As the Los Angeles real estate market has grown and grown, some high-profile real estate players are selling their mega-palaces, surprisingly, at a loss.
Trevor Noe recently sold his Bel Bel mansion for $26.4 million, $1 million less than he paid in 2020. Michelle Pfeiffer and David E. Kelly sold Pacific Palisade House for $6.5 million, US $1.2 million less than what was paid. 2018. Earlier this year, Sandra Bullock sold an apartment in the West Hollywood Sierra Towers as a result of a no-market bargain. the joker Directed by Todd Phillips. According to Dirt.com, in 2017 he paid $5.1 million and wrote off $3.6 million, resulting in a loss of $1.5 million.
Director Simon Kinberg was one of the biggest losers when he sold his Hollywood Hills property, which he bought for $31.5 million, for $28.5 million. But they are not the only ones. LeBron James, Simon Cowell, Justin Bieber and Channing Tatum have also sold the property at a loss over the past two years.
How is this possible in a growing market? Several factors operate. Agents point out that the ultra-rich often buy on the spur of the moment, pay more dollars and can tire of their new purchases just as quickly.
For those in the public eye, the need for secrecy can be costly. “Stars are deeply concerned about privacy and security, which is why they are drawn to off-the-shelf ads. Out-of-market ads are often expensive; “Create a perfect storm,” John Iglar said of Douglas Elimen. Such statements are often exaggerated by 20%.
In addition, more than $20 million worth of premium housing can be particularly difficult to assess. “It’s more like buying art, so it’s a little difficult,” says Michael Nourmand, president of Nourmand & Associates. “You have regular houses where there are previous sales, which are much more similar, and you have some larger, more expensive houses where they are disposable. It’s harder to find out how valuable they are. The stakes are higher. The choice is smaller. Comparing prices is more difficult. “It’s not like buying a liter of milk, where you can search the internet and see what anything goes.”
Idiosyncratic repairs can also make it difficult to turn a profit when investing in real estate. “Sometimes you have someone [where] Money is not an object. They don’t think about selling. “They just do it for themselves,” Nurman said. “As a realtor, I always tell people not to do this. You always have to prepare your house with the idea that at some point someone will own the property.”
According to many brokers, Sunset Strip neighborhoods, especially Bird Street, have seen a decline in sales value in recent years (one recent seller lost $10.5 million). “There are a lot of unremarkable and undifferentiated houses on the market in this area, in shocking numbers, $20 million, $30 million, $40 million,” said an anonymous agent. “And most of them aren’t interesting.”
For the ultra-rich, stock market fluctuations, rising interest rates and inflation also mean that money sold at a loss can be worth the cash and capital inflows. “Loss selling is starting more now because I think there is no perception of value anymore,” Nurmand said. “I think there were people who made a lot of money, bought very expensive properties.”
But as an anonymous realtor points out, losing money on home sales in today’s market is very easy to avoid: you should try to lose money as the market is up 25%. If you lose money in this market, you shouldn’t be in real estate.”
A version of this story first appeared in the June 22 issue of The Gossipify. Click here to subscribe.
Source: Hollywood Reporter
Camila Luna is a writer at Gossipify, where she covers the latest movies and television series. With a passion for all things entertainment, Camila brings her unique perspective to her writing and offers readers an inside look at the industry. Camila is a graduate from the University of California, Los Angeles (UCLA) with a degree in English and is also a avid movie watcher.
