Okay, if any of you lurkers have been hanging around awhile, you know Yolanda has been babbling nonstop about how the high-end market has nosedived in the past few months.
But now it’s official. The first sales quarter closes this week and trained experts have issued scientific reports confirming the high-end market is shit.
Let’s take a look at last year’s first quarter. Twelve sales of $20 million or more. We’ve listed the dollar amounts below. We’ve also included the buyers who paid those exorbitant prices in parenthesis.
1. $60,000,000 (Jimmy Iovine)
2. $50,500,000 (Cindy Crawford)
3. $46,250,000 (Jim & Eleanor Randall)
4. $44,000,000 (Laurene Powell Jobs)
5. $38,000,000 (Chris Cole)
6. $35,300,000 (David Kabiller)
7. $32,000,000 (Alex Soltani)
8. $31,000,000 (Steve Cohen)
9. $30,000,000 (James Murdoch)
10. $22,000,000 (Lee Samson)
11. $21,500,000 (Brandon Beck)
12. $20,000,000 (Chanchai Ruayrungruang)
Now here’s the first quarter of 2016’s list:
1. $27,000,000 (Lynda Weinman)
That’s it! Just one lousy sale this year, and one that would barely make the quarter’s top ten had it occurred a year ago. And they practically had to give away that mess to get it sold!
And from 12 sales to 1? That’s a 91.77% drop-off in one year, if you’re keeping score. It’s bad out there, kids. Yes, we know the market is still pretty dang hot on the lower end (sub-$10 million). But the pace of these big sales tend to have a ripple effect on lower-market sales. We saw this exact same trend in 2007-2008.
Some naysayers may argue that most of these big sales take place off-market. Maybe the big first-quarter transactions just haven’t yet come to light. Yes, there could be a couple big ones out there we haven’t seen. That’s always possible. But usually when these big sales go down, Yolanda hears about it in advance. We’re not trying to toot our own horn. It’s just that big money naturally makes noise, and people talk. That’s especially true in LA. Tricks always be flapping them lips. You just can’t keep anything in this arena confidential for long. But this year, so far, we haven’t heard a single peep. Not one.
What we have heard is that several big sales swirled down the Tinseltown real estate toilet recently. Remember the $85 million that David Geffen was gonna get for his Carbon Beach compound? Both Yolanda and our gurl Your Mama heard the erstwhile buyers were an out-of-state couple who cancelled the escrow at the last minute. Also, remember the record-breaking $18 million that Kimmy K was about to pocket in exchange for her Bel Air Crest never-lived-in house? Rumors say that deal got killed, too. RIP.
Anyway, let’s be generous and say there are two big, fat first quarter sales that are being kept quiet for now. That would still give us a 75% decline year-over-year. Any way you slice it, that’s bad.
Optimistic folks might also say that all the good inventory out there is gone, sold now. We don’t think so. There are dozens of $20M+ properties out there on the open market, and always dozens more being shopped on the down low. Buyers just aren’t there.
We’re also sure many peeps will argue that certain outside circumstances are behind the fall-off, things unrelated to the economy or election worries here at home. And it’s true that China has cracked down on big cash sums leaving the country. The FBI is also closely monitoring shady foreign nationals paying big cash sums for properties. We don’t think we’ll be seeing many more (alleged) money launderers like Jho Low or Kola Aluko show up here anytime soon.
But wait. Take a look at 2015’s list again. Notice anything peculiar about the buyers? Only #12 is a foreign national. All the others are U.S. citizens, and nearly all have lived here their entire lives. So why have Americans suddenly put the brakes on spending the big bucks this year?
Listen, kids, let’s not get it twisted. Last year was an epic, record-breaking, downright insane year for LA real estate. We had more than 30 home sales break the $20 million barrier. That’s never ever happened before, so we were expecting 2016’s pace to slow. But we were definitely not anticipating this drastic a decline. And 2016’s second quarter is already shaping up to look bleak too. The second half of the year is gonna have to really brang it to get us even remotely close to 2015.
All this might bode badly for all those Bentley-driving real estate agents out there. But more importantly, it’s also bad news for your gurl Yolanda Yakketyyak. After all, the $20 million+ market is our specialty. That’s your gurl’s bread and butter. Our playground. If those big-money buyers fade away, what’s your ho gonna discuss up in here? Our daily Bloomie’s trips? The new shade on our Lee Press-On Nails? It’s fuchsia. FYI.
We’ve got tons of bills to pay, y’all. It takes a lot of cash to stay looking this hot. That damn Benz and the Caddy ain’t gonna maintain themselves. So we’ll let you know when the GoFundMe account goes live. We’re thinking of making it a joint venture with Kanye. And to all you mega-rich beotches sitting pretty on your cash in rented digs, you’d best get to buying right now or Yolanda will whoop your booties in the damn parking lot. We’ll swang on ya. Right, Lily?