Real Estate Investing

Forbes had an interesting piece recently on the “Celebrity Real Estate Losers” of Hollywood. Unfortunately, it seems Ed McMahon is the biggest loser, having to reduce his asking price from $7.7 million to a mere $5.7 million. Poor Ed.

In other news, Guns N’ Roses guitarist Slash is suing his real estate agent for much the same reason as San Diego couple Vernon and Marty Ummel. Like the Ummels, Slash feels he overpaid for the Spanish-style Hollywood Hills home he purchased in January 2006. Slash sold the home in December 2007 for $5.7 million, a loss of $500,000. The ongoing California Supreme Court case has Slash alleging that the home is neither as big nor as private as his real estate agent led him to believe it was. Real estate agent lawsuits seem to be a new trend. Couple that with the rash of personal attacks on real estate agents during home tours and it sums up to a good time to be exiting the business. Which indeed, many realtors are doing, but I digress…

Other Hollywood real estate losers:

Rock star Avril Lavigne had to reduce her asking price from $6.9 million to $5.8 million. With tennis courts, a pool, five bedrooms and six baths, the Beverly Hills house is being touted “one of the best values on the market today” by Lavigne’s agent, Forbes reports.

TV star Wilmer Valderrama reduced the asking price by $200,000 on his five-bedroom home. He received only $1.75 million for the home, which is in the less desirable Tarzana neighborhood.

Legendary hairstylist Vidal Sassoon has seen the asking price for his lavish Mulholland Drive estate drop by $5 million to only $20 million.

Access Hollywood is linking this trend to the writer’s strike. The L.A. real estate downturn began alongside the strike in November, Access claims, with December sales volume 48 percent less than a year prior and average home price down 11 percent.

It is no secret that the housing market in Las Vegas, and Nevada as a whole, took a hit in the recent housing slump. But according to area realtor Ken Lowman, the city’s ultra-luxury market has remained quite strong.

“The ultra-luxury market remains the best performing part of the residential real estate market today,” Lowman said to the Las Vegas Review-Journal in late January. “We have had four closings in the past five months for over $3,000,000 and I have finished the year with more momentum than it began.”

The focus of the article is on a local dentist who downgraded from a $5.6 million home with 7,000 square feet of living space to one in the same subdivision with only 5,000 square feet.
The 2-year-old, custom-built home was on the market for 118 days.

“Unique features in the estate home include a circular bar, a water wall entry feature, great room with four televisions, infinity edge pool overlooking the valley and mountains, a wine cellar, four-car garage and second-story observation loft.”

The ultra-luxury homes market is so rife with competition, in fact, that developers are scrambling to up their game. Granite countertops, high ceilings and top-notch kitchen appliances are standard expectations, according to New Homes magazine. In fact, discerning buyers looking to customize their living spaces are choosing counter surfaces like onyx and imported marble tiling. To further entice buyers, many ultra-luxury condos and developers offer on-site design centers with various levels of customization available.

Las Vegas is not the only city seeing a relatively healthy ultra-luxury housing market. The ongoing construction of ultra-lux condo projects like the Chicago Spire (scheduled opening 2011) indicate that elite buyers are indeed shopping across the United States. San Francisco statistics from February indicate that multi-million dollar home sales are strong there as well. With 68 homes on the market in the $2 to $4 million range, 15 sold in January at an average price of $2.53 million after an average 117 days on the market. Indeed, the luxury and ultra-lux homes market seems to have weathered the real estate storm just fine, perhaps thanks in part to the tremendous influx of foreign investment?

The Euro is worth very near to one and a half times the U.S. dollar. As a result, there is much speculation that Europeans will begin buying property in America. In fact, an Associated Press article quotes Dan Green of TheMortgageReports.com as saying that inquiries he’s received from overseas has grown by about five to 10 times the size it was a year ago.

A homebuyer today would need only 34,100 Euros to make a $50,000 payment toward a home. A buyer based in England would need only about 23,900 GBP to make the same $50,000 payment. Sad, isn’t it?

New York, Chicago, California and Florida are the areas expected to see the greatest influx of foreign real estate investors. And investments are exactly how foreigners are viewing this, according to the article - although undoubtedly some are also viewing it as an affordable way to score a great vacation home. If more homebuyers enter the market, it is expected to “set a floor” for the real estate market and help the market eventually stabilize, the article stated. Here’s hoping!