Just when we thought the real estate market had cooled, evidence emerged that pretend play land has no ceiling.
My colleagues Roger Vincent and Andrea Chan have reported over the past few days that even a modest condo that was more like a starter house on training wheels can make astronomical amounts of money.
Vincent, the developer of a 17-unit complex in Beverly Hills, single condominium It can bring in about $40 million. It’s a little steep for me, but I don’t want to leave it out, because the features include a butler’s pantry, a full bar in the entertainment room, and a 2,500-square-foot terrace.
It is not clear whether the place is furnished or contains appliances and a butler. And those could be a deal breaker for me.
Chan, on the other hand, writes: fancy party It was tossed by a Top Gun real estate agent to celebrate the listing of a $50 million condo in West Hollywood. This is a condo record in the county, but in LA such records don’t last long. Chan reported that a $75 million condo is about to hit the market.
By the way, the small soiree also includes a personal concierge for each attendee in case of any crisis, such as a temporary shortage of caviar blini, an empty champagne glass, or an overdone filet mignon with heirloom truffles. was assigned.
I wasn’t invited to the party, but I wanted to see the building alone, so I went to 8800 Block on Beverly Street and hung out. A paint-splattered man named Giovani Quijada was on his way into a building to do drywall when he was shocked to hear that the roof unit would cost him $50 million.
“Who has that kind of money?” I asked.
“I don’t know,” said Yellowfin, shaking his head. He told me he earned $25 an hour in construction from $20 an hour and he owns a $400,000 house in Lancaster.
Just down the street, a woman named only Krystal was taking pictures of an artist that looked like a promotional photo. She lives in the San Fernando Valley and she said she doesn’t know about the $50 million condo.
“It’s kind of silly,” she said.
Of course, there was a homeless person less than a block away from the luxury condo building.we have Around 70,000 Los Angeles County of which, and one countnearly 50% of renters pay about half of their income on rent and utilities.
“That’s a lot of money,” said Jeremy Poole as I pointed to the expensive condo.
Poole, in tattered clothes, told me he was sleeping where he could sleep, but didn’t rule out going indoors again. rice field.
Production manager Nicholas Monaco took a second look when he was dining at Starbucks and told him about the $50 million house across the street.
“Who the hell would want to live there for $50 million?” A house on the hill or on the beach would have made more sense, he asked.
Monaco, who rents an apartment nearby, told me that if he was rich enough to buy a $50 million condo, he would instead “help some people who need it, maybe downtown.” Told.
On the positive side, he pointed out that people who buy expensive homes pay a lot in taxes.
2015, super agent Jeff Hyland made that point as he drove through Beverly Hills terrain, where homes costing over $100 million are not uncommon. Property taxes underpin government services, argue Hyland, and benefit everyone. gave me
“It was in great shape,” Hyland said, but the new owners didn’t like the layout. So he took the wrecking ball home to make way for the rebuilding.
we have it all right? His $35 million demolition in the middle of tent city.
As for the expected property taxes on that $50 million condo, I called Jeffrey Prang, an LA County Assessor, to help me work out the numbers. The buyer has a tab of $580,000 a year and is a give or take.
Of these, about 40% ($200,000) go to K-12 schools and community colleges. About 24% ($120,000) goes to LA County for various services. Approximately 15% ($75,000) goes to West Hollywood and the remaining 21% goes to various public agencies and special districts.
It’s a lot of money and you have to pay it every year. But as his USC professor Ed Kleinbard argued in his column on his $35 million demolition, real estate is a big contributor to wealth inequality, and the government encourages home ownership through various tax credits and deductions. is assisting
And with so much wealth at the top of LA, prices continue to climb despite the market cooling down a bit recently. Los Angeles County commercial and residential real estate valuations increased by $122 billion last year to reach $1.89 trillion, Prang said. It might be good if you’re ready to cash out, but not so good if you’re struggling to buy your first home or pay rent.
According to Prang, many of the employees who work in assessor’s offices and other local government offices commute to Riverside and San Bernardino counties because of the affordability.
“You can’t go out to dinner with people after work, you can’t go to the kids’ ball games,” he said of people who lose hours commuting to and from work each day.
In November, Los Angeles voters ballot measure This will increase real estate transfer taxes on residential and commercial properties that sell for $5 million or more. Santa Monica is proposing to raise taxes on sales over $8 million.
Backed by dozens of housing, homeless services and labor groups, the LA Bill’s proponents say it will generate $875 million a year for homeless prevention and affordable housing, and its operation will benefit citizens. It is governed by a leading committee.
real estate industry guarding Because of the fight, he argues, tax increases will stall sales and drive high rollers out of their proper places in Los Angeles and into places nearby.
It’s hard to imagine such difficulties, but those who are willing to live in a condo do not have to travel far to save.
However, as prices continue to rise, we need to act quickly.
This story originally appeared los angeles times.