If television celebrities like Frankie Muniz and Ozzy Osbourne are having trouble selling their homes in Beverly Hills, does it mean the air has finally gone out of the highest end of the housing market?
The Osbournes have slashed the asking price for their mansion by $1 million to just shy of $11 million according to published reports.
And Muniz, who’s reportedly something of a house flipper, just cut the price of one house by 15 percent to $3.6 million, though he's got another house on the market for $6 million.
Movie actress Penelope Cruz recently bought a house in the Beverly Hills-area for $3.5 million, nearly $500,000 less than its asking price according to The Wall Street Journal.
Is a U.S. housing bubble deflating at the high end?
Although some economists say a spate of discounts to multimillion-dollar houses is an indicator of broader weaknesses in home prices, Michael Libow, a real estate agent with Coldwell Banker Beverly Hills South says supply and demand remain out of whack, and a dearth of product means people will pay a premium for a good house.
“Discounts are something that occur on occasion, but are only necessary again when something is terribly overpriced,” he said.
Libow, who has been selling homes in Beverly Hills for 20 years, says sellers are asking for the moon for a home if they’re not particularly motivated to move. He just sold one home, which was featured in the movie “Down and Out in Beverly Hills” close to its asking price of $6 million.
Is “down and out” an apt description of home prices in Beverly Hills?
The California Association of Realtors says March median home prices in Beverly Hills fell 12 percent from the year before to about $1.25 million, and new data show they fell again in April. In nearby Brentwood home prices fell 22 percent in March.
So is a housing bubble bursting? It might simply be moving. To the west in Pacific Palisades home prices jumped 25 percent in March to $1.6 million, and in Santa Monica they jumped 18 percent.
The Journal says other hot markets, like Manhattan or Miami, are seeing some discounting at the high end, but part of the reason for that may be outsized expectations by house sellers. But perhaps no one can top the perceptions of value in Los Angeles, where the only real thing may be the real estate.