Resales still dominate the $100 million segment but a new contender has emerged that could transform the landscape in the years ahead—the ultra-luxury spec home. Designed to be “move-in ready,” the spec, or speculative, home is built by a developer based on the tastes and preferences of prospective target buyers, rather than specific to one client. Although spec homes are a well-established segment in the overall real estate market, “Mon Rêve” in Holmby Hills, California, was the first ultra-luxury spec home to sell in the U.S. for $100 million last year, opening the door for similar projects to be listed and sold at sky-high prices.
In 2016, expansive spec homes dominated the highest end of the Los Angeles luxury market, comprising six of the 10 priciest transactions
At this price point, spec homes offer an uncompromising architectural design, exquisite craftsmanship, and lavish amenities. Ultra-spec homes are designed to be statement pieces says Hyland, adding that they "Boast over-the-top features, such as outdoor movie theaters, indoor state-of-theart bowling alleys, $30 million luxury automobile galleries, and helicopters—much like our Billionaire by Bruce Makowsky listing, the most expensive property in the nation."
Curated collections of art—three works by Damien Hirst valued at $2 million—are even included in the sale of one $100 million Los Angeles spec home. Privately listed for sale by Hilton & Hyland Real Estate, the property also features a selection of wines and cars, as well as bespoke interior design and furnishings.
"Spec homes are no longer developed with the intention of appealing to an entire market," says Jeff Hyland. "With a specific luxury buyer in mind, developers are taking custom building to new heights—and they’re in demand. Between the valuable land they’re often built on and high-end finishes that cater to an elite individual, spec homes have proven to be ideal in their turnkey nature."
While ultra-luxury spec homes and new developments are on the rise in the trophy-home market, resale homes still comprise the majority of sales in the segment. Over the past decade, nearly two-thirds of the $100 million-plus properties sold were resales. The number of new development trophy homes sold only surpassed the number of resale properties once in 2011. This dynamic is bound to evolve as the availability of nine-figure inventory continues to evolve.