Celebrities take big losses on home sales
Kelsey Grammer sold his Los Angeles home for $3.3 million, 19% less than he paid in 2007. He has also pulled a larger home off the market and is now renting it after it failed to find a buyer at $18.9 million. Meanwhile Blink 182's Tom DeLonge is hoping to sell his San Diego home for $5.1 million, 20% less than he paid for the house plus renovations. He bought it in 2005.
In many ways, the real estate crash has been a lot harder on celebrities and other high-net worth types. High-end homes are lingering on the market for a long time and -- this is probably the most under-reported financial news item of the year -- the real estate crash is mostly concentrated at the upper-end of the market. The National Association of Realtors reported that homes valued at $750,000 and up fell by 47% in the year ended in November. Homes valued at $400,000 or less fell by only 3% during the same period.On the recovery side, the high-end home market also faces a number of obstacles. The United States government has implemented a number of policies to try to prop up housing, but those will provide little help to million dollar listings: The $8,000 first-time home buyer tax credit phases out for individuals who earn between $75,000 and $95,000. For married couples filing a joint return, it's $150,000 to $170,000. In addition, the jumbo mortgage market remains incredibly tight and the interest rates haven't fallen nearly as far as they have on conforming loans.
If the stock market continues to rebound quickly though, that will have a disproportionately positive impact on wealthy people -- and could be the catalyst the high-end market needs.
If you're interested in following the celebrity real estate market, then you absolutely must bookmark The Real Estalker.