A report from CNBC. “This oceanfront mansion in Hillsboro Beach, Florida, was on the market for $159 million in 2015. But for three years the 60,000-square-foot compound had no takers. The owner eventually decided to put the estate on the auction block, and in November of 2018, it sold for a fraction of the original asking price at $42.5 million. That’s a $116.5 million or 73% price cut. Broker Senada Adzem — who was not involved in the transaction — believes that ‘when it hit the market, the price was mandated by the sellers based on what they had invested in the property, not based on the current market value. The money spent on custom homes is not in direct proportion with the final sales price. There is a point of no return and diminishing returns in super luxury real estate.’”
“When fashion mogul Tommy Hilfiger listed his Manhattan penthouse in 2013, he was asking $80 million for it. The 6,000-square-foot duplex sat on the market for six years. And over that time, it was incrementally reduced. In 2017, the asking price was lowered to $50 million. The duplex finally sold in September for $31.25 million. That’s a reduction of about 61% and a total price drop of more than $48 million from the original asking price.”
“This Los Angeles mansion originally hit the market for $250 million. Back in 2017, that nosebleed asking price made it the most expensive listing in America. But the 38,000-square-foot home sat on the market for over two years. The price was eventually chopped to $188 million, and soon after it dropped again to $150 million. Finally, it sold in October for $94 million. While that’s an extraordinary amount of money and one of the largest residential real estate transactions in the country, it was also a 62% reduction from the original list price.”
“The $156 million price drop isn’t just the largest dollar amount reduction this year, it’s also one of the biggest price cuts in residential real estate history.”
The Los Angeles Times in California. “Real estate agent Tregg Rustad said he’s also seeing a surge in demand in the pricey Westside neighborhoods of Los Angeles, something he wouldn’t have expected a year ago when the market started to slow dramatically. While he’s now seeing multiple offers, he said buyers simply aren’t as willing to pay something ‘unrelated to reality’ as they were two years ago. ‘They’re a little more cautious,’ the Rodeo Realty agent said. ‘Instead of paying an arm and a leg, maybe they just pay an arm.’”
“Whether demand continues to rise is an open question. The jump in sales in September was just the second increase seen in a year. The 10.4% increase was from September 2018, which had the lowest sales for that month in at least seven years. Setting aside that month, September 2019 still had the lowest number sales for a September since 2014. Sales did rise in all counties compared to a year earlier. But in Orange, San Diego and Ventura, the median actually dropped, indicating affordability remains a challenge.”
From Realtor.com on New York. “It looks like ‘Hunger Games’ star Jennifer Lawrence is craving a quick sale of her New York City penthouse. After listing the three-bedroom, 4.5-bathroom abode for $15.45 million in July, Lawrence recently dropped the price to $14.25 million. It looks like she’ll lose a bit of cash on the sale; she purchased the home in 2016 for $15.6 million.”
“‘It’s a lovely penthouse in a good building at an OK location,’ says real estate broker Martin Eiden of Compass Real Estate in New York. ‘The problem is, there are at least 100 other properties in this price range that have the same description. She bought it at the height of the market for $15.6 million. I’d advise to hold on if she could, or suffer a substantial loss and offer it at $12 million.’”