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California: “Where the super Rich are buying homes” | High Value Homeowners Insurance

Published on March 24, 2015

We learned earlier this year that California has more of the top wealthiest real estate markets in the country than any other state. But today, this article from CNNMoney sheds light on the fact that we have two of the top cities in the WORLD “Where the Super Rich are Buying Homes“:

The United States is the top destination for those worth more than $30 million buying residential property valued at a million or more, according to a report from Wealth-X and Sotheby’s International Reality.

Not only does America have more rich people than any other country, its stable government and high standard of living make it an attractive choice. Also, great colleges.

“Many [wealthy people’s] children attend university in the United States,” the report said. “For these families, the investment value of owning a property in the country is made even more attractive by the access it provides to educational opportunities.”

New York draws people with it’s strong emphasis in the finance industry, as does London.

Rounding out the top five are Hong Kong, where the real estate industry is the main driver of wealth; Los Angeles, fueled by entertainment and San Francisco, driven by tech wealth.
At least half of these wealthy buyers use a mortgage to purchase their property. The report noted that wealthy individuals tend to keep large amounts of cash on hand (roughly 25% of their net worth), primarily for use in businesses opportunities. Mortgages, especially in this low interest rate environment, keep more money available.

Females preferred high end real residential estate as an investment over males. Wealthy women held 16% of their net worth in real estate verses less than 10% for wealthy men. On average, 64% of a rich person’s net wealth is held in business interests.

Top 10 cities for wealthy residences
Rank City Most foreign buyers from Top industry
1 New York United Kingdom Finance
2 London India Finance
3 Hong Kong China Real estate
4 Los Angeles United Kingdom Entertainment
5 San Francisco U.K, India, Australia Tech
6 Washington, D.C. Domestic Non-profit
7 Singapore India, Indonesia, China Real estate
8 Dallas Domestic Oil
9 Mumbai Domestic Industrial
10 Paris China Fashion
Source: Wealth X, Sotheby’s

 

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Abram Interstate Insurance Services, Inc. is a California wholesale insurance broker (CMGA) that has licensing and expertise to place business in both admitted and non-admitted markets for personal lines insurance and commercial lines insurance in California and surrounding areas.