Almost four decades ago, noteworthy attorney and financier Leonard Ross bought a 30,000-square-foot bucolic Beverly Hills estate at almost $2 million, according to Variety.com, at a time when the median home price was $38,000.
It was a ritzy pink stucco residence, and partly because it had belonged to newspaper magnate William Randolph Hearst, it was the most expensive property listed on the open market in all of the United States at the time. When people asked him why he, as a single man needed such a large home, he said he’d grow into it.
This month, Ross is listing the now 50,000-square-foot mansion and its five-acre compound for $195 million, a record sales price even for Los Angeles, where Hugh Hefner’s Playboy Mansion went for $100 Million four months ago. That doesn't factor in the profit that Ross made from occasionally leasing out his property for upwards of $600,000 per month, according to The Wall Street Journal.
In his book The Truth About Money financial consultant Ric Edelman advises homeowners to “have as big a mortgage as you can get and never pay it off.” Reasons include the fact that the longer you live in the house, the more likely it is that your property will appreciate. On his Edelman Financial Services website, Edelman tells readers: “Having a long-term mortgage lets your equity grow while your home’s value grows.”
Earlier this month, The Wall Street Journal supported Edelman's view of home value that increases with age. The publication quoted examples of Ross and others who exited with millions when, in some cases, they initially paid thousands.
Over in the Hamptons, top-producing Hamptons broker, Matthew Breitenbach, describes corners of that bucolic region as resembling ”an old captain's house that’s beautifully renovated." He says, "The best village corner.. It used to be a blue-collar little fishing village that’s now vibrant, growing, unique. There’s tremendous development and a lot of good inventory.”
The Hamptons in Long Island, New York, are enormously expensive with median home prices at $1,595,000, according to Zillow’s current home value index. It wasn't like that in 1978, when Yvonne Dunleavy purchased a modest home in the quiet village of Sagaponack for $140,000. In the 1990s, she rented it to to John F. Kennedy Jr. and some of his family. She’s listing it now for a mouthwatering $5.75 million, according to the same article in The Wall Street Journal.
A lot can change over the course of homeownership, but prices have a tendency to climb.
Image courtesy of Hilton & Hyland