Vegas home builder bets $32.5 million spec mansion will smash a local record in Southern California

Blue Heron’s cliffside spec house spans three levels in San Diego’s La Jolla neighborhood.

A mansion overlooking the Pacific Ocean in Southern California is asking $32.50 million. It is one of the most expensive homes for sale in San Diego County and it is in the running to set a local record.

The fact that the home was designed and built by a Las Vegas-based builder makes it even more intriguing.

Tyler Jones, a fourth-generation Vegas native, said that he would consider the experts in luxury real estate in Las Vegas.

Building on the ocean is more similar to building in the desert than you might think. Blue Heron's design focuses on blurting the lines between indoor and outdoor living.

He said that the Mojave Desert is a good place to do that. San Diego is a better place to do that.

The company has built hundreds of homes in the Las Vegas area over the past 18 years. The starting price for one of the firm's more affordable desert homes is about a million dollars, but the average sale price for one of the company's newly constructed desert mansions is about $8 million. One of Blue Heron's mansions broke a record when it sold for $25 million to Anthony Hsieh.

The 15,000 sq. ft. Las Vegas mansion designed and built by Blue Heron which sold for a record-breaking $25 million.

About 300 miles away from its core business in Vegas, Blue Heron has a new coastal spec mansion that spans four levels with an expansive deck and a swimming pool.

Visitors are delivered to the second floor of the home via a glass bridge. The home has five bedrooms, eight baths, and three kitchens.

A stone and glass bridge appears to float above a seating area and fire feature on the lower level.

Blue Heron has built two residences outside of Vegas. The first one was a spec house and was on the market for nine months before being sold for $20 million. In the second quarter of this year, the median price of a single family home was $3.6 million.

A builder who bet big on luxury real estate in Vegas turned his attention to breaking a local record on the edge of the Pacific.

Blue Heron’s Ora House perched on a cliff overlooking the ocean.

Jones has fond memories of vacationing in La Jolla as a child, and he has a soft spot for it. He bought a $4.7 million oceanfront home in the area in 2016 because of that. Developers refer to it as a "teardown." Blue Heron was more interested in the site than the home that was sitting on it. The company tore down the old home and built a new one.

The home is at the top of the market. 11 sales at $20 million or more have been recorded in the community since the beginning of the year. The Razor House, a waterfront residence that was purchased for over 20 million dollars by Keys and Beatz, was one of the most talked about properties of last year.

The facade of the Razor House blends glass and concrete to deliver sharp lines and dramatic curves.

According to public records, the oceanfront mansion sold for $24.7 million in 2019.

The most expensive home for sale in La Jolla at $3,660 per square foot is actually a relative bargain compared to the over $4,000 per square foot price achieved on the El Paseo Grande sale.

The San Diego lifestyle is what people love, according to a real estate broker who was involved in six of the neighborhood's transactions. Dickinson and Greenspan are co-listing agents on the house. Dickinson told CNBC that there is a tech boom that is moving from the north to the south.

One of Ora House’s five bedrooms with an ocean view.

The cost of developing on the California coastline, which requires more time, more effort and a lot more money, is one of the reasons for the large price tags.

He said that it wasn't worth it for a small project.

Rooftop bar and lounge area

The company's beachfront spec home is now facing a trio of challenges, including rising interest rates, diving equity markets and sky-rocketing inflation.

Those are serious factors, but they are mitigated by limited housing inventory. Typically the number of homes for sale in the neighborhood is between 150 and 200 units, but this month there are just 89 homes listed. When you focus on the oceanfront inventory, the market is tighter.

The inventory is very low. The process of building a waterfront property takes six to eight years.

The developer from Vegas is confident that the odds are in his favor.

Jones said that they have a lot of confidence in their ability to deliver that experience. We are going to find people that are willing to pay for that.

They say the house always wins in Vegas, but only time will tell if that's true in La Jolla.