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Hard times for mansion sellers?

Posted by Scott Van Voorhis December 28, 2012 07:49 AM

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The economy and the real estate market may be picking up. But the very high end - mansions worth $2.85 million and up - still stinks.

The Real Estate Café's Bill Wendel has pulled together some great stats that reveal major price reductions over the last few months by mansion owners across Massachusetts.

One of the latest mansions to sell for a big discount can be found in Weston, where 15 Claridge, a modern, 20 room mega estate built in the 1990s, just sold for $6.2 million.

That's after it first hit the market for more than $10 million back in May 2010 and then steadily dropped in price, to $8.9 million at the start of the year, and more recently, to $6.8 million.

The assessed value is $7.8 million.

Sounds like a steal! OK, just kidding, but check out the write-up.

Stunning one of a kind Kasota stone and stucco home designed by renowned arch. Tom Catalano with app.15,000 sq.ft of living space is sited on 3.75 parklike acres w/ pool, hot tub and tennis court. Dramatic two story foyer w/ limestone steps, Mahogany Library w/ coffered ceiling and fireplace. Sun-filled living room w/ fireplace and hand-painted ceiling, Dining room w/ paneled walls and fireplace. Kitchen/familyroom with atrium eating area, sun room, play room, exercise rm, Billards, access & apt

Overall, twenty-two super luxury listings across the state have dropped their asking price by at least $450,000, with half reducing by a million or more.

Wendel questions whether we are seeing a push by the rich to unload their mansions before the dreaded fiscal cliff sends taxes up on the super wealthy, along with everyone else, come Jan. 1.

Here's a piece on the so-called "mansion cliff"  - the super rich could wind up shelling out more in capital gains taxes from the sale of their estates if they can't find a buyer by the end of the day on Monday.

Still, Wendel offers this cautionary note - the price reductions, while certainly attention grabbing, appear so far to be happening only with a small subset of all the super luxury homes on the market right now in the Bay State.

Right now, only 2% of the luxury listings above $2.85M have been
priced $1M below their assessed value, and 4% -- or less one in twenty
listings during the past three months -- have reduced their asking
price a half million or more below their assessed value.

I am no expert in mansion sales, but finding a buyer for a $6 million or $7 million house can typically take a year or two. Knocking down the price by a million or two in hopes of getting a buyer to bit in a matter of months may sound like an effective strategy, but we are not talking about buyers who are cutting coupons.

Basically, it may not be the best approach - who knows it may even turn off some buyers with millions in cash to burn and social standing to maintain.

Here's Wendel again.

Significantly, those price reductions DON'T guaranteed an acceptable
offer: half of the listing are still active listings, and a quarter
have been pulled off the market.

Only two of the 22 the luxury listings with price reductions of a half
million or more below their assessed values have closed in the past 90
days, but five other data points suggest that the Mansion Cliff may
yet reveal itself:

1. A week ago, an Oysterville listing that was listed just $7,400
below it's assessment, closed for $457,400 below it's assessed value;

2. Four other luxury listings priced over $2.85M have gone under
agreement since November 21, 2012, the week before Thanksgiving, after
reducing their asking prices one half million to more than 1.5M below
their assessed values (AV) as follows:


This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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