New Orleans homeowner Lisa Tourtelot says homes were flying off the market in her neighborhood as recently as a month ago. Now, as she prepares to list her own house for sale, the homeowner is on edge.
Mortgage rates, property taxes, and homeowners insurance are all on the rise, she says—developments the 36-year-old fears are shutting out buyers. “My realtor told me that, as of last week, about 50% of interested buyers dropped out,” she says. On real estate sites like
Zillow
,
Tourtelot notes, homes in her area are spending more time on the market and sellers are dropping their asking prices.
Across the country, agents report working with people like Tourtelot who are increasingly unnerved by the prospect of selling a home. Mortgage rates have increased at a historic pace this year, making a home purchase even more expensive. Buyers are already pinched by high prices.
The increase in borrowing costs has reduced buyers’ purchasing power in a matter of months. The rate on a 30-year mortgage earlier this month increased to nearly 6% from about 3% at the end of last year. At 6%, a buyer on a $2,500 monthly budget could afford an approximately $400,000 home—down from $517,500 at the end of 2021, according to
Redfin
.
That has caused some buyers to call off their search. In recent weeks, the volume of applications for a loan to purchase a home, as measured by the rolling 4-week average, fell to its lowest levels since the pandemic’s early days, according to Mortgage Bankers Association data. And existing-home sales have fallen, too, declining in May to their lowest level since June 2020, according to the National Association of Realtors.
Buyers have more choices now, too. The number of active and new listings has increased on a year-over-year basis recently, according to Realtor.com’s gauge. (Barron’s and the company that operates Realtor.com are both owned by
News Corp
.
)
These shifts aren’t sitting well with sellers seeking top-dollar for their homes. And the cool-down has led some sellers to slash listing prices. While listing prices nationally are still well above year-ago levels, according to Realtor.com data, a record share of home listings saw a price cut last week, according to brokerage Redfin.
“There are a lot of sellers who are panicky,” says Deviree Vallejo, a Denver-based agent with LIV Sotheby’s Realty. “They feel like they missed the height of the market.”
In Denver, homes are still quickly going under contract, Vallejo says—but bidding wars are less competitive. “Oftentimes, you get one good offer, and you take it,” she says.
Dallas homeowners, meanwhile, are disappointed by the cooler market, says Todd Luong, an agent with Re/Max DFW Associates based in Frisco, Texas. “Before, you could probably have a plain-looking home and overprice it a little bit, and it would still sell very quickly,” Luong says. “That is not the case anymore.”
In Boise, one of the hottest housing markets last year, sellers are concerned they won’t get as much for their house as they originally planned, says Redfin agent Shauna Pendleton. Last week, listing prices for homes in Boise grew at their slowest year-over-year pace since 2020, according to Realtor.com. “Pretty much any agent you talk to in the Boise metro area doesn’t see a crash happening—but I do think that we are going to see a dip in prices,” says Pendleton.
Amy Vastardis, an agent with Coldwell Banker Realty, says homes in Orlando aren’t being bid up like they were. She is telling her clients to not expect “the crazy numbers that we’ve been seeing.”
In other places, a housing crisis is on people’s minds. Mark Kossel, 34, sees the market from two different perspectives. The owner of Detroit’s Midtown Home Mortgage, Kossel is also selling his two-bedroom condo in the city.
Kossel says he hears from clients concerned about a bubble burst. “They have that worry that there is going to be some kind of rug pulled out from under the housing market,” Kossel says, adding that he isn’t flustered by the current situation. “If there is any bubble that is going to burst, I really don’t see it being in the housing market,” he says.
Tourtelot, the New Orleans homeowner, said she remembers the 2008 housing crash, even though she wasn’t a homeowner then. “I don’t want to be that person stuck with a house that costs way more than it’s actually worth,” she says.
Tourtelot chose to list her home at a lower price in hope of a quick sale, opting for $235,000 instead of $250,000. “If I can sell it quickly and if we can break even, I’m going to consider it a win,” Tourtelot says.
Go ahead and list your home, John McCafferty, a director of financial planning at Edelman Financial Engines in Washington, D.C., says, noting that the decision to buy or sell a home should be based on personal circumstances, not macroeconomic factors. “There is always going to be buyers out there,” McCafferty says. “It’s just a matter of appropriately pricing and marketing your property to attract the right kind of buyer.”
That is the approach that Detroit-area homeowner Vicki Welsh is taking. The 60-year-old recent retiree is listing her four-bedroom home overlooking Lake St. Clair for $810,000 as she prepares to downsize and move to Florida.
Welsh says she is “not too happy” about rising mortgage rates, but it’s simply the right time for her to move. “I’m confident that I have a beautiful home, and it will just take the right buyer to realize that and appreciate it,” Welsh says.
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
On a recent afternoon,
Roopal Patel,
fashion director of Saks, walked into an apartment on Fifth Avenue in New York, greeting
Silvia Tcherassi,
a Colombian fashion designer, with a hug. A model walked around in a dress from Tcherassi’s new collection, as groups of women sat on the couches, sipping cappuccinos.
The scene occurred at a private membership club called Fasano Fifth Avenue, and it’s one of the latest to generate buzz in the city. With the rise of private events and smaller gatherings across the globe, it makes sense that members-only clubs are seeing a surge in popularity.
Now, a crop of new clubs, like this one, which opened earlier this year, are making their debut.
“The pandemic increased demand for private club memberships as individuals sought out the safety, privacy, and exclusivity,” says
Jeff Morgan,
president and CEO of the Club Management Association of America, adding that there has been “unprecedented new member interest” across the U.S.
A recent report from private club consulting firm GGA Partners said that 34% of members saw their clubs as more important since before the pandemic, mostly due to maintaining friendships. Roughly 73% of members use clubs to connect with friends.
“Private clubs offer a much more convenient and intimate option to meet friends, clients, or family,”
Zack Bates,
CEO of Private Club Marketing, a marketing consultancy firm that works with member-based clubs, said late last year. “These clubs can communicate directly with individual members on a much more personal level than, say, a public restaurant or bar.”
Fasano Fifth Avenue.
Courtesy of Fasano
Exclusive Allure
Fasano Fifth Avenue is set in a 143-year-old townhouse facing Central Park. It’s the U.S. debut of Brazilian hospitality brand Fasano, known in South America for its five-star properties. The New York outpost is a private club with duplex apartments that can be rented, suites that can be reserved, and a gym, sauna, and bar, which hosts special events for members. Membership is by invitation only from other members, which is then reviewed by the club’s Board of Approval. For a stay here as a member, rates start at roughly $6,000 per night for the duplex residences, which also go for $100,000 a month.
Meanwhile, on Park Avenue South, Chapel Bar is a members-only spot set in a stylish, renovated 19th-century church, right beside the photography museum Fotografiska. The location is open exclusively to patrons of the museum or members of NeueHouse, a co-working space.
Both are owned by CultureWorks; the company’s CEO,
Josh Wyatt,
calls Chapel Bar a “sanctuary for culture.” Annual membership to become a Patron member, which grants nightly access to Chapel Bar and a variety of experiences at Fotografiska, is $2,500.
Scheduled to open in May, the Aman Club is a new private club on the 14th and 15th floors of the new Aman New York, a five-star hotel on Fifth Avenue and 57th Street, where guests can use the Cigar Lounge, Wine Library, and the Aman Spa, with more dedicated spaces for members at the Swiss-owned hospitality brand’s other locations globally.
A Space for Work and Play
New trends for city-based private clubs are far different than their country
club counterparts. For one, many clubs are adapting to the work-from-club trend—whether its top of the line tech or secluded areas for Zoom calls and cozy environments for work meetings.
“There’s certainly been a global yearning, post-lockdown, to reconnect, to exchange ideas, to feel rooted in the culture of a city, and, most of all, to feel a sense of community again,” says
Jennie Enterprise,
the founder of Core:, a private club in New York.
The initiation fee ranges from $50,000 to $100,000 and the annual membership fees are $15,000 to $18,000, depending on the category (there is a waiting list, and there currently are 1,500 global members).
In London, a new members-only club and working space for wellness professionals called Until caters to self-employed health and well-being professionals, such as personal trainers, therapists, and acupuncturists. The co-founders,
Alex Pellew
and
Vishal Amin,
will soon open their 9,500-square-foot space in the city’s SoHo neighborhood.
The Aster in Los Angeles is a new club and hotel opening this June. Overlooking the Hollywood sign, there’s a pool, workspaces, pink-hued lounges, and ample palm trees. It also boasts a recording studio for musicians.
Nearby in West Hollywood, The Britely opened in spring 2021 inside the Pendry West Hollywood hotel, with two restaurants by Michelin-star chef
Wolfgang Puck.
It features a poolside bar and interiors designed by the Martin Brudnizki Design Studio.
A private event hosted at Core.
Courtesy of Core:
Style and Celebrity
Private club Zero Bond, set in the heart of NoHo in New York, is a go-to spot for the city’s new mayor,
Eric Adams,
and celebrities including
Pete Davidson,
Tom Brady,
and
Kim Kardashian,
according to the New York Post. Since opening in November, it has quickly become one of the most stylish places in the city, boasting conference rooms for meetings,
several restaurants, bars, and a private event space for members. The club currently has a waiting list for membership.
Casa Cipriani,
set in Manhattan’s Battery Maritime Building, a Beaux-Arts structure built in 1906, was co-created by Thierry Despont and the Italian Cipriani family, which owns 30 restaurants across the world. The property is home to 47 rooms and suites with views, a spa, and wellness and fitness center.
While clubs of yore were more for older people in high-ranking positions, they are increasingly popular with millennials and Generation X, who are more likely to work remotely, says Bates of Private Club Marketing.
“Some would say older millennials were finally shedding their hoodies and ripped jeans for members-only access,” Bates says. “In fact, I believe it’s the clubs who’ve adapted to allow a more casual dress code and stylish Instagrammable decor that really gave private clubs less of the stuffy feeling of their father’s time.”
This article appeared in the June 2022 issue of Penta magazine.
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My summer portfolio strategy is to play the old disco hit “Baby Come Back” while slow dancing with my December brokerage statements. If it works, I have a business idea involving Hall, Oates, and a two-and-20 fee structure.
At least there’s real estate. Home equity is said to be hitting record highs. Then again, taking comfort there would be like slipping on a financial toupee—everyone knows that underlying conditions have deteriorated.
The latest reading on nationwide pricing comes from back in March. Since then, 30-year mortgage rates have shot up to nearly 6%, and applications from buyers have slowed. This past week, a pair of online brokers with a good read on house searches,
Redfin
(ticker: RDFN) and
Compass
(COMP), announced layoffs.
Meanwhile, Redfin shares are down some 90% from their peak. Builders have gotten clobbered, too. Friends don’t let friends own leveraged exchange-traded funds with names like
Direxion Daily Homebuilders & Supplies Bull 3X Shares
(NAIL), especially when interest rates are rising, but if you’re curious, that one just lost 45% over five trading days.
Should investors buy shares of home builders here? Brokers? What’s next for house prices? And when will the stock market come back? Let me answer those in order of declining near-term confidence, starting at iffy.
Yes, buy builders. Prefer
Lennar
(LEN) and
Toll Brothers
(TOL), says Jade Rahmani, who covers the group for KBW. He points out that builder shares trade at 60% of projected book value, which is where they tend to bottom during recessions, ignoring the 2008 financial crisis. Lennar will benefit from the pending sale of a real estate technology unit, and Toll focuses on affluent buyers, around 30% of whom pay cash, and so aren’t put off by high mortgage rates.
Price/earnings ratios across the group are astonishingly low, but ignore them. They stem from two conditions that won’t repeat soon: land values jumping 30% or more from the time companies bought acres to when they sold houses, and a sharply higher pace of transactions during the pandemic. A builder that trades at four times earnings might really go for eight times assuming normalized conditions—still cheap, but a big difference.
House prices jumped more than 20% in March from a year earlier, but Rahmani expects that rate to plunge to 2% by the end of the year. His baseline view is that next year brings flat prices. His recession scenario, based on a study of past sales volumes, has prices falling 5% next year—perhaps more if mortgage rates rise to 7%. That might not sound like much, but for recent buyers with typical mortgages, a 5% price drop can reduce equity by 25%.
Most homeowners don’t have mortgage rates anywhere near recent ones; some two-thirds are locked in below 4%. These buyers are unlikely to move and take new loans if they don’t have to, which is one reason that supply could stay low for years. Another is that mortgages are much higher quality than they were during the last housing bubble, so there’s unlikely to be a wave of defaults and panic selling.
But something has to give on affordability. Typical payments on new mortgages have topped 23% of disposable income, close to their 26% high during the last bubble. But incomes are growing by 6% a year, so a long pause for house prices could help restore affordability. Anyhow, the pandemic has left