Welcome back to the Real Estate newsletter. You know that other shoe we’ve all been waiting for? Well, there are strong signs that the downturn is beginning, and Southern California’s historically active real estate market is finally showing signs of cooling.
The pandemic has pushed our real estate market to mind-boggling extremes, as recent years have seen record prices, all-cash bidding wars, and buyers willing to pay and give up almost anything to get a home. It got so bad that we published a comprehensive home search guide to help readers navigate the market.
But lately, list prices have been falling. Fueled by higher mortgage rates and inflation, homeowners in the region — and across the country — are slashing prices by hundreds of thousands of dollars. That’s sweet relief for buyers who have been waiting for some sort of sign that things are slowing down. For sellers? Not that much.
Along those lines, we also heard from a homeowner, who wrote an op-ed on the sale of her 1920s bungalow in South Los Angeles. With the market craze in recent years, real estate began to feel like a mere investment, but its history reminds us that our homes, and the context surrounding how and when we buy and sell them, mean much more than the price on the for-sale sign outside.
On the luxury side, our two biggest sales of the week were linked to deceased icons.
The first is Betty White, the legendary comedian who passed away late last year. Both of her houses went on the market soon after; the first, a beach house in Carmel-by-the-Sea, sold almost immediately, and the second just changed hands in Brentwood for $10.678 million. It’s a curious sale considering that potential buyers weren’t even allowed to tour the house before buying it, a strong indication that it was sold for demolition.
The other sale is linked to Lee Iacocca, the late automotive titan who developed the Ford Mustang. He died in 2019, and his family sold their three-decade Bel-Air mansion for $19.5 million to reality star Lilly Ghalichi. Ghalichi quickly turned the house around and unloaded it this week for $27.7 million, a profit of $8.2 million.
If you’re on the buy side, we saw a sports-focused listing on Hidden Hills, where NFL star Jared Goff offered his custom home with a putting green and chipping rig for $7.5 million. The list comes after Goff, who was drafted by the Rams with the first pick in the 2016 NFL Draft and spent five seasons with the team, was traded to the Detroit Lions last season.
As always, while you catch up on the latest news, visit our Facebook page and like it, where you can find real estate stories and updates throughout the week.
A hot market cools down
Home sellers are increasingly lowering their sales prices as buyers, constrained by higher mortgage rates and general inflation, have become less willing to enter the housing market at all costs, Andrew Khouri writes.
The growing number of price cuts, shown in data from Southern California and across the country, is one of the strongest signs yet that the previously red-hot market, fueled by low rates mortgages and cash bidding wars, it’s cooling off.
For buyers, the market already feels significantly different from the frenetic competition of several months ago.
“The market is not the same as it was a month ago,” said Lindsay Katz, a Los Angeles agent at Redfin, the brokerage firm.
The sentimental cost of selling
The house, a small 1920s bungalow in South Los Angeles off Slauson Avenue, is for sale. In the mornings, Cassandra Lane writes, checks her email, and Zillow reminds her that something she cherishes is offered to strangers.
“Fear builds in my stomach. I’m not ready to go. But two months ago, after ongoing conversations with my husband Marcus, a real estate agent: It’s a seller’s market right now. House prices are at an all-time high, but experts predict that another real estate bust is just around the corner. — I agreed to let him list our house to ‘test the market’”.
“We bought our house for $400,000 in 2015. It was difficult to qualify for the loan and buy the house from the black woman who owns it. She said she was ‘quietly’ testing the market and at the same time trying to protect her house from investors who were on a roll selling houses nearby at prices people like us can’t afford. ‘This area is changing a lot,’ she told us.”
“Now when I look at the listing for our house, I feel like the investors she hated.”
Betty White’s house is sold without opening its doors
That was fast. A few weeks after Betty White’s longtime home went up for sale in Brentwood, the colonial-style place sold for $10.678 million, or $103,000 more than the asking price.
Buyers were quick to snap up the comedian’s real estate portfolio, either because of the pandemic market or wealthy buyers who wanted a piece of White’s legacy. His other home, an ocean-view beach house in Carmel-by-the-Sea, recently sold for $10.775 million, a whopping $2.825 million more than the sticker price.
The Brentwood sale is even more surprising considering that potential buyers were not allowed to enter. According to the listing agency, tours only showed the exterior.
Reality star flips car titan’s estate
The former home of Lee Iacocca, the late automotive visionary who developed the Ford Mustang and saved Chrysler Corp. from bankruptcy, just changed hands in Bel-Air for $27.7 million.
Iacocca lived in the house for nearly three decades, entertaining guests including Frank Sinatra and Ronald Reagan, before she died in 2019. Her daughter sold the property a year later for $19.5 million to Lilly Ghalichi, a reality star who appeared on Bravo. show “Shahs of Sunset”.
The sale marks a quick and successful turnaround for Ghalichi. She and her husband, Dara Mir, renovated the interiors during their two-year stay before putting it up for sale for $32 million in April and receiving an offer less than a month later.
Former Rams star looking to sell after trade
NFL star Jared Goff, who spent five seasons with the Rams before being traded to the Detroit Lions last year, has listed his Hidden Hills home for $7.5 million.
The California native has owned the property since 2018, records show. He made a few additions during his stay, adding a putting green with a chipping deck on the upper level to the leafy backyard.
Covering 1.4 acres, the contemporary-style community makes the most of its space with a 5,000-square-foot main house, 1,100-square-foot guest house, and a spacious patio overlooking a custom pool and spa.
what we are reading
In the wake of the Jan. 6 hearings, Curbed took a look at a profession that was “strangely well represented” among the troublemakers on Capitol Hill: real estate agents. The outlet gave updates on five real estate agents. One served 60 days in prison and went back to selling houses. One is running for Governor of Michigan.
Now here’s a number that’s really shocking: $27.8 trillion. That’s the total value of US homes in the first quarter, according to the Federal Reserve. It is a record and almost 20% more than the previous year, as prices and the rate of inflation increased. The Hill has the history.