Ever wonder where the top of the residential Market is? A small part of our practice at Greenfield over the years has been consulting on really top-tier, “trophy” real estate. Valuing these properties is part art, part science, and everyone in that rarified realm is always trying to figure out where the top might be.
It appears that some of the very top of this market is softening, according to an article yesterday on CNBC.com by Robert Frank, their wealth editor. As it happens, tax law changes and a pull-back by foreign investors (particularly from China) means that the very top tier of properties have seen pricing reductions this summer. Indeed, the top 500 homes on the market saw total price reductions of $1 Billion of late.
For example, the Ziff family estate in Florida was previously on the market for $195 million. After two price reductions in a year, it is now down to $138 million, a reduction of over a quarter in its offer price, and still with no takers. Sean Elliott, one of the leading brokers for mansions such as this, notes that there are no comparable transactions to go on. Indeed, often such properties have to test the market first, and then adjust prices accordingly.
The article makes good reading, even if you’re not presently in the market for a $100 million beach house: The $1 billion price cut: Luxury real estate gets slashed.
This post first appeared on From A Small Northwestern Observatory... | Finance, please read the originial post: here