Even Hollywood's rich and famous can't avoid the housing downturn that's sweeping the nation. In Los Angeles, only 4,430 homes were sold in December, down 48% from the previous year. And prices fell 11% to an average $470,000.
Of course, celebrity homes cost much more than that. An entry-level house for an up-and-coming star costs at least $1.4 million in L.A., say experts. Realtor Barry Sloane of Sotheby's International Realty says it's the owners trying to sell homes in the $3 million to $6 million range that are having the most trouble
Johnny Carson sidekick Ed McMahon is also having real estate troubles. He put his 7,000-square-foot Beverly Hills home on the market In July 2006 for $7.7 million. He has since reduced the price three times, and the house is now selling for $5.7 million.
Housing units owned by the wealthy are also being affected. It is not different there! Those wealthy areas are also seeing price declines, lower sales and longer days on the market.
Prices are falling in almost all areas in the bubble markets. Oh, there will be no spring bounce for housing units in the bubble markets.
Posts
I *will* buy Ed's house for pennies on the dollar!
ReplyDeleteInternational Realty says it's the owners trying to sell homes in the $3 million to $6 million range that are having the most trouble
ReplyDeleteLol, everything from $6 million down is having trouble selling. To think, 'Hollywood' has far more foriegn buyers than DC ever will...
My company has started the moves a month earlier than I predicted and opened up a new campus in Colorado and soon another in Penn (lots of political good will for sale in the 'rust belt' right now). Since there are 3X more volunteers than needed... They'll copy Raytheon and avoid ever getting into the news by never moving more than 1,500 at once and never more than 600 or so from any one area. Cest la vie. They are in negotiation with one state to pull a few thousand jobs out of DC/VA too... who knows how that will go (the other state wants a specific division, who knows if we'll backfill or if it will even happen).
Got popcorn?
Neil
"Lol, everything from $6 million down is having trouble selling. To think, 'Hollywood' has far more foriegn buyers than DC ever will..."
ReplyDeleteNeil - it should not be surprising that the ultra high end have the hardest time selling - think about it for a second....
How many can afford places in this price range? 1 percent of US population? Not likely - probably more like 0.5%. OK so how many of that 0.5% are willing to buy a place at any particular time? Maybe 10% of that? So we are down to 0.05% of the population? Sure the supply is miniscule, but any idea what a very very very small demand will do for prices? Its called an illiquid market.
Further, how many of these people with that sort of wealth will settle for anything less than exactly what they want? Thus, if a place is in any way not perfect, they will likely look elsewhere, build elsewhere, renovate, etc, etc, etc.
Thus, it should be no shock that the ultra high end of the market is ALWAYS the hardest hit no matter how good or bad a market is. It is extremely illiquid, and unless the place is "perfect" it has to be discounted heavily to sell. For more info, see "The Demand of Wealth" (at least I think thats the name) written by William Consovoy an economist and law student who is now a law clerk for a justice on the U.S. Supreme Court.
wannabuy said:
ReplyDelete"My company has started the moves a month earlier than I predicted and opened up a new campus in Colorado and soon another in Penn (lots of political good will for sale in the 'rust belt' right now). Since there are 3X more volunteers than needed... They'll copy Raytheon and avoid ever getting into the news by never moving more than 1,500 at once and never more than 600 or so from any one area. Cest la vie. They are in negotiation with one state to pull a few thousand jobs out of DC/VA too... who knows how that will go (the other state wants a specific division, who knows if we'll backfill or if it will even happen)."
That's just so "twentieth century". My company flies to whereever we need to be during the week ... and flies us home on weekends. That means we get to live wherever we want ... including a world class city like DC!
Post article on 'keeping up with the Joneses'
ReplyDeletehttp://www.washingtonpost.com/wp-dyn/content/article/2008/02/06/AR2008020604181.html?hpid=smartliving
Credit counselors, who see people long after they've made money mistakes, say if your mortgage is taking up more than 36 percent of your take-home pay, you are likely to get into deep trouble because that leaves little room to save or handle any financial crisis.
Now they tell people? ;)
In the midst of this mortgage meltdown, we all should learn from the mistakes of people struggling to stay in their homes.
My... almost written by a bear.
Got popcorn?
Neil
Lance said - "including a world class city like DC". Hey, looks like you haven't been anywhere... world class shithole it is. But what can I expect from my village idiot...
ReplyDeleteDavid,
ReplyDeleteInteresting article:
The global economy could deteriorate further in the wake of the global credit crunch, a meeting of the G7 group of wealthy nations has warned.
