Expensive L.A. Homes Lagging in Sales - ktla.com

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Expensive L.A. Homes Lagging in Sales

Even the mega-rich are suffering the effects of a down economy and a challenged real estate market.

via KTLA News

LOS ANGELES ( KTLA) -- Is it possible that even the mega-rich are suffering the effects of a down economy and a challenged real estate market?

Recent indicators suggest the answer is a resounding yes.

While it is certainly no secret that the lower-end housing market has suffered in the past several months -- framed by a growing number of foreclosures, short sales, and depressed home values -- the latest housing segment to reflect the struggles that all homeowners are facing is the multi-million dollar mansion sector.

Analysts and real estate agents report that many mansions are now wearing their 'for sale' signs for many months at a time, and that the bottom of the mansion-for-sale market has not yet arrived.

The L.A. Times examined monthly sales data in 20 high-end Southland zip codes -- from Beverly Hills to Solana Beach -- through October in 2010, using information provided by research firm MDA DataQuick of San Diego. And in 10 of those areas, home values are now lower than they were a year ago, suggesting that the downward trend is still in progress.

Overall, 19 of the 20 communities analyzed remain below their high point in real estate values. Though Southland homes across all economic levels have reportedly rebounded 15% over the past 18 months, the upper end homes in affluent zip codes have shown few signs of recovery. Prices in high-end communities have dropped nearly 26% from their January 2008 peak to April 2010, and have gained back only 5% since then.

"Malibu has taken the worst hit," according to Sandra Miller, an agent on the Westside. Miller says that less than a third of the listed properties in Malibu are selling, and median prices are down roughly 25%.

Agents and analysts say one simple reason the high-end market is lagging behind the mainstream housing market can be summed up in three letters: e-g-o.

The more wealthy home sellers may have more resources to hold to their original asking price, and may not want it to appear that they are in financial trouble or in need of funds. As a result, they may be unwilling to reduce their asking price even as properties linger for months on the market.

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