Across the country, luxury homesellers are slashing prices. Here are some of the biggest drops.
Sotheby's International Realty
When the 20,000 square foot, six-bedroom St. Regis penthouse in San Francisco was listed in late August 2008, for $70 million, it was the highest price ever sought for a Bay Area property.
Even though it was before the meltdowns at AIG and Lehman Brothers, which would later virtually freeze transactions of multimillion-dollar homes, the listing generated skepticism among San Franciscans. It wasn't in Sea Cliff overlooking the bay, nor nestled among the stately spreads in Pacific Heights, and nowhere near the Geary Boulevard mansions made famous in Hitchcock's films.
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Rather the St. Regis is on Third Street, next to the Museum of Modern Art, a fine neighborhood to be sure, but on the edge of the grittier Mission district. It's far from the city's best restaurants, the ocean and boutiques. Instead, the St. Regis residents greet throngs of tourists and homeless encampments when they step out the door.
Those reasons no doubt kept would-be buyers away. Another drawback? The near eight-figure price tag.
So in February, seller Victor MacFarlane capitulated, lopping $21 million off the price, the single largest price reduction of homes currently on the market.
It's joined by the 115-acre Two Trees Farm, in Bridgehampton N.Y., a property noted for its 2,500 square-foot main house, summer polo matches, equestrian facilities and a 2,750 square-foot, four-bedroom Gin Lane Hamptons home--both of which have reduced their asking price by $20 million, to $75 million and $20 million respectively.
Our data comes from Trulia.com, a San Francisco-based real estate listing company that tracks publicly listed homes currently on the market through multiple listing services. We found the 10 homes with the largest asking price reductions after considering any home which was re-listed from its original price to a lower one, or that was removed from the market entirely and then re-offered at a reduced price. All the homes on our list are multimillion-dollar reductions.
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The price cut Donald Trump used to entice buyers in March 2008 was perhaps a sign of things to come. His $125 million, gold- and onyx-soaked Maison de l'Amitie, on 475 feet of Palm Beach, Fla., oceanfront stayed on the market for almost three years before he cut the price to $100 million, and was able to sell it to Russian magnate Dmitry Rybolovlev in June of 2008.
So far, sellers of properties on our list have had difficulty finding their own Rybolovlev.
"For these uber-luxury homes, most of them have been on the market 180-plus days despite the price cuts," says Heather Fernandez, vice president of marketing at Trulia.com.
In Southern California, home to three homes in the top 10, Beverly Hills broker Mauricio Umansky of Hilton & Hyland says that those buyers left with cash are waiting for further price reductions.
"At the high end, every buyer thinks that they're the only one with money," he says. "They figure that there's no one else looking and so they're not in a rush."
That's especially bad news for the owners of a $15.9 million Beverly Hills mansion on our list. Even with five bedrooms and 10,500 square feet of living space, landscaped gardens and citrus groves, it's undergone three price reductions that have lessened the price tag $8.1 million since it was first listed in May of 2008.
Instead of the slow descent, some sellers have opted for quick and dirty reductions to grab attention and trumpet their eagerness to sell. A nine-bedroom, 12-bathroom, Jupiter Island, Fla., home with 428 feet of oceanfront, a tennis court and almost four acres of land was listed in March of 2009 for $39.9 million and has already been reduced by $10 million.
While these hefty price drops are germane to the upper-tier, nationwide, sellers are employing similar methods--on a lesser scale--to unload their properties. According to ZipRealty, an Emeryville, Calif., real estate brokerage, 45% of currently listed homes have gone through at least one price reduction since their original listing.
Whether these strategies pay off remains to be seen, but for buyers in this price range these sobering reductions are good signs that sellers are willing to listen to offers. Great news, if you've got cash on hand.
In Depth: Multimillion-Dollar Home Price Cuts
1. Originally listed: August 2008 for $70 million
Reduced: February 2009 for $49 million
In the penthouse of the St. Regis, across the street from the San Francisco Museum of Modern Art, you'll find 20,000 square feet of space, 2,900 square feet of terraces and views of the entire city through the massive 22-foot floor-to-ceiling windows. The condo includes six bedrooms and eight bathrooms over its two stories of space. Sotheby's International Realty has the listing.
2. Originally listed: August 2008 for $95 million
Reduced: April 2009 for $75 million
Two Trees Farm in Bridgehampton, N.Y., which hosts the annual Mercedes Benz Polo Challenges in the summer, is now asking much less for its 115 acres of land, equestrian facilities and four-bedroom, three-bathroom, 2,500 square foot main house. At present, the Corcoran Group holds the listing.
3. Originally listed: July 2008 for $40 million
Reduced: April 2009 for $20 million
On public sale for the first time since the 1920s, this four-bedroom, two-bathroom home has 2,750 square feet of space, 240-feet of ocean frontage and 1.6 acres of space. It's currently listed through Prudential.
4. Originally listed: August 2008 for $30 million
Reduced: March 2009 for $19.5 million
Georgetown is home to many of Washington, D.C.'s most expensive homes, but the sellers of this stately mansion clearly overestimated its worth when it was originally listed for $10.5 million more than its current million-dollar asking price. With views of the Potomac River and Key Bridge, the 18th century estate is in a prime location and has five bedrooms and nine bathrooms as well as 30,500 square feet of space. It is listed through Sotheby's International Realty.
5. Originally listed: March 2009 for $39.9 million
Reduced: March 2009 for $29.9 million
The best properties on Jupiter Island, Fla., either have ready access to the island's abundant, world-class golf courses, or have unbelievable lengths of oceanfront. In this latter case mansion, there are 428 feet of shorefront, not to mention a tennis court, home gym, nine bedrooms and 12 bathrooms across an epic 17,500 square feet.