More homebuyers are taking a cue from Elon Musk and Jeff Bezos and buying up real estate to create 'compounds' in their neighborhoods and keep investors out
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- Some celebrities and ultra-wealthy people buy up several homes in their neighborhood to expand their empires.
- During the pandemic, the number of homebuyers doing the same thing surged.
- Many people are trying to protect the look of their neighborhood, or make more room for friends and family.
When Brian Miller noticed that the real estate in his neighborhood was selling fast in 2020, he and his wife bought the 1.4-acre lot next door for $3 million in order to protect their view. "It's a good investment," he told The Wall Street Journal's Nancy Keates.
More homeowners are beginning to expand across their neighborhoods — it's a way to keep developers from buying up houses, tearing them down, and creating eyesores. But it's also a way to create more space for family and friends. Celebrities and rich investors have been doing it for years.
Elon Musk, for instance, who is the world's richest person, bought six houses on two streets in Los Angeles over the course of the last decade. In addition to a house in Northern California, that adds up to $100 million in real estate spending, according to the Journal. Microsoft co-founder Paul Allen combined 13 lots with about eight houses together into a compound in Mercer Island, Washington for an estimated $130 million. And Amazon founder Jeff Bezos bought a 24,000-square-foot house next to his own in Medina, Washington, for a rumored $53 million in 2010, the Journal reported.
But it's become increasingly common for homebuyers with significantly smaller net worths to expand throughout their own neighborhoods, real estate agents told the Journal. The creation of "compounds" surged during the COVID-19 pandemic, when remote work became common. Many of these transactions are private, occurring through personal networks before a house can even officially hit the market.
And many are making such purchases to keep things in the family, whether that's a literal one or the surrounding community.
"The land is worth more than the houses here, and if I don't buy it, it will be torn down," Charlotte Huggins, a film producer who is considering broaching her neighbors about buying their home, told the Journal.
Huggins already bought the house next door to her for $740,000 in 2019, after seeing a different one in the neighborhood sold, torn down, and replaced with a larger, new house. Before buying the house next door, she got to know its owner before he died, a man in his 90s. Huggins was able to buy it off-market for what the man's daughter determined was a fair price.
May and Henry Lee, a San Francisco couple, also bought a house next door to them in 2019 for their adult children, who work in the Bay Area, to move into, according to the Journal. Other families across the country told the Journal that they bought houses in their neighborhood to serve as extended space for their own families.
And sometimes neighbors treat a vacancy on the block as an opportunity to band together.
Bob Champey, an agent with William Raveis Real Estate in Concord, Massachusetts, told the Journal that last year, he oversaw a group of people offering to buy their neighbor's home in cash for $2.6 million, wanting to keep potential buyers from putting up a large, obstructive house in its stead.
It recalls another recent trend: suburban homeowner associations blocking big investors from buying up their neighborhoods.
"I don't want a great big horrible house next to me," Huggins said.
from Business Insider https://ift.tt/aFOfTZ5
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