Properties see price cuts ahead of Measure ULA taking effect
By Dolores Quintana
Bel Air is home to this modern Spanish-style estate that has hit the market and has recently reduced its price while seeking a buyer as reported by The Wall Street Journal. It is an absolutely decadent paean to luxury living in the hills above the Westside of Los Angeles. With about 40,00 square feet of living space, this hillside abode has three stories filled with arched doorways, terraces, a 75-foot infinity pool that flows into a 20-foot waterfall, a movie theater, a basketball court, a wine cellar with 1,200 bottles and an underground parking garage with room for 20 vehicles.
Originally, the home was listed at $100 million but last month the development team decided to lower the price to $59 million which is an incredible price for such a magnificent showplace of a home. It represents a 41% reduction in the price from 2018.
One of the listing agents for the home, Shawn Elliott of Nest Seekers International, said, as quoted by The Wall Street Journal, “We talked about what price would attract buyers but still be a pill [the developers] could swallow.” The listing agents and developers, Ty Cueva and Dean Hallo obviously came to an agreement on a price reduction.
Because of the current economic climate, even luxury properties are facing the reality of price reductions since even the rich market in Los Angeles isn’t as open to that kind of spending anymore. Many developers and other sellers are trying to beat the new transfer tax law that is due to go into effect on April 1, 2023, which will increase the prices paid on luxury sales to over five and ten million dollars. Another consideration is a land ordinance that will be on the ballot to protect a planned new conservation area in the Santa Monica Mountains which would inhibit development in the area, especially that of megamansions to protect the wildlife of the mountain wilderness.
Luxury home sales have dropped dramatically to 51.9 percent in the last quarter of last year according to brokerage Douglas Elliman’s report which also shows that luxury homes now stay on the market an average of 96 days. That is a ten percent increase in the time it takes to sell an estate.
This is a real turnaround from the salad days of the pandemic real estate boom. More information from the Elliman report claims that bidding wars on properties fell by half down to 24.5 percent and were down from a 50.7 percent high.
Rayni Williams of the Beverly Hills Estates said, as quoted by The Wall Street Journal, “No buyer at this juncture wants to feel they’re paying 2021 or 2020 prices.” Ty Cueva estimated that the price of building that same home that he is selling in today’s market would be around $80 million if the rising costs of construction were factored into it and that the asking price is now below the replacement value.