Real Estate newsletter: A hot market starts to cool
Welcome back to the Real Estate newsletter. You know that other shoe we’ve all been waiting for? Well, there are strong signs that the drop is beginning, and Southern California’s historically hot real estate market is finally showing signs of cooling off.
The pandemic pushed our housing market to mind-boggling extremes, as the last few years saw record prices, all-cash bidding wars and buyers willing to pay and waive just about anything to land a home. It got so bad, we published an all-encompassing house-hunting guide to help readers navigate the market.
But lately, list prices have been dropping. Fueled by higher mortgage rates and inflation, homeowners around the region — and the country — are trimming price tags by hundreds of thousands of dollars. That comes as sweet relief to buyers who’ve been waiting for some type of sign that things are slowing down. For sellers? Not so much.
On that note, we also hear from a homeowner, who wrote an op-ed piece about listing her 1920s bungalow in South L.A. With the craziness of the market the last few years, real estate started to feel like a mere investment, but her story reminds us that our homes, and the context surrounding how and when we buy and sell them, mean a lot more than the price listed on the for-sale sign outside.
On the luxury side, our two biggest sales of the week were both tied to departed icons.
The first is Betty White, the legendary comedian who passed away late last year. Her two homes hit the market soon after; the first, a beach house in Carmel-by-the-Sea, sold almost immediately, and the second just traded hands in Brentwood for $10.678 million. It’s a curious sale considering potential buyers weren’t even allowed to tour the home before they bought it — a strong indication that it was sold as a tear-down.
The other sale is linked to Lee Iacocca, the late auto titan who developed the Ford Mustang. He died in 2019 and his family sold his Bel-Air mansion of three decades for $19.5 million to reality star Lilly Ghalichi. Ghalichi quickly flipped the home, unloading it this week for $27.7 million — a profit of $8.2 million.
If you’re on the buying side, we saw a sports-centric listing in Hidden Hills, where NFL star Jared Goff offered up his custom home with a putting green and chipping pad for $7.5 million. The listing arrives after Goff, who was drafted by the Rams with the first pick in the 2016 NFL Draft and spent five seasons with the team, was traded to the Detroit Lions last season.
As always, while catching up on the latest, visit and like our Facebook page, where you can find real estate stories and updates throughout the week.
A hot market cools
Home sellers are increasingly cutting their asking prices as buyers, constrained by higher mortgage rates and overall inflation, have become less willing to jump into the housing market at any cost, writes Andrew Khouri.
The growing number of price cuts, showing up in data from Southern California and across the nation, is one of the strongest signs yet that the previously red-hot market, fueled by low mortgage rates and all-cash bidding wars, is cooling.
For buyers, the market already feels significantly different from the frenzied competition of several months ago.
“The market is not the same as it was a month ago even,” said Lindsay Katz, a Los Angeles agent at Redfin, the brokerage company.
The sentimental cost of selling
The home — a little 1920s bungalow in South Los Angeles off Slauson Avenue — is for sale. In the mornings, Cassandra Lane writes, she checks her email, and Zillow reminds her that something she cherishes is being offered up to strangers.
“Dread gathers in my stomach. I’m not ready to leave. But two months ago, after ongoing talks with my husband Marcus, a real estate agent — It’s a seller’s market right now. Housing prices are at an all-time high, but experts are predicting another housing crash is just around the corner — I agreed to let him list our house to ‘test the market.’”
“We bought our home for $400,000 in 2015. It was a stretch to qualify for the loan and buy the house from the Black woman who owned it. She said she was ‘quietly’ testing the market and simultaneously trying to safeguard her house from investors who were on a roll flipping nearby homes at prices people like us cannot afford. ‘This area is changing so much,’ she told us.”
“Now, when I look at our house listing, I feel like the investors she detested.”
Betty White’s home sells without opening its doors
That was fast. A few weeks after Betty White’s longtime home listed for sale in Brentwood, the Colonial-style spot has sold for $10.678 million — or $103,000 more than the asking price.
Buyers were quick to scoop up the comedian’s real estate portfolio — whether due to the hot pandemic market or deep-pocketed buyers wanting a piece of White’s legacy. Her other home, a beach house overlooking the ocean in Carmel-by-the-Sea, recently sold for $10.775 million, a whopping $2.825 million more than the price tag.
The Brentwood sale is even more surprising considering potential buyers weren’t allowed inside. According to the listing agency, tours only showcased the exterior.
Reality star flips auto titan’s estate
The longtime home of Lee Iacocca, the late automobile visionary who developed the Ford Mustang and saved the Chrysler Corp. from bankruptcy, just traded hands in Bel-Air for $27.7 million.
Iacocca lived in the home for nearly three decades, entertaining guests such as Frank Sinatra and Ronald Reagan, before he died in 2019. His daughter sold the estate a year later for $19.5 million to Lilly Ghalichi, a reality TV star who appeared in the Bravo show “Shahs of Sunset.”
The sale marks a quick and successful flip for Ghalichi. She and her husband, Dara Mir, renovated the interiors during their two-year stay before listing it for $32 million in April and landing an offer less than a month later.
Former Rams star looks to sell after trade
NFL star Jared Goff, who spent five seasons with the Rams before being traded to the Detroit Lions last year, has listed his Hidden Hills home for $7.5 million.
The California native has owned the estate since 2018, records show. He made a few additions during his stay, adding a putting green with an upper-level chipping pad to the leafy backyard.
Covering 1.4 acres, the contemporary-style compound makes the most of its space with a 5,000-square-foot main house, 1,100-square-foot guesthouse and expansive patio that overlooks a custom pool and spa.
What we’re reading
In the wake of the Jan. 6 hearings, Curbed took a look at a profession that was “bizarrely well represented” among Capitol rioters: real estate agents. The outlet gave updates on five Realtors. One served 60 days in prison and is back to selling houses. One is running for Michigan governor.
Now here’s a number that’s really shocking: $27.8 trillion. That’s total U.S. home equity in the first quarter, according to the Federal Reserve. It’s a record and up nearly 20% from a year earlier as prices and the inflation rate rose. The Hill has the story.
