Beverly Hills: Swanky Housing in Denial?

Beverly Hills. "That's where I want to be," goes Weezer's pop classic.

All around the city, ultraluxury condo complexes are sprouting up in an outward show of confidence from investors who have seemingly ignored forecasts that the high-end property market will slow to a crawl.

Opinions on whether their confidence is built on foundations of stone or sand depends on which expert, developer or Realtor is doing the talking.

"The talk is of a United States on sale, but the truth is that it remains the best place to invest money longer term," Los Angeles Economic Development Corp. chief economist Jack Keyser said. "On the west side, there have been year-over-year increases in median property values -- nobody is creating land in this area of Los Angeles."

In fact, you'll now pay 12 times more for the same-size house in Beverly Hills than you would in Arlington, Texas, according to the Coldwell Banker Home Price Comparison Index.

An asking price of $3,000 per square foot perhaps seems incredible for a condo but not for those familiar with the so-called "Golden Triangle." Residents are walking distance from Rodeo Drive, the Los Angeles Country Club and the Beverly Hilton hotel.

The Montage development is one of four ultraluxury condo blocks currently under construction within this small area, an area where Gucci handbags are accessorized with Chihuahuas. The $200 million building will have full concierge services, delivered groceries, catered meals and an on-site hotel, should one's guests prove too demanding, according to the developers. Corner condos will run beyond $8 million.

"Prices like these don't scare people in Manhattan or Beverly Hills," said Sotheby's real estate agent Jeff Hobgood. "People demand quality and have the ability to pay for it."

Just down the road, the CPC group headed by Brits Nick and Christian Candy spent $500 million on a site the previous owner had purchased for $33.5 million just three years earlier. Their idea: build 252 condos and run away with a billion and change.

The brothers have a reputation that says it will work; a CPC development in London's Hyde Park is selling for an astronomical $11,000 per square foot.

Whether prospective buyers of units like those in the four new condo blocks are confident they will see a good return on their investment or are simply too rich to worry about such things, the buyers exist and their options will be many.

"There are 140 residences offered and 16 have sold, including the record-breaking sale of a penthouse for more than $2,700 per square foot," said Susan de Franca, president of sales at The Century, another of the under-construction condo blocks, where units begin at $3.5 million -- firmly qualifying it as one of the aforementioned "Super Four."

Not all experts agree that the high-end real estate market will be able to buck the trend of property value decline indefinitely.

The weakening dollar has the benefit of increasing the attractiveness of property as an investment and is happening in conjunction with the aging demographic of baby boomers. On the flip side, there are the difficulties obtaining mortgages and reduced profit expectations. Economist Stuart Gabriel told ABC News the latter will dominate.

"Markets are segmented and the high end benefits from a more affluent buyer class, but it still can't defy the laws of supply and demand," said Stuart Gabriel, director of the Ziman Center for Real Estate at UCLA. "This high-end market will see weaker demand and some slowing as a result -- it just takes a little longer to hit."

The proliferation of investment from non-U.S. citizens has buoyed the market to some extent. The extraordinary drop in the value of the dollar has effectively given foreign buyers a 30 percent discount on top property on both the East and West coasts.

However, the level of interconnectedness of world markets means that if American economic woes spread to the euro zone and Japan then the frailty of such foundations could be exposed, Gabriel said.

"It's a sign of the times that many of our sales are to foreigners and they're paying with full cash or large down payments," said Mel Kimman, who has personally invested $30 million into The Hollywood, a smart, new high-rise located near the Hollywood Bowl.

Kimman admits that the days of an instant fortune from real estate have passed but said he believes investors like him who are in it for the long term will successfully come through this period.

On the face of it, all is well for the wealthy and their housing empires.

Cranes tower over the desirable parts of L.A. and the real estate market is primed for the sale of the 29-bedroom, 40-bath former home of William Randolph Hearst and actress Marion Davies, which is on the market in Beverly Hills for $165 million.

Look a little closer though and you'll meet developers whose ebullience has dampened and you'll find a $165 million mansion that has sat on the list for more than a year.

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