One of California's toniest towns, Beverly Hills, is an example of prime real estate that will always be in demand. When the economy is strong, prices appreciate quicker than the overall market, and in downturns, declines in pricing tend to be more modest. Even during the Great Depression, Beverly Hills built a new Civic Center, three new movie theaters, and opened its noted Saks Fifth Avenue department store.
The town offers an unmatched degree of space, diverse architecture, manicured surroundings, security, and a central location that affluent families find attractive. Residences range from relative modest ranch-style houses to large mansions. The average price per square foot in Beverly Hills is $845, an increase of 10.6% over 2014.Over the last five years, home prices have appreciated 23.9%.
Mirroring Beverly Hills' success
The Promontory Club, 15 minutes from downtown Park City, Utah is a $400 million, 11 square mile, private community. It represents almost 20% of all real estate transactions in the greater Park City area. Amenities include Pete Dye and Jack Nicklaus Signature golf courses and four clubhouses. Its Shed Clubhouse, with a family focus, is an industry standout. It includes "old school" video games, billiards, bowling, a 50-seat movie theater and general store. The outdoor amphitheater hosts live music and performances during the summer.
"Choosing where to live is a like picking a school for your children," said Rich Sonntag, managing director at The Promontory Club. "Amenities are important, but accessibility, peer influences, and the social fabric are equally important.
"This year we will close 150+ sales," projected Sonntag. "We continued to invest in our infrastructure and amenities through the downturn and did so without incurring third-party debt. If a private club community carries debt, it is important to investigate why the club carries debt and who owns the note. Ask the tough questions: What is the loan to value? Is it a pure hedge fund financial play? A highly leveraged community might suffer during an economic upheaval. The market is now recognizing us for both our financial stability and family appeal. We now have several multi-million dollar spec homes under construction."
Beverly Hills developed over a four decade period. During each stage of development, the city meticulously designed its look and layout to look garden-like with parks and trees. It was planned in every sense - from street design to home site size. Although the square footage and architecture of homes varies widely, the mix of styles works.
"Our timeline is a little shorter," said Sonntag. "But, we follow the same playbook. It is important to make sure a home built five years ago blends with a home built five years from now. At Promontory we encourage diversity and don't dictate style. However, we strictly govern components in the homes. Designs include use of earth tone colors, roofs made of multiple materials, and placement of windows to minimize reflectivity. Our guidelines ensure a consistent quality and blending with the environment, so one house will not dominate a neighborhood."
Location, location, location
Promontory and Beverly Hills are both located 30 minutes from a major international airport. "Promontory is a quick drive down Interstate 80 to the Salt Lake City Airport. You never have to question how easy it is for your family to see you. When you reach the level of financial success of our membership, you don't want to settle on a 'B' location." said Sonntag. "We have access to one amenity Beverly Hills lacks - world-class skiing. Vail Resorts is midway into a $50 million expansion of their infrastructure at The Canyons and Park City Mountain Resort...and Deer Valley is only minutes away from Promontory. The greater Park City area now is considered the largest ski resort in America with 7,000 acres of skiable terrain."
"Everything comes full circle. We launched The Club at Promontory right after 9/11. The market changed overnight. You could no longer sell off a paper or a dream. During the roaring real estate market in 2004-2006, prospects purchased real estate sight-unseen. Promontory has always been about demonstrating our vision. Promises don't carry much weight. Although golf represents 50% of our amenity offering, we are not selling a golf community. It is not all about golf, golf, and more golf. Today's buyers are multigenerational families pursuing a myriad of interests", said Rich Sonntag, Managing Director at The Promontory Club.
Did you know? Beverly Hills originally was one of the largest lima bean fields in California.
Park City had $827 million in real estate transactions in the first six months of 2015. Single family homes sales were up 9% with an average sales price of $1.47 million. Condominium sales were up 15% with an average sales price of $721,000.