At a time when housing values across the United States continue to struggle to regain some of their lost value, a surprising number of high end homes are selling for more than the owner paid withing the last couple of years. In a Wall Street Journal article by Juliet Chung we read, “In August, fashion designer Vera Wang bought a mid century modern-style home in Beverly Hills for $9 million from real-estate investor and designer Steven Hermann. He’d bought it for $5 million in 2008, then spent more than $3 million on a gut renovation.
Housing remains mired in a slump in most of the country, with nearly one in four homeowners under water. But as Juliet Chung explains on Lunch Break, a handful of bold investors are attempting to make millions on flips of high-end houses.In nearby Holmby Hills, Lions Gate Entertainment Chief Executive Jon Feltheimer and his wife, Laurie, recently sold a five-bedroom home that they had bought in 2009 for $9.8 million. A family spokesman said the Feltheimers intended to build a new home but sold after deciding the process would be too time-consuming. They got $14.4 million, from Russian soccer player Gurgen Khachatryan.
At a time when luxury homes are making up an increasingly large share of foreclosures, an unexpected number of high-end owners in and near Beverly Hills are demanding—and in some cases getting—millions more for properties they’ve recently bought.”
High End Homes Sell Artificially High
This seeming contradiction in the state of the current housing challenge in most parts of the country seems contrary to what one might expect. However, how much is a person who can pay $15 million for a home really effected by a nagging crisis in housing values? Is there a point at which someone has enough money to be shielded from a housing bubble burst no matter how serious?
It’s all a matter of perspective and obviously, MONEY! An excess of money is the best insulator against any kind of economic downturn. Does it really matter to a multimillionaire that gas prices are still hovering between three and four dollars a gallon? How much does it really hurt a multimillionaire to pay double for a tank of gas? Do they really pay any attention?
Hollywood Remains Insulated
It’s not a surprise that expensive homes in some areas of the country, bought and sold time and again by the same Hollywood crowd are fetching prices greater than the previous purchase price. If you’re making $20 million per movie, or $100 million a year, why does it matter?
An extra million here or there doesn’t even put a crease in the pocketbook. This may seem ridiculous to the bulk of the population, and especially to those living paycheck to paycheck, but it’s true. Enough money can shield a person from almost any worldly influence. Obscene money allows one to basically create their own world, where housing prices aren’t tied to market value but instead to how much you choose to pay. In the Hollywood culture it’s almost in style to pay more for your residence since money is the standard by which everyone is compared in Tinseltown.
Recent Comments