It’s not only ordinary homeowners that are struggling from declining home values; celebrities too. And they’re losing money not by the thousands, but by the millions.
Recent home sales or listings by celebrities showed that they initially priced their homes much higher than their purchase prices, but were forced to reduce their prices to even lower than how much they’ve paid for the homes because there were no takers at the higher price levels.
Scarlett Johansson, who is married to Ryan Reynolds, took a loss of $2 million when she sold for $5 million the Hollywood Hills home she bought in 2007 for $7 million.
Christina Aguilera last month had to cut down her asking price again for her 6,500-square-foot Hollywood Hills home from the already reduced price of $6.25 million to $5.995 million. When she first wanted to sell it in April 2008, after buying an $11.5-million Beverly Hills home, she priced it at $7.995 million. She bought the house in 2003 for $5 million.
Priscilla Presley, the former wife of Elvis Presley, is a trustee for the 9-bedroom Hidden Hills home whose $9-million initial asking price was reduced to $6,995,000. An adjacent home, owned by her daughter Lisa Marie Presley, is also listed for $1,995,000.
Even the rich bankers need to sell during the downturn. JP Morgan Chase CEO and Chairman Jamie Dimon had to drop his asking price for his 18-room 13,500-square-foot mansion in Chicago from $10.5 million to $9.5 million in April, and then had to cut it down further to $6.95 million a couple of weeks ago, almost 50 percent of his $13.5 million listing price in 2007. If he decides to reduce the price again, it would get closer to the $4.68 million he spent to buy the house in 2000.
The foreclosed two-story home of singer Toni Braxton in Henderson, Nevada is now listed at only $1.15 million, less than half of the $2.6 million spent by Braxton and her husband when they bought the home in 2007.
As you know by now, the film celebrity that got arguably the most media mileage because of his financial troubles was Nicolas Cage. He was forced to sell many of his properties to settle his debts and taxes. Worse, some were foreclosed. Among these was his 12,000-square-foot English Tudor mansion in Bel-Air, Los Angeles, which is now with Citibank and listed for $11.8 million, 66 percent lower than the $35 million peak market price.
There are many other celebrities listing their homes, and one wonders why they too can’t wait for the real estate prices to recover before selling. Perhaps they’re moving like David and Victoria Beckham, who’re selling their country mansion in England after deciding to make the U.S. their base, or starting a family like Christina Aguilera, or they’re simply coping like most Americans whose finances have been adversely affected by the downturn.