay Area towns where that was the case. Hillsborough had 422 million-dollar-plus sales in 2012.

Overseas cash

The real action was at the even higher end – 162 Bay Area homes sold for north of $5 million, DataQuick said. California notched an all-time high of 697 homes selling for over $5 million.

“In the prestige market (some sales) may have to do with where to park assets relative to other areas like the stock market and mutual funds,” said DataQuick analyst John Karevoll.

“One clear portion of the market that’s very active is buyers from abroad,” he said. “They’re coming here, they’ve got money and that money is in cash.”

The recovering economy, especially the tech sector, definitely has played a role in the luxury boom.

“The technology industry has done very well recently, which has created a wealthier pool of buyers,” said Jed Kolko, chief economist with real-estate site Trulia.com. “At the same time, with prices rising, there are more million-dollar homes than a year ago simply because of appreciation.”

Inventory of high-end homes is just as tight as at other price points.

Malin Giddings, a Coldwell Banker agent who focuses on luxury real estate, said: “2012 was an incredible year because there was very low inventory and very high demand.”

Just as with the regular market, high-end homes sold for less than their bubble-fueled heights. “For sellers who understand that values have taken a 25 percent hit, those properties are moving,” she said. “We are not back to pre-2008 prices.”

Who’s buying

Another impetus for sellers: A Jan. 1 hike in the capital gains tax.

“In Palo Alto there were quite a few sales of homes over $3 million by people whose cost basis was $50,000 to $200,000, who were motivated to close before the end of the year because of the tax bump,” said Steve Niethammer, a Realtor with Zane MacGregor Co.

Who buys trophy homes?

David Bellings of Coldwell Banker, who specializes in luxury properties, said his current listing for an $18.5 million, seven-bedroom home in Sea Cliff, as well as other high-end homes he sold last year, drew interest from “CEOs from around the world” as well as “celebrity types from L.A. thinking of moving here to escape the crazy paparazzi and to have more of a normal life.”

Several well-known tech moguls went on shopping sprees in San Francisco. Yammer founder David Sacks bought 2845 Broadway for $20 million, a fraction of the $65 million it once commanded. Jack Dorsey of Twitter and Square paid $9.9 million for a two-bedroom in Sea Cliff. Zynga’s Mark Pincus paid $16 million for the Newhall mansion on Pacific Avenue. Apple’s Jonathan Ive, the mastermind behind the design of the iPod and iPhone, paid $17 million for 2808 Broadway.

“Many of those properties had been on the market for over three years, especially on Billionaire’s Row,” said Sally Kuchar, San Francisco editor of the real-estate website Curbed.com. “The influx of tech money has really helped those big estates sell.”

Tech money reportedly fueled the blockbuster sale of a 9-acre hilltop estate in Woodside that sold in November for $117.5 million, setting an all-time U.S. record. Although public records don’t show who ponied up that amount, the Los Angeles Times said the new owner may be Softbank CEO Masayoshi Son, the second-richest man in Japan.

The seller is no secret: It was Tully Friedman, CEO of San Francisco private equity firm Friedman, Fleischer and Lowe.

Record-setting sums

“That sale just blows my mind,” Niethammer said. “It looks like (the buyer) overpaid by $100 million. Property in Woodside generally goes for about a million bucks an acre; with the house, it should have been about a $20 million deal.”

The previous record-setting sale quickly ended up losing half its value, at least for tax purposes. Russian billionaire Yuri Milner, an early Facebook investor, paid $100 million in 2011 for a Los Altos Hills mansion, but a year later got the county to chop its assessed value to $50 million.

Niethammer is listing a 150-acre former llama ranch estate for $15.5 million in Bonny Doon, overlooking the Pacific Ocean. “I told the seller, ‘You might want to add $100 million to it so it will sell,’ ” he joked.

The historic Flood estate in Woodside, 92 oak-studded acres listed for $85 million in September, has drawn a lot of interest, said Mary Gullixson of Alain Pinel Realtors.

Showing just how coveted open space is, she’s listing a 3-acre parcel – no house – in the Menlo Circus Club area of Atherton for $19.8 million. “It’s a diamond in the rough,” she said.

Another mega-estate in Silicon Valley just hit the market for a cool $100 million with an unusual caveat – the buyer must agree to let the current owner live out his days there.

Located in Hillsborough, the 47.4-acre estate features hiking trails, streams, wildlife and gardens designed by Thomas Church. It comes with a 16,000-square-foot Mediterranean-style home designed by the same firm that designed the St. Francis Hotel. The house has a ballroom, pavilion, library and swimming pool, according to court records of the owner’s divorce.

Lifetime resident

The house’s inhabitant – Christian de Guigne IV, 75, the current owner – plans to remain in residence there for the rest of his life.

Isn’t that a rare request? “It’s as unusual as the size of the land that’s available in such an exclusive area,” said listing agent Gregg Lynn of Sotheby’s International Realty.

The de Guigne family – the patriarch emigrated from France and co-founded Stauffer Chemical Co. in Gold Rush-era San Francisco – has owned the land for 150 years. The house construction started in 1914 and was delayed when Christian de Guigne II went off to serve in World War I, Lynn said.

Million-dollar-plus home sales surge

The number of homes selling for more than $1 million was up 29 percent in the Bay Area in 2012.

Source: DataQuick

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Bay-Area-luxury-home-sales-boom-in-2012-4244363.php

When Oracle billionaire Larry Ellison was selling San Francisco on the benefits of hosting the 2013 America’s Cup, the city was assured that the internationally renowned yacht race would bring in over a billion dollars in revenue into the Bay Area at little to no cost to city government. For San Francisco taxpayers, a group notorious weary of ponying up public funds for private sporting events (the beloved San Francisco Giants couldn’t even get the city to shell out for their fancy, new stadium), it seemed like a dream situation–the opportunity to watch the world’s greatest yacht race in person without needing to travel and having the same cadre of millionaires who pushed for the race in the first place pick up the tab. What could go wrong?

There was just the tiny, little issue of the $12 million in fees the city is supposed to pay this year for environmental planning and state/federal permitting. While the city is on the hook for these fees, the America’s Cup Organizing Committee agreed to fully reimburse all the costs. The problem is that the committee is, reports the Ex, significantly behind in its fundraising and, if things don’t pick up soon, the city will be footing the bill out of its general fund–money that’s supposed to pay for everything from police to road construction.

While the committee has thus far raised a mere $2 million, organizers claim that they’ll be able to gather the rest with ease after the organization is granted tax-exempt status, which Executive Director Kyri McClellan expects to receive in August. Without tax exempt status, argues McClellan, many of the race’s wealthy supporters were uncomfortable making big donations without getting the requisite tax write-off. “I have every confidence we will meet our obligations in the host-city agreement,” she told the Ex.

Depending an organization’s complexity, gaining tax exempt status can take between 3 months to just over a year.

If the tax exempt statues is granted, then the effective day relates back to the date of the formation of the organization–meaning that donations made before the tax exempt status was officially granted would retroactively become tax exempt after the fact.

Why the America’s Cup Organizing Committee hasn’t been exploiting this is unclear. Either backers didn’t feel confident about the eventual granting of tax exempt status or organizers simply felt confident they could raise $12 million at the drop of a hat.

If the committee doesn’t meet its fundraising obligations to the city on time, San Francisco is technically able to pull out of the deal, however the possibility of that actually happening is extremely unlikely.

“If they don’t pay and the city lets them get away with it,” the race’s most high profile critic former Supervisor Chris Daly tells the Appeal, “then they’re just being little bitches.”

Requests for comment from the race’s organizers were not returned at publication time.

That said, it’s not out of the question that the committee could raise the needed funds almost instantly–it’s a veritable Who’s Who of San Francisco high society. The committee is comprised, among others, of William J. Clinton Foundation Director Doug Band, Gap heir Bob Fisher, banjo-picking private equity billionaire Warren Hellman and real estate magnate Mark Buell.

The effort even has Dede Wilsey behind it. Her Wilseyness is the type of legendary fundraiser capable of generating $10 million while taking a nap. Ellison, the effort’s main figurehead, is the sixth richest man in the world.

Having so many deep-pocketed individuals on their team is going to be crucial because the overall cost of the race to the city has been budgeted at $32 million, all of which the committee has pledged to cover. Outside of what it owes to the city, committee is planning on raising a grand total of $270 million to cover all of the necessary infrastructure improvements. That’s in addition to $86 million in rent-free leases the city has granted Ellison for properties along the waterfront.

As originally pitched to the city, the bill for the race was significantly higher. A report prepared by the Budget Analysis Office, at Daly’s bequest, found estimated the cost at $128 million with a mere $22 million coming back to city coffers as increased tax revenue.

As a consequence of the report, the city’s initial plan to create a massive complex in Mission Bay was significantly scaled back and moved to the northwest quadrant of the city–saving San Francisco millions in the process.

Ellison’s sailing team, BMW Oracle Racing, won the last America’s Cup held in Valencia, Spain in 2010. Next time, he’ll have home court advantage.

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Article source: http://sfappeal.com/news/2011/06/slow-fundraising-for-the-americas-cup-could-cost-the-city.php