There are several factors behind the price drops. The high end of the market didn’t fall as much or as early as the broader market, since there weren’t as many distressed sellers that were forced to sell. Those wealthier sellers have hung on to their properties, waiting for prices to approach 2008 levels.
Now that they see that the prices of 2008 aren’t likely to return anytime soon, many are deciding to drop their prices just to get a deal. The increase in sales has itself spurred sales, as wealthy sellers see a larger number homes in their neighborhoods trading at lower prices.
“There is now a critical mass of data so sellers can say, ‘Well, this is the new reality,’” Boomsma said.
Of course, bargains are all relative in the mega-mansion market. And homes priced at $1 million or more represent a tiny slice of the overall market, with high concentrations in New York and California.
Yet some mega-mansions have seen price cuts of 30 percent or more in recent months.
A private beachfront-compound in Carpinteria Calif., has sliced $7.2 million from its price tag and is now being offered for $14.9 million, according to Luxury Portfolio. The property includes a six-bedroom main house, guest villa, tennis court, swimming pool, spa and 95 feet of beach frontage.Page 2 of 3 | Prev Page | Next Page