Jocks and real estate, apparently not a good combo
OK, what is it with sports stars and real estate?
Anyway, here’s another example of a big name jock losing millions in the real estate market.
Soon to be Cavs star Shaquille O’Neil just lost $3 million on the sale of his palatial Miami estate.
Shaq recently unloaded his nearly 20,000 square foot waterfront palace – complete with a pool emblazoned with the Superman logo – for $16 million.
Sounds like he made out, right? Wrong.
The NBA superstar had shelled out nearly $19 million for the estate in 2004, before putting it on the market the next year for a whopping $32 million.
That was the height of the boom, so there’s was some logic to that.
Of course, we all know what happened after that. As the market deflated, Shaq’s asking price came steadily down, first to $29 million, then to $22.5 million this spring.
Then down another $7.5 million to the final sale price. Ouch.
Certainly there’s a lesson here for Manny Ramirez, who put his own deluxe, downtown condo in Boston on the market this spring for a stunning $8.5 million.
Instead of lowering his price, Manny, clearly an astute observer of the real estate market, actually boosted the price. Not by a few thousand, but by another $1.6 million from when he last tried to sell it, back in the glory days of 2005.
Get ready for another trip to the cleaners.
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most of these guys and their "financial advisors" are braindead. Many of the advisors (just like realtors) are totally transaction driven and could care less about their clients. Just generate a fee, that's all that matters....
The depreciation of luxury items like this isnt really news. If you spend 300k on a Bentley, odds are that its (only) worth 200k in 2 years. Houses are no different. Built-in flat panel TVs and appliances age cosmetically and functionality-wise. Shaq's house probably was cutting edge 5 years ago, but honestly its probably a tad-bit dated today (if living with the latest and greatest of everything is your thing, that is). In general, RE price gains and losses really has more to do with inflation/deflation pressures, credit situation, regional economy, community, and demographics.
Holy cow. I'd love to find out how much he paid the advisor, broker, whoever told him to buy a house for $19 mil and then list it for $32! How did they justify that amount? Oh well, at least he cut his losses now; just too bad for him he didn't jump ahead of the market a year ago.
And I could still find much better ways to spend $16 million than to buy that thing. Cool pool, and amazing location, but come on - guess that house is just not my taste, cause it doesn't look like $16 million to me.
jocks are almost universally pretty lousy role models for anything, outside the sport they play.
Depressing the media holds them up as idols.
so big deal. he ONLY lost around 15% after owning & enjoying the house for 5 YEARS (& enjoying significant tax breaks for home ownership). MANY people have fared MUCH WORSE and DON'T have the cushion of a TREMENDOUS ANNUAL SALARY! this is much ado about nothing, boo-hoo for these over-affluent people.
I remember seeing an interview with Johnny Damon and his new(er) wife, and she was prattling on about real estate and how she was buying and selling, and making lots of dough. This was back at the peak of Real-O-State mania.
She was saying how she had a Golden Touch, but all I could see was Johnny watching his Yankee money go up in smoke. Good times.
tommyb the loss Shaq incurred far exceeded the value of any tax benefits. These clowns can only deduct the interest on the first $1mm in mortgage debt. Also real estate taxes on Shaq's house in Florida would be very high...
If you moved to miami for work 5 years ago, spent just shy of one year's salary on a house, and sold it today for a 15% loss, I'm guessing you'd be OK with that. Also, I'm guessing that in his 8 years in LA during the bubble, shaq made more than a $3m profit on his house. So he's probably still ahead of the game.
Hung (#1) Realtors that list homes for outrageuos prices are not transaction driven, they are stupid and incompetent. They will never generate a fee from that transaction. That said, sellers set the final asking prices, not Realtors.
I know that you take advantage of every opportunity that you can to slam agents, but it is not correct when you say that all real estate agents are transaction driven. Some of us are relationship driven and actually do what we can to protect our client's interest.
The majority of jocks are not astute invenstors.
The majority of Americans are not atute investors.
What's the diff???????
Wonder if the buyer got their 8k tax credit?
Shaq got killed on that house. The annual taxes on that house were over 200K a year on top of probably a 200K operating budget. When you get to mega mansions your pool of available buyers shrinks fast! There are less than 1000 people in the whole USA that could afford that house. When Donald Trump sold his spec house (Abe Gosman's foreclosed Palm Beach palace) there were less than 500 people worldwide that could pull the trigger on that house (list was 150mm, sold for 100 mm). A Russian tycoon bought it.
This blogger might want to review your comment before posting it.
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