In the LA Mansion Market, Steep Discounts Are the New Normal

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Brokers expected a drop-off this year. They didn’t anticipate what came next.

-- Los Angeles is reeling from successive waves of labor strikes and budget shortfalls. Now, even the city’s rich are feeling the pinch: Its ultra-luxury housing market is subject to deep discounts, brokers say.

In early August, a 19,000-square-foot, new-construction, “French chateau”-style mansion in Bel Air closed for $15.8 million, according to Zillow, well below its initial asking price of $27 million. Similarly, a Beverly Hills mansion whose decor was dubbed “Game of Thrones meets Harry Potter” sold in late July for a recorded $16.8 million, a steep drop from its original asking price of $22 million.

Those taxes were added to the extant .45% transfer tax, meaning that someone in Brentwood who sells their house for $20 million will now be on the hook for about $1.2 million. Where the market goes from here, brokers say, is an open question with a series of potentially troubling answers. Not only are interest rates still high and the heightened transfer tax still in effect, but a proposed wildlife ordinance threatens to impact additions and renovations in Bel Air, the Hollywood Hills and elsewhere.

 

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