The 14-bedroom, 13 1/2 -bathroom mansion, which came on the market priced at $125 million two years ago, has been reduced to $60 million. That’s a 52% price chop for the 21,897-square-foot Jacobean manor on 40 rolling acres. The home comes with a 52-foot indoor swimming pool, a walled courtyard featuring a 70-foot reflecting pool and a roof terrace with views of the Long Island Sound.
The Southern California real estate landscape, likewise, has been littered with its share of high-profile price drops.
Nicolas Cage’s 11,817-square-foot English Tudor in Bel-Air has been reduced 50% to $17.5 million from $35 million when it first hit the market in 2006.
Les Baux de Palm Springs, home of Suzanne Somers and Alan Hamel, started at $35 million more than two years ago and was eventually slashed to a reported $12.9 million — a 63% reduction. The 65-acre property remains on the market with the price “available upon request.”
When the housing bubble popped, the most dramatic declines hit the mid-priced and low-end markets, where home sellers had to compete with cheap foreclosures. Now, even the wealthy are facing the new reality as some luxury homes’ prices have dropped — and dropped again — over the last few years and agents are begging sellers to be realistic in setting an asking price.
“The $10-million-plus market is best priced close to the bone,” said Michael Eisenberg of Keller Williams Realty, Beverly Hills.
At the peak, Eisenberg said, he had clients who were flipping every two or three years and making so much money they almost didn’t need to work anymore. These days he’s happy to take a languishing listing.
“It doesn’t hurt that the state of the market has helped sellers get a better perception as to what their property is currently worth,” he said.
Eisenberg has the listing of a home that tops 14,000 square feet with a 3,500-square-foot detached guesthouse nestled on more than an acre of land — and an asking price that has been reduced by about half to $10.8 million. Its rooftop tennis court has city-to-ocean views, and the ballroom can hold 200 people.
“I listed it for this seller a few years ago in a different market,” said Eisenberg, who has been selling real estate for 15 years. “Quite simply, there was a time that Sunset Strip showplaces were garnering close to $2,000 a foot.”
That figure has dropped to probably $800 today, he said.
“The market moved, and so with it did the price,” Eisenberg said. “The seller is a smart businessman and a reasonable guy — he gets it — and the best part is that he is under no real pressure to sell as the property is owned free and clear of any debt.”
Therein lies one reason for more overpricing in the luxury home market, said Gary Painter, director of research at the USC Lusk Center for Real Estate.
“What’s different about the high end, compared to the general population, is that people who have substantial resources are able to wait longer” to sell, Painter said. “In the bottom of the market you see negative-equity situations, loans going up, people must sell. Outside forces force them to price to sell. Those sorts of outside forces aren’t as present [at the upper end].”
Because luxury homes are often one-of-a-kind and there are fewer sales in such a narrow marketplace, groups that track statistics pick varying points as the cutoff for this market. Homes priced at $2 million and above — the dividing line at Trulia.com, a San Francisco-based website that tracks the market using Multiple Listing Service feeds — account for most price drops nationwide. Such homes represent less than 2% of Trulia listings but are responsible for 24% of the dollar volume in asking-price reductions.
The act of repeatedly lowering the asking price until a buyer is found is known as “chasing the market.” It can be a time-consuming way to sell a house.
But sellers’ thinking has been slow to adjust to the sea change in pricing since the bubble burst.
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Onward with #Obamacare, regardless… #HCR
So the yearlong production, set to close after Massachusetts’s devastatingly negative Jan. 19 review, saw the curtain raised one last time. Obamacare lives.
After 34 speeches, three sharp electoral rebukes (Virginia, New Jersey and Massachusetts) and a seven-hour seminar, the president announced Wednesday his determination to make one last push to pass his health-care reform.
The final act was carefully choreographed. The rollout began a week earlier with a couple of shows of bipartisanship: a Feb. 25 Blair House “summit” with Republicans, followed five days later with a few concessions tossed the Republicans’ way.
Show is the operative noun. Among the few Republican suggestions President Obama pretended to incorporate was tort reform. What did he suggest to address the plague of defensive medicine that a Massachusetts Medical Society study showed leads to about 25 percent of doctor referrals, tests and procedures being done for no medical reason? A few ridiculously insignificant demonstration projects amounting to one-half of one-hundredth of 1 percent of the cost of his health-care bill.
As for the Blair House seminar, its theatrical quality was obvious even before it began. The Democrats had already decided to go for a purely partisan bill. Obama signaled precisely that intent at the end of the summit show — then dramatically spelled it out just six days later in his 35th health-care speech: He is going for the party-line vote.
Unfortunately for Democrats, that seven-hour televised exercise had the unintended consequence of showing the Republicans to be not only highly informed on the subject, but also, as even Obama was forced to admit, possessed of principled objections — contradicting the ubiquitous Democratic/media meme that Republican opposition was nothing but nihilistic partisanship.
Republicans did so well, in fact, that in his summation, Obama was reduced to suggesting that his health-care reform was indeed popular because when you ask people about individual items (for example, eliminating exclusions for preexisting conditions or capping individual out-of-pocket payments), they are in favor.
Yet mystifyingly they oppose the whole package. How can that be?
Allow me to demystify. Imagine a bill granting every American a free federally delivered ice cream every Sunday morning. Provision 2: steak on Monday, also home delivered. Provision 3: a dozen red roses every Tuesday. You get the idea. Would each individual provision be popular in the polls? Of course.
However (life is a vale of howevers) suppose these provisions were bundled into a bill that also spelled out how the goodies are to be paid for and managed — say, half a trillion dollars in new taxes, half a trillion in Medicare cuts (cuts not to keep Medicare solvent but to pay for the ice cream, steak and flowers), 118 new boards and commissions to administer the bounty-giving, and government regulation dictating, for example, how your steak is to be cooked. How do you think this would poll?
Perhaps something like 3 to 1 against, which is what the latest CNN poll shows is the citizenry’s feeling about the current Democratic health-care bills.
Late last year, Democrats were marveling at how close they were to historic health-care reform, noting how much agreement had been achieved among so many factions. The only remaining detail was how to pay for it.
Well, yes. That has generally been the problem with democratic governance: cost. The disagreeable absence of a free lunch.
Which is what drove even strong Obama supporter Warren Buffett to go public with his judgment that the current Senate bill, while better than nothing, is a failure because the country desperately needs to bend the cost curve down, and the bill doesn’t do it. Buffett’s advice would be to start over and get it right with a bill that says “we’re just going to focus on costs and we’re not going to dream up 2,000 pages of other things.” (Disclosure: Buffett is a director of The Washington Post Co.)
Obama has chosen differently, however. The time for debate is over, declared the nation’s seminar leader in chief. The man who vowed to undo Washington’s devious and wicked ways has directed the Congress to ram Obamacare through, by one vote if necessary, under the parliamentary device of “budget reconciliation.” The man who ran as a post-partisan is determined to remake a sixth of the U.S. economy despite the absence of support from a single Republican in either house, the first time anything of this size and scope has been enacted by pure party-line vote.
Surprised? You can only be disillusioned if you were once illusioned.
This is a syndicated post, which originally appeared at washingtonpost.com – Charles Krauthammer Archive
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