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Despite the Buzz, Celebrity Homes Languish on the Market

Star-owned properties take about 36 days longer to sell than other homes, Redfin finds

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Actress Julia Roberts's 2-acre property in Hanalei on Kauai’s North Shore has been on the market for 18 months.

Hawaii Life Real Estate
Actress Julia Roberts's 2-acre property in Hanalei on Kauai’s North Shore has been on the market for 18 months.
Hawaii Life Real Estate

One might imagine that a Hawaii beachfront vacation home associated with Hollywood A-Lister Julia Roberts would attract multiple bidders. However, it has not yet happened.

After lingering on the market for more than 18 months, the "Pretty Woman" actress recently cut the price to $19.5 million from $29.85 million, trying to find an interested buyer.

More:A “Pretty” Discount: Julia Roberts Chops Price of Hawaii Beachfront Home to $19.5 Million

Such cases aren’t rare.

On the East Coast, Gwyneth Paltrow and her ex-husband Chris Martin have recently sold their TiBeCa penthouse after reducing the asking price from $12.85 million to $9.995 million in February. The home first came on the market in March 2016 with the asking price of $14.25 million.

No need to even mention Michael Jackson’s Neverland Ranch or Prince’s Paisley Park. The former has been lingering on the market with a price tag of $100 million while the latter has been temporarily turned into a museum, not being able to find a new owner after his death in April.

More:Michael Jackson’s ‘Neverland’ Estate Courts Chinese Buyers

Apparently when it comes to real estate, association with an immensely popular celebrity doesn’t always translate into a quick sale. As a matter of fact, it takes longer for celebrities to offload their homes, according to a report released Tuesday by Redfin.

By analyzing homes bought and sold by 60 celebrities in Southern California from 2011 to 2016, the Seattle-based real estate portal concluded that on average, star-owned properties stay on market for about 36 days longer than other homes in the area. And they usually sell for less than the original asking price.

For example, actor Matthew Perry had to settle for $2.85 million less than the original $25 million he thought his Malibu home was worth. Pop singer Katy Perry, who recently made news with her ongoing quest to buy and convert a former convent into a house, sold her Los Angeles home for $1.36 million less than the original asking price. Singer and fashion designer Jessica Simpson’s Beverly Hills estate was sold for $6.4 million, almost $1.6 million less than what she had wanted.

The list goes on and on (check out the interactive map below).

<a href='https://www.redfin.com/blog/category/celebrity-news'><img alt='Celebrity Map ' src='https://public.tableau.com/static/images/J7/J7BR7F8NC/1_rss.png' style='border: none' /></a>

"Celebrities will sometimes add amenities to a home, which might not be a selling point for future homebuyers," said Alec Traub, an agent with Redfin. For example, a celeb might install a basketball court in the basement of a home, where another person might want to use that space for something else. Those homebuyers may be less inclined to want to pay the initial asking price.

Another reason why star-owned homes tend to be harder to sell is because they’re harder to show; they’re not exactly scheduling weekend open houses for the public.

"You wouldn’t want to show a famous person’s home to just anyone, since stars value their privacy and don’t normally want to make their business public. Anyone looking to tour a celeb home would have to go through a vetting process, so the sale of the home takes a little longer than other homes," he added.

It's common for homeowners to overvalue the amenities in their home, especially in luxury housing, said Redfin's chief economist Nela Richardson.

Additionally, luxury buyers are also more fickle than traditional buyers and are more effected by stock market swings and shifts in the global economy which can impact their portfolios. "It doesn't matter if you're Jennifer Lawrence or Tom Hanks, it's important to understand the buyers in your local market and to correctly price your home," said Ms. Richardson.

Leonard Steinberg, president of brokerage firm Compass in New York concurred, adding that in the real estate markets, correct pricing is everything. "Assuming a celebrity associated property is automatically more valuable than market rates can be hopeful...and there is a fine line between hope and delusion," he said.

Write to Fang Block at fang.block@dowjones.com

 

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