Deals on mega mansions are everywhere, but to find the best bargains, house shoppers need to go to the housing markets that were hit hardest by the real estate bubble burst. Forbes.com reported there are two types of cities specializing in the highly, discount luxury properties; "bubble markets" including Los Angles, Las Vegas and many cities in Florida and weakened luxury markets such as Crested Butte, Colorado and pricey Alpine N.J.
Those with stars in their eyes can use the opportunity to buy their favorite celebrity homes at huge financial savings. Recently Sharon and Ozzy Osbourne tried to sell their luxurious beachfront property in Malibu for $14 million. A lack of interest caused the couple to discount their property my several millions of dollars to list at $10.65 million. There were no takers at that price point so the property can currently be rented for $44,000 a month.
Pop star Britney Spears is also trying to unload her mega-mansion. The property is located in Beverly Hills, California was originally listed at $7.2 million in and discounted to $4.86 million soon after.
The Causes of the Mega-Mansion Surplus
The American real estate market is flooded with plenty of discounted luxury properties. Although it may seem like an unusual trend, over development is one of the reasons the market is inundated with options. The upward swing of the real estate market is the biggest contributor of the trend. As rising home prices were becoming the norm, real estate developers focused their efforts to keep up with the demand for luxury. As the market declined, behaviors changed and mega-mansions and luxury condos are no longer considered chic.
The credit crunch is preventing interested buyers in procuring the mortgages they need to finance the purchase, keeping these properties on the market longer than usual. Even though the extremely wealthy may have the millions of dollars to buy the property outright, chances are they would prefer to secure a jumbo loans and the tax benefits associated with the interest rates. Financial institutions require everyone to fill out a mortgage application regardless of their status and lenders have tightened the rules regarding loan application approvals for everyone.
What Should I Know About Buying a Mega Mansion
Mega mansions can be filled with swimming pools, basketball courts, private movie rooms and every conceivable amenity and perk known to mankind and to have it all is very expensive. Not only will you need a down payment of hundreds of thousands (perhaps millions) of dollars, you must have the hefty income stream to pay your mortgage on time and handle the property taxes.
Remember, at one point MC Hammer had nearly $33 million to his name and purchased his mega mansion guilt free. After a couple of seriously bad financial moves, he was flat broke, filed for bankruptcy and forced out of his mega mansion.
