16 July 2019
Just because a celebrity has lived in a house, it doesn’t mean it sells for more money.
This is what Tanya Stawski – one of America's best luxury brokers at Sotheby’s Realty in Beverly Hills – says. And what a recent in-depth report from Redfin confirms regarding high profile vendor real estate within the USA and the Asia Pacific region.
The real estate website crunched the numbers for 60 homes bought and sold by celebrities and pitted the sales against those of comparable homes in the area. Some of the findings aren’t shocking – celebrity-owned homes tend to be bigger, with more bedrooms and bathrooms, and cost more per square metre than a non-celebrity home. What’s interesting though, is that on average these properties spend around 36 days longer on the market and tend to sell under the original asking price.
There are a few good reasons for this. Celebrities are known to add unique non-essential amenities – like a basketball court in the basement – that most new home buyers don’t necessarily need or want. Stawski says it's also harder to hold open houses.
"You are restricted in showing famous people's houses," she says. "There is a greater level of vetting and qualifying required for a buyer in order to do an inspection."
James Pratt, CEO of the James Pratt Auctions Group, says he has experienced similar roadblocks when auctioning celebrity homes.
"Celebrity and high-profile clients' houses are ideal for auctions because they generate so much more exposure during the marketing campaign," he says. "However, due to the extra vetting process, sometimes the manager or publicist of the client decides to cancel the auction last minute due to privacy concerns."
Whether it is in Australia, America or Europe, another key reason why a celebrity house sells for less is the fact that not everyone sees that person as noteworthy.
As Pratt points out, international buyers have very little interest in paying more for a high-profile name if it isn’t relevant to them. "For example, an American singer's house in New York may get a higher price from an American buyer," he says. "But if the best buyers are coming from China or Europe, chances are they won’t know the singer and won’t pay a premium."
Stawski agrees. "If your vendor's name is well known to international buyers, as well as local buyers, you are in a very good position," she says. "In Bel Air Crest, Bel Air, Kim Kardashian-West sold her house for over US$17.8 million in 2017, despite paying US$11 million five years earlier. In this case, it was her international brand that helped drive up the price."
In their report, however, Redfin provided several examples of celebrity homes that sold for more than $1 million under the asking price. Matthew Perry sold his Malibu abode, initially priced at US$13.5 million, for US$10.65 million. Katy Perry sold her LA home US$1.36 million less than the asking price and Jessica Simpson unloaded her Beverly Hills estate for US$6.4 million, US$1.595 million less than what she wanted. Even the Playboy mansion sold for under the asking price – a whopping US$100 million under! However, the new owner received $1 million a year rent from Hugh Hefner, who stayed in the property for the rest of his life.
REINSW thanks Tanya Stawski and James Pratt for their contribution to this article.
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