More than four years after the housing market peaked, many of the nation's wealthiest homeowners are slashing prices in earnest. The asking price on the late Brooke Astor's Park Avenue duplex has plummeted to $24.9 million from $46 million. Thursday Peter Sperling, son of the University of Phoenix founder John Sperling, dropped the price on his San Francisco limestone mansion to $47 million; he had been asking $65 million since 2006.
Then there are the ultimate holdouts: a rarefied slice of extremely wealthy sellers who are holding the line on today's deal-making, price-slashing mentality. Even as their properties have lingered on the market, these sellers haven't budged on initial asking prices, some of which were set in the waning days of the housing bubble.
Suzanne Saperstein, ex-wife of Metro Networks founder David Saperstein, is still asking $125 million for "Fleur de Lys," a 41,000-square-foot, French chateau-inspired mansion near Beverly Hills with gold-embossed leather wall coverings and a ballroom. The listing has been on the market since at least April 2007, a month when the Dow passed 13,000. Mr. Saperstein has an equestrian estate that's been asking $75 million since at least August 2007.
Tour the multi-million dollar homes of some sellers who are refusing to cut asking prices.
Also sitting on the market is the 6,500-acre Carmel Valley, Calif., ranch owned by Jim Kirk, who founded rental equipment company NationsRent, which sold for $600 million in 2006. Purchased for about $10 million after a five-year search, the property—with a four-bedroom main house, hiking trails and other structures—has been listed at $33 million since November 2006.
With housing prices off about 28% from their peak in 2006 according to Standard & Poor's Case-Shiller Index, some real estate agents say waiting is a risky strategy. "Everyone, from bottom to top, got hurt in the financial panic, and it's reflected in the high-end of the housing market being frozen," says Mark Zandi, chief economist of Moody's Analytics. He adds that price declines, originally confined to the bottom of the market, have begun migrating upward.
"We've never been in a more price-sensitive market," says Janet Owen of Sudler Sotheby's International Realty, who recently got the listing for the Chicago mansion of J.P. Morgan's Jamie Dimon. Originally listed for $13.5 million in 2007, the home as of August was listed at $6.95 million. It went into contract in late September. "The smart sellers respond to the market," Ms. Owen says.
Sellers Who Caved on Price
While some wealthy have held firm on their asking price, others have cut their prices significantly—some by more than 50%.
Some holdouts and their brokers defend their prices, arguing that their estates would be difficult, if not impossible, to replicate today. "I feel the property is worth every penny—and probably then some," says Tommy Hilfiger co-founder Joel Horowitz, who has been asking $100 million for his 210-acre estate in Zephyr Cove, Nev., since July 2006, when the National Association of Realtors' then-Chief Economist David Lereah said that housing appeared to be headed for a soft landing in most markets.
Mr. Horowitz notes that he and his wife Ann spent a year designing the home and three years building it and bought items for the home on their travels before it was even built—including lighting fixtures, fireplace mantels and 400-year-old flooring from French châteaux.
Others point to recent mega-deals, saying it's simply a matter of finding that one right buyer. London developers Nick and Christian Candy in September reportedly sold their Monaco penthouse for nearly £200 million (about $314.3 million), believed to be one of the most expensive residential real-estate deals in the world. Since buyers can be expected to come in with lowball offers, cutting the asking price would be akin to negotiating with yourself, says former New York Giants running back Tucker Frederickson who, with a partner, has been asking for $50 million for a 5,000-acre cattle-and-shooting ranch in Florida since 2008.
Is the Price Right?
With unemployment hovering over 9%, some consider such lavish, over-the top houses out of sync with the national mood. "Do you really want to be rubbing it in people's faces when they've been searching for work for 18 months?," asks Cornell University economics professor Robert H. Frank.
While many home sellers can be slow to adjust to the market, the very wealthy can be the slowest of all. "That stratum of the population is not impervious to what's happening in the market, but they operate by their own set of dynamics," says Sam Khater, senior eco
nomist at real-estate research firm CoreLogic.
Still, it's a rule of thumb that the longer a listing lingers, the less desirable it often seems to buyers. For some of these holdouts, brokers have masked length of time "on market" by avoiding officially listing them or yanking them on and off multiple-listing services. Instead, properties are marketed on brokers' own Web sites, by word of mouth or through targeted mailings. Candy Spelling's "The Manor" in Los Angeles officially hit the market in March 2009, for example, but was shown in 2008.
Drew Mandile of Sotheby's International Realty, who represents Mr. Saperstein's equestrian estate, says he and his colleague "go dumb" any time a prospective buyer asks how long the property has been for sale. A response could invite fruitless inquires about how low a buyer could bid. "Do you think a seller has ever told a broker how much he would ever take?"
Write to Juliet Chung at firstname.lastname@example.org
Corrections & Amplifications
A Carmel Valley, Calif., ranch for sale by NationsRent founder Jim Kirk is 6,500 acres. An earlier version of this article incorrectly said the ranch was 600 acres.