Even the wealthiest Americans are contending with today’s housing market. Take James Jannard, the billionaire founder of luxury eyewear and apparel brand Oakley, as an example.
He’s fallen victim to a challenging trend in the luxury housing market where many of the country’s most lavish and expensive homes are being priced too high when they hit the market. And now, Jannard stands to lose out on the proceeds he was expecting when he first listed the house.
For that reason, price drops aren’t surprising, especially in the saturated Los Angeles luxury market where buyers have more leverage, Anthony Luna, CEO of LA-based real-estate advisory Coastline Equity, told Fortune.
“Square footage and celebrity status don’t justify inflated pricing anymore,” he said. “Buyers want smart design, upgraded systems, and long-term value.”
Hernan said she warns her clients about the mansion tax before they prepare to sell. Take a $5 million home, for example. The seller would have to pay an extra $200,000 they “didn’t really factor in when they bought the home because the mansion tax wasn’t in play,” Hernan said.
The trend of luxury-home price drops like that of Jannard, Murdoch, and Lopez say something bigger about the housing market: a larger correction, Luna said.
“The luxury market is no longer about vanity. It’s about value and security,” he said. “Buyers are doing the math, and they’re calling the bluff.”
