For many would-be-sellers of multi-million dollar properties in California, it may be time to face the music: prices just aren’t coming back up.
If you’re at all a fan of celebrity/luxury real estate gossip (may we recommend our personal favorite celeb real estate blog, The Real Estalker?), you know that star after star has been taking a loss on mansion after mansion. While you’d think that celebrity-home bragging-rights would still be worth something even in this market, apparently they’re not worth enough to keep my favorite James Bond from shaving $400K off the price of his Malibu pad.
There could be a great many reasons for this trend, of course. And while it may seem depressing – after all, if the wildly-rich and already-successful can’t turn a profit these days, what hope does the average Joe have? – it might be due to the fact that in tough economic times a lot of people experience a swelling of the common-sense gland.
A lot of luxury/celebrity homes – like John Mayer’s kind-of-creepy house – are over-the-top and impractical. And let’s face it – most of the people able to make down-payments these days are of the Practical persuasion.
Furthermore, while owning a celebrity house will always make for great cocktail-party banter, these days it’s just not going to compare with things like price, property taxes, and ease of maintenance.
Also, there’s the possibility that celebrities, because they are celebrities and may have bought during the housing bubble, may have overpaid. But we won’t go into that now.
Either way, the L.A. Times suggests that the luxury market may be the key to eventual recovery in the housing market as a whole, because homes in the best areas will always prove the most tempting to serious buyers. It remains to be seen, however, whether or not that logic holds true in this particular recession.