A new warning signal from the real estate market emerged Wednesday as news broke of uber-celebrity Kylie Jenner cutting the price of her Beverly Hills mansion significantly, and not for the first time.
Jenner first purchased the mansion in 2018 with her then-partner Travis Scott for a reported $13.4 million, according to TMZ. The couple listed the property just four years later in 2022 for a whopping $21.9 million, but literally nobody wanted it. So they dropped the price to $19.99 million in March of 2023. Still, no one wanted it.
The listing was removed from the market entirely in September, but it just popped up again with another massive markdown. The current price is $17,995,000, and I’ll be gobsmacked if anyone wants this house with interest rates as they are right now. And this massive, relatively unspoken pricing crisis within the market is not just limited to huge properties in really terrible markets (ie: basically every major city). (RELATED: Housing Market ‘Comeback’ Isn’t What It Appears, We’re Still In Trouble)
Apparently, homes in Texas are also plummeting in value. One example shared by a Twitter channel that tracks the stock of investment genius Michael Burry showed a home in McKinney, Texas, that was originally listed for $890,000 on Feb. 2, 2024, that already cut prices by $125,000 by Feb. 26. Even late sex trafficker Jeffrey Epstein’s “House of Sin” near the Arc de Triomphe in Paris was sold for $2 million under the original asking price, according to The Mirror.
Texas homes are starting to rapidly lose value 😬
$125,000 price cut in less than 17 days pic.twitter.com/97q2mPQNak
— Michael Burry Stock Tracker ♟ (@burrytracker) February 28, 2024
All of this is happening while outlets like Business Insider claim that home prices soared in the U.S. for the fourth quarter in a row. People might be listing their homes for well over what they’re worth, but that doesn’t mean they’re being bought at that price.
In almost the same breath, “experts” claim there is no crash on the horizon, despite a cooling-off of the market. It feels like everyone is looking at this situation all wrong. So, let’s talk about this from a macro-perspective: the way this could impact your life and the lives of the people you love.
If you bought a property in the last two or three years or so then you likely overpaid for it and you’re stuck with a completely insane interest rate on your mortgage. Therefore your property is most likely overvalued in terms of what you could probably get for it now, but you’ll be paying significantly more to your bank over the course of your mortgage than your home is worth. And if you’re stuck with a high interest rate now and hoping to refinance in a few years … Sorry, but that’s not how that works.
US Housing Market Sees Biggest One-Year Drop In A Decade | @DailyCaller
Did you buy a house in the last year even though I told you repeatedly not to do so?
Well it turns out you might be as screwed as I LITERALLY SAID YOU WOULD BE https://t.co/G9ExQvNskc
— KAY SMYTHE (@KaySmythe) May 22, 2023
Yes, there are ways to refinance a home if the value has dropped, but it really depends on how much debt you have. Lending standards are already tightening significantly, according to Forbes, so I wouldn’t be surprised if banks stop allowing for refinancing in the near future, particularly as more and more families realize they’ve overburdened themselves with shoddily built McMansions and seek to downsize or simplify. (RELATED: Real Estate ‘Apocalypse’ Could Destroy American Economy, Midsize Cities, WaPo Finally Realizes)
“With mortgage rates at the highest level since the early 2000s and affordability at a record low, many potential buyers are priced out of the market or unwilling to buy a home in fears of home-price declines,” CoreLogic’s deputy chief economist Selma Hepp told Forbes.
“[W]hile it may be a difficult time for prospective home buyers right now, the market conditions are much less competitive [than] they were earlier this year,” Hepp noted. “[This] offers an opportunity for buyers to come in and not have to compete with other buyers and potentially even get a discount off the list price.”
But unless you can buy a house outright (without a mortgage) you probably shouldn’t even think about doing it right now. Your friends might have a fancy new homes that make you jealous, but they’ll likely be working well into their senior years to keep it. Instead, sit tight, save up that cash and buy a dump to renovate.