How celebrity impacts property value

By Luxury Portfolio International

Whenever a celebrity lists a home, it tends to garner immediate attention. These residences are often featured in major news outlets, positively influencing the property’s value and attracting a larger pool of buyers.

In Southern California, celebrity home sales are somewhat routine for the brokerage Hilton & Hyland, which frequently lists the estates of A-list celebrities.

“There’s definitely an increase in the value of [celebrity] homes, not only because of its intrinsic value, but you do get a much greater pool of buyers,” says Susan Smith, global real estate advisor at Hilton & Hyland, Beverly Hills.

“Often, more buyers are interested in viewing that type of home,” she adds.

 

By Design

But a notable name alone will not sell the property; certain factors compound and strengthen the relationship. Properties owned by living celebrities, particularly if the person is the current owner, tend to be the most valuable – and not just for the novelty. Why? Because homes with current celebrity owners tend to be the trendiest and offer modern luxuries.

“Celebrities tend to be attracted to special homes…those that are architectural, for instance,” Smith says. “They tend to attract other celebrities or people with money to buy them after they have lived in those homes.”

 

Of late, headline-earning properties have included those owned by Ellen DeGeneres, Derek Jeter, Katy Perry, Sylvester Stallone, and even Elvis Presley. What has made these homes even more valuable are the homes’ design elements and solid ties to the celebrity homeowners.

Ms. DeGeneres is the prime example of a celebrity who has invested in beautifully designed properties, listing multiple homes during the last year alone. The designers who have worked on her homes have boosted their selling prices.

“Ellen probably generates some of the best numbers,” Smith says. “One that just closed, sold for $49 million, a record for Beverly Hills. She also tends to be very on top of the latest in design – Tommy Clements of Clements Design did that home, and he is very hot right now.”

Sylvester Stallone is also aiming for a big sale of his home, owned since 1998, with the property listed at $110 million. The fact that Stallone has long owned the property, which he recently remodeled, along with the history and Rocky memorabilia within it, are all boosting the overall value.

Meanwhile, the late Presley’s Palm Springs home sold for more than $2.5 million just a few months ago. Although Elvis spent very little time at the property, and was obviously not the current owner, it is the home where he honeymooned with Priscilla Presley in the 1960s, and the interior very much matches the era.

 

Low Down

Celebrities, however, are not always so lucky. Occasionally, they take a loss on their homes. As Smith describes it, this is because celebrities have the capital to buy homes that are drumming up interest, and by the time they sell it, that interest may have waned.

“Justin Bieber had a home that sold for less than what he bought it for,” Smith recounted. “When he purchased it, the house had a lot of interest, so he paid a premium. Celebrities can be compulsive when they buy homes – they’ll go for this crazy price because they see a lot of people want the home.”

The other scenario where Smith has observed celebrity home values take a hit has been when a celebrity has passed away from sad or unfortunate circumstances. It’s somewhat macabre but the celebrity association brings with it curious buyers.

There are various factors that come into play with how celebrity affects a home sale, but their ties to history, impeccable design and general affiliation are the most significant. Ultimately, purchasers are buying into the celebrity lifestyle. And the more current the celebrity ownership is, like Stallone’s house, the better the listing will shine. “It’s been recently remodelled by him, so you’ll live like he’s been living in that home,” says Smith.

 

Harvey Kalles Real Estate is a proud affiliate of Luxury Portfolio International. For more information on LPI and our other affiliates, click here.