The Celebrity Power of Celebrity Real Estate

Suzanne DranowRecently it was Leo DiCaprio and his three bed/two bath $10.95 million Malibu listing. This week Reese Witherspoon enters the real estate octagon with a reported off-market $20 million price tag on a Pacific Palisades manse she bought in 2014 for $12.7 million.

The actual value of these properties aside, I’m amused by the protestations emanating from the “mere mortal peanut gallery” wondering what makes these stars think they can get such stratospheric prices for their properties. Hint: It’s partly due to the fact that these people are buying the magazines, checking the websites and watching the TV shows that report on such matters.
Living and working in both New York and Los Angeles, celebrity is a fact of life and after a short while, one becomes inured to any mesmerization. As I wrote in an recent post, for every high-dollar celebrity real estate sale, there are 30-40 “regular people” high-dollar sales (while only 10 in Malibu, due to the concentration of celebrity in that town). I’m writing about this because people always wonder what effect these sales have on “moving the needle” of prices for the rest of us.
Many celebrities sell their homes off-market to avoid the public scrutiny of their net-worth, or they simply want privacy.  Some celebrities happily publicize their listings as a way to get their names in the news (which is why on very very slow news weeks, gossip outlets will report on the tricked out $420,000 Northridge condo in owned by a 1990s sitcom star). And then there are the celebrities who really don’t care either way — like Ellen DeGeneres, who seems to flip homes the way a short order cook flips pancakes.  
These celebrity sales reports are helpful as they publicize benchmark prices for different property market segments. For every celebrity home with a gold plated spa tub, there’s an equally tricked out home featuring a solid platinum bidet owned by some person you’ve never heard of (yet, who made their fortune with a patent on a machine that corrugates the cardboard used in shoe boxes). The $420,000 “celebrity” condo sale allows an agent to use it as a comparative property for their $500K condo client, and the $15 million dollar Bel Air property (featuring a small vineyard) sets the bar for the ego driven luxury property buyer who wants to one-up a friend or business rival.
Having worked with luxury buyers, though the celebrity status of a property helps with publicity, gives it a pedigree and adds a degree of allure, at the end of the day, a two bedroom beachfront home or a 20,000 square foot home in the Bird Streets are only going to be worth “just so much” for the buyer. That Johnny Depp owns the (fantastic) unit currently on the market at the Eastern Columbia will certainly bring it to the attention of more downtown buyers than if it were owned owned by his accountant, the eventual sales price is more determined by supply and recent comparative sales, and less so by the fact that someone had his “21 Jump Street” poster on their wall.
People love talking about celebrity property. But then again, almost anyone I meet loves talking about “regular” property prices, as well. 
I’d write more about this, but I have to sign a listing with a guy who invented this incredible process for corrugating the cardboard they use in shoe boxes.

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