The wealth of investment in luxury real estate from affluent Russian, Chinese, and English foreigners has created an influx of speculatory luxury home building. Over the past several years many real estate developers saw luxury properties being snatched up throughout the United States. They ascertained that the market was rebounding, and began building high-end homes without the promise of an immediate buyer. Their gamble paid off as the luxury market has been booming, and inventory levels throughout the country has been decreasing.
Not surprisingly the Southern California region’s great weather and scenic views, is among the most sought after luxury real estate markets for both buyers and builders. Alessandro Crivelli, founder of Est4te Four is a shining example of the tremendous pay offs one can see from anticipating the demand for luxury homes in the Southern California area. He began his first speculation build 3 years ago when he obtained 1.3 acres of land in the L.A. area. Crivelli constructed a 16,000 square foot single family home that is currently listed at $48 million.
There are naysayers who express concern over speculative housing development. Their fears stem from the housing bubble of 2008 that contributed to the recession, but some experts say that the return of high-end luxury housing development suggests increased confidence in the U.S. economy, and its buyers. Others suggest that well-off consumers might want more say in the building process, but there is plenty of evidence to the contrary. In fact, several developers have reported quick turnarounds on their investments. They have noticed that buyers are searching for luxury homes that are not readily available. They’re looking for contemporary floor plans, with an abundance of glass to bring in light, and want turnkey solutions and the ability to move in right away.