Mainstream Home Prices May Be Rising, But Luxury Properties Still Offer Deep Discounts.
Falling real estate prices are becoming as much a feature of high-end neighborhoods as ocean views, infinity pools and four-car garages.While the latest data suggests prices for mainstream homes may be stabilizing after several years of pain, the news for luxury homes isn’t looking as good.That’s bad news for sellers, naturally, but anyone in the market for a home listed for $2 million or more will find deeply discounted asking prices—and may be able to command even lower prices.
- “I would say we’re 40% off 2007 prices for everything,” says broker Chad Rogers, who covers the area from Malibu to Hollywood Hills for Hilton & Hyland, a Beverly Hills real-estate firm. “We’re now seeing prices consistent with where we were back in 2003.”
- “The $10 million to $30 million properties are on the market for a very long time,” says Cathy Wood, a real estate broker covering Beverly Hills and surrounding areas for realty firm Gibson International. “They’re seeing a lot of price reductions.”
- Across the country in hedge-fund haven Greenwich, Conn., local broker Eric Bjork at Prudential Real Estate finds a similar effect. “There’s a new level of value being set,” he says. “The $8 million [homes] are selling for $6 million, and the $10 millions are selling for $8 million. When you do the math, it looks like an adjustment of 20% to 30%.” The city of Greenwich is seeing the worst home-sales market—and deepest discounts—in decades.
- According to Trulia.com data, 28% of the homes currently for sale in Beverly Hills (Zip code 90210) have dropped their price, with an average discount of 11%. In Aspen, Colo., (81611), 39% of the homes have cut their price, by an average of 16%.
By Brett Arends, Sept. 23, 2009, WSJ