They're even tightening belts in Beverly Hills

Times are tough in Beverly Hills. Well, tougher, anyway.

As recession looms and Wall Street shivers, the Los Angeles area's richest are perhaps perspiring - although they never actually sweat like other people.

Just ask Tim O'Hara, general manager at O'Gara Coach Company, a Beverly Hills-based Rolls-Royce dealership that caters to rock stars, actors and Hollywood executives, many of whom live in the mansion-filled city adjoining Los Angeles.

"Some clients would have bought (both) a Rolls-Royce and a Bentley every 12 months but now they've cut it down to buying two cars in an 18-month period," he said.

Such exotic cars as Rolls, Aston Martins, Bentleys and Lamborghinis cost from $100,000 to more than $1 million, and are still in demand in these parts.

While the slump continues to wreak havoc on world markets and cost thousands of people their jobs, homes and retirement savings, its effect on society's wealthiest, people with net worths of $10 million or more, is far more subtle.

Insulated from the perils threatening the day-to-day lives of the working poor and middle class, these affluent folks are still spending big on luxury cars, boats, jets and jewelry - but less than they did a year ago, say realtors, car salesmen and other professionals who cater to this crowd.

Slow-moving mansions

Gary Gold, executive vice-president of Los Angeles luxury home real estate agency Hilton & Hyland, whose clients include Denzel Washington, Bruce Springsteen, Barbra Streisand and Arnold Schwarzenegger, said high-end homes were staying on the market a little bit longer than they were a year ago.

"Homes in the $3 million to $10 million range are staying on the market a little longer. There was one time when we'd have only three months of inventory. Now it's more like seven to 10 months of inventory," he said.

But Gold contrasted that scenario to situations in places such as Florida, with three years of inventory and Las Vegas, which has two years worth.

Moreover, Hilton & Hyland enjoyed a record amount of sales since last year involving homes valued at $10 million and above.

"Some people's wealth is evaporating but in the super high-end, it doesn't appear to have had a huge impact," Gold said, also citing a huge influx of foreign money into Los Angeles real estate.

It has also been business as usual for Hamish MacDonald, chief executive officer of Customized Fitness Systems, which builds $100,000 gyms in the homes of celebrities.

"We sell a treadmill for $12,000. A lot of our clients are buying that treadmill. It's an easy sell," he said.

"Most of my clients are top celebrities and they're making $20 million or more in movies, so I don't think this (economy) is affecting them on a day-to-day basis," he said.

However, the rich are paying attention to the Fed's interest rate cuts, it seems.

Rolls dealer O'Hara expects some of his clients may opt to use money for other things than a new car.

"There are some excellent buying opportunities in real estate.

Instead of buying that Rolls this year, someone may decide to take their $500,000 to buy a repossessed private jet. There are lots of ways to spend money," he said.

Agencies

(China Daily 03/21/2008 page17)