Last week, a Los Feliz treasure — the Cecil B. DeMille Estate — came on the market for the 3rd time in a century and made international news, largely due to its owner being uber celebrity Angelina Jolie.

 

But I noticed one thing missing from every single one of those thousand-plus articles…

 

The seller is going to lose money on the sale. Like, a lot of money. And there are a few real estate lessons here for those of us who will never live in a home such as this.

 

 

First, the house. It's a beauty. In a city of historic estates, this one stands out, especially on the Eastside.

 

We're talking two acres at the top of the little mountain that Laughlin Park is built on. Views, gated, all of it. A generational asset. Arguably the nicest house on the Eastside.

 

Angelina paid $24.5M in 2017. Adjusted for inflation, that's roughly $32M today. She's been quietly shopping the house off-market for $40 million for the past couple of years…no takers. It's now listed for less than that: $30M.

 

So, just on the sale price, the home has lost value. Add in the costs of ownership, renovation, ongoing maintenance, selling fees, the mansion tax – she might be looking at a $10M haircut.

 

And that's in an area where, since 2017, homes have otherwise doubled and tripled in value.

 

So, what went wrong?

 

Maybe she overpaid in 2017. I remember that price feeling pretty high at the time. The most expensive homes in Los Feliz were around $5M back then (they're double that now), so $24.5mil was a LOT.

 

 

But there's a bigger story here. The luxury market in LA is hurting. It turns out that when you take instant, near-guaranteed appreciation off the table, which has been the LA real estate story, with only a few hiccups since 2010, and add in higher interest rates, insurance, and increased maintenance costs…buyers get a lot more cautious.

 

And we are seeing that everywhere, not just the ultra-luxury tier. 

 

-Los Angeles Apartments: down

-Big Bear/Arrowhead: down

-Joshua Tree: down

-Downtown Commercial: down

-Los Angeles Condos: down

One: You want the worst house on the best block. Not the best house on the block, which is what this one is. Being king of the castle feels great, but there aren't a lot of kings bidding when it's time to sell.

 

Two: Buy a house that everyone wants. A home is personal, but it's also an investment, so when you're buying keep an eye on resale. Angelina's 11,000 sq. ft. house may have made sense for her and her gaggle of children, but she probably would have actually made money had she cut the square footage in half. There's a sort of functional obsolescence to the giant house…when you need staff to run a house (think Downtown Abbey), your house becomes your job. Not to mention the bills. Not many buyers want to take that on, particularly on the Eastside, which is why I think this GORGEOUS, very reasonably priced home is also not selling…

 

Three: Not everything goes up, even when it feels like it must. Almost 16 years into a bull run, entire swaths of the real estate industry (not to mention most of the Millennial generation) have never seen home prices dip significantly. It's easy to forget that appreciation isn't promised.

 

       -Brock

👷🏻‍♀️ 💵   This Richard Neutra apartment building in Virgil Village got fixed up and man is it a beauty.

🎓🎓  To pay for college, skip the 529 accounts and buy your kid a house instead.

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