Nicolas Cage's Newport mansion mess a sign of trouble for market, or just star?
It may go down as one of the more memorable real estate blunders in New England history.
Nicolas Cage shelled out a whopping $15.7 million to buy a Roaring Twenties mansion on Newport's waterfront back in 2007, when the real estate market was clearly past its prime.
Cage, whose personal travails seem to be growing by the day - witness his arrest in New Orleans - recently unloaded the 26 acre Gray Craig Manor estate for a relatively measly $6.2 million.
So are all those rich celebs finally getting their comeuppance? Is the bottom is finally falling out from the mansion market?
Well not so fast. While that would make a fascinating story line, Cage's Newport mansion mess is arguably the latest sad chapter in a personal meltdown being played out on a global stage.
As the real estate market peaked and began its long decline, Cage went on an international mansion buying spree. At about the same time he plunked down $15.7 million in Newport, he plunked down another $10 million for an 18th century English estate.
By the time he was through, the actor - whose best acting moment came, ironically, playing a drunk in "Leaving Las Vegas" - had accumulated a portfolio that included a castle in Germany and glitzy addresses in Las Vegas and California.
Then trouble hit. The IRS came calling, saying Cage owed millions in taxes - there was also a falling out with a business partner who he is now suing for $20 million.
Cage went overnight from crazed mansion buyer to desperate seller - and the market turned on him with a vengeance.
He wound up losing several of his 15 mansions to foreclosure - others have been sold under pressure from creditors.
It wasn't that any of these mansions, in and of themselves, were bad investments.(Though he does appear he overpaid for his Newport palace, which last sold for $10.8 million back in 2000.)
But real estate is an illiquid investment - especially at the very top of the market.
Normally it can take years to sell off a mansion - there are only so many buyers out there with the big bucks to buy these estates.
That's why it makes no sense at all to go on a mansion buying spree - if the market dips or your finances take a turn, there is no Plan B to get you out quickly without suffering catastrophic losses.
And desperate mansions sellers, as Cage must now realize, get taken to the cleaners.
