Home sales in Los Angeles have fallen by a staggering 48 per cent - and it's Hollywood's rich and famous who are paying the price.
Only 4,430 homes were sold in December in LA while house prices fell by a whopping 11 per cent with many stars being forced to slash the prices of their luxury mansions.
Celebrity homes cost much more than the average family home and an entry-level house for an up-and-coming star costs at least $1.4 million in LA.
Realtor Barry Sloane of Sotheby's International Realty says it's the owners trying to sell homes in the $3 million to $6 million range that are having the most trouble.
Sloane said: "A lot of those people are involved, in one way or another, with the ongoing writers' strike.
"They're upgrading from lesser houses that they're having trouble selling because of the market, so it's like a domino effect."
Rocker Avril Lavigne has been forced to reduce the price on her five-bedroom, six-bath house in Beverly Hills from $6.9 million to $5.8 million, although the property is currently in escrow.
The Hollywood Hills home is in a gated community just off Mulholland Drive, and includes a tennis court and pool.
Since she put the house on the market in February 2007, two offers have fallen through. In the public listing, her agent calls the house "One of the best values on the market today."
When it comes to real estate, stars generally aren't treated any differently than other rich people.
Mark Davis, who runs the celebrity real estate site The Real Estalker says homes generally don't demand a premium just because a celebrity was living there.
At the same time, famous buyers are unlikely to get any kind of a bargain, since sellers often push famous folks to pay full price.
Former Guns N' Roses guitarist Slash feels he overpaid for his Spanish-style Hollywood Hills home, which has a pool, a separate gym and stunning views.
He bought the house in January 2006 for $6.2 million but he sold it last December for a much less $5.7 million.
Slash is now suing his former real estate agent, claiming the house was neither as big nor as private as the agent claimed and the case is ongoing in California Superior Court.
The 70s Show TV star and Lindsay Lohan former boyfriend Wilmer Valderrama had to accept $200,000 less for his five-bedroom home in the relatively unfashionable Valley neighborhood of Tarzana.
He sold the house in January for $1.75 million.
Late night TV show host Johnny Carson sidekick Ed McMahon is also having real estate troubles. He put his 7,000-square-foot Beverly Hills home on the market In July 2006 for $7.7 million.
He has since reduced the price three times, and the house is now selling for $5.7 million.
At the $20 million-plus end, it's not unusual for houses to stay on the market for months at a time, because there are so few potential buyers.
Sloane was originally trying to privately sell a historic Neutra home on Mulholland Drive, owned by Vidal Sassoon, for $25 million.
When an offer fell through, he lowered the listing to $20 million. That was a year ago. "There's usually a waiting list for homes over $20 million," says Sloane. "Now, it's slowing down a tiny bit-for the first time in years."
By Owen Williams, Feb 06 2008 © Copyright 2008 - Showbiz Spy
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