During the housing crisis, the business of building luxury Beverly Hills homes without a buyer lined up, all but disappeared.
Beverly Hills luxury home with pool
Now this practice, also known as building on spec, is coming back. In Beverly Hills and other luxury markets around the area, builders are completing spec mansions and selling them at a profit.
Spec building is making a comeback because of the recent housing bust. Beverly Hills real estate developers were able to get good deals on land during the past few years. Those that had the funds invested in desirable properties, and are now raking in the profits.
Spec homes in Beverly Hills and surrounding areas are driving real estate prices up throughout the entire market. Many of these mansions are being purchased by foreign investors. For these investors, Beverly Hills homes for sale are a bargain compared to other major cities around the world. In fact, last year a Bel Air home built on spec sold for $50 million, making it one of the most expensive sales in the nation.
Beverly Hills real estate has become desirable to the rest of the world. Because of this demand, these spec mansions could help protect home values, especially in the luxury housing market, in the event of future economic woes.
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Photo courtesy of Forbes.