The hot market for mega mansions in Los Angeles has cooled.
High-octane activity in 2017—including Beyonce and Jay-Z’s $88 million purchase in August and the listing of the most expensive home in the U.S. for $350 million—gave way in the fourth quarter to slowed sales at the highest price points, according to a report Thursday from brokerage Douglas Elliman.
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Fewer blockbuster sales caused the median price to dip while inventory shrunk as owners pulled stale, overpriced listings from the market.
"One of the things we’re seeing in high-end markets across the country, the inventory is dropping … because the overpriced inventory that’s been sitting for a couple of years are being left to expire," said Jonathan Miller, president of appraisal firm Miller Samuel and author of the Douglas Elliman reports.
Meanwhile, moderately priced mansions are still selling swiftly, according to the data.
Luxury neighborhoods like Bel Air, Brentwood andSanta Monica saw median prices skyrocket in 2017.
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Los Angeles, where strict zoning laws limit new development, is suffering from a shortage of inventory. In Mar Vista and Venice, it took the average home to sell in less than a month and a half. By the end of 2017, there was little more than a month’s worth of supply in either neighborhood.
"The market is moving very fast," Mr. Miller said.
Inventory was tight even in luxury second-home market Malibu, where sales began to outpace supply, according to the report.