But it won't effect prices in DC. ;)
http://news.bbc.co.uk/2/hi/business/7236123.stm
That's just so "twentieth century". My company flies to whereever we need to be during the week .
lol. How 2005. Now companies are co-locating to cut expenses. Its time to move past that year and adapt to the latest trend. Hence why my company is building new campuses. When business expands, go for growth. When the economy is weak, the winners have the lowest costs. Adapt at the front of the pack or be eaten.
We watch every month as DC property values drop. Actually, we watch the global economy have problems...
Got popcorn?
Neil
"That's just so "twentieth century". My company flies to whereever we need to be during the week ... and flies us home on weekends. That means we get to live wherever we want ... including a world class city like DC!"
ReplyDeleteAhh, the fast life of an IT technician.
Did somebody's keyboard stop working? You will be out there on the 8am flight to swap it out...
David,
ReplyDeleteI would give Novabubblefallout a 'hattip' today.
All of the inventory, in monthly sales terms, shot up dramatically! Compare this January to any other... you can't. Sales were about half what they normally are in January. 9.14 months of inventory for Arlington County. Over 10 months for Alexandria city.
It looks like your bet on Case-Shiller dropping 6% to 13% is 'in the bag.' ;) Culpeper County is scary... those are Florida numbers.
Got popcorn?
Neil
This is hilarious:
ReplyDeleteLuxury builder Toll Brothers Inc., hurt as many buyers to try to get out of contracts for new homes amid falling prices, says a member of its founding family is trying to walk away from an agreement to buy a new condominium.
The daughter of Vice Chairman and co-founder Bruce Toll informed the company last month that she and her husband "did not intend to make settlement" on a $2.47 million home they had previously agreed to purchase, the company said in a regulatory filing.
Wannabuy is right. I bought my last house in ’85 and you had to put 20% down to avoid the insurance hit and you could not get a loan for over 3x your annual income. I think we need to go back to those times. Everyone may not have a house, but sooner of later we tax payers are going to have to bail out somebody somewhere.
ReplyDeleteHey,
ReplyDeleteWhere did VA_renter go?
I miss the comments about how 'her' Orlando renters were paying her mortgages.
Oh... bad ROI since 2005. I wonder if with the horrid economic climate in that state if the rents are still getting paid. 768 homes sold in January. 39,245 properties on the market. That's 51 months of inventory. Don't you love how Realtors (tm) quote a ficticious days on market? Not to mention a 'balanced market' is at 4 months of inventory...
Although thsi market has them quoting 34 months :
http://www.orlandosentinel.com/news/custom/growth/orl-homes1308feb13,0,3432225.story
Oh, Minyanville has a great article on reatail and the HUGE contractions planned in commercial RE. My favorite:
"Putting aside whatever operational issues they may be addressing -- We're in an economy where people might begin to think twice about spending $5 on a cup of coffee; so suddenly you don't need two coffee shops on a single city block."
and
"Retailers are hemorrhaging and are trying to stop the bleeding. The bleeding is the operational cost or the occupancy cost of the stores."
http://www.minyanville.com/articles/S-tlb-m-SBUX-RAD-psun/index/a/15909
They also have a good article on the unusual number of muni-bond auctions failing:
http://www.minyanville.com/articles/RATE-retail-bonds-auction-securities/index/a/15904
Oh, there are so many flippers the $3M to $6M that there will be plenty of discounted inventory soon. :) There are blocks of them owned by speculators... everywhere. So anyone who qualifies can pick one up cheap in a year. There are more units available than qualified buyers.
Got popcorn?
Neil
Culpepper County is not in the DC metro market. Just a fact.
ReplyDelete"Culpepper County is not in the DC metro market. Just a fact."
ReplyDeleteIt is "in the market" as far as Case Shiller is concerned - which is why an index that otherwise has a very good methodology is pretty worthless when you want to know what ia happening to prices in DC.
Culpepper County is not in the DC metro market. Just a fact.
ReplyDeleteThis is not something you'll ever be able to explain to the exurb-dwellers. Fact is, the housing price increase over the last decade in places like Brookland, Columbia Heights, and east Capitol Hill is a completely rational phenomenon.
The increases out in places like Loudon or Manassas...not so much.
The increases out in places like Loudon or Manassas...not so much.
ReplyDeleteThat is why prices have fallen there and have not fallen in the close in neighborhoods.
"The increases out in places like Loudon or Manassas...not so much.
ReplyDeleteThat is why prices have fallen there and have not fallen in the close in neighborhoods."
Dont let Neil or Leroy see that. Whenever they are faced with the reality that the close in markets havent fallen yet, they explode in anger and denial - that for some reason some places are in fact DIFFERENT than other places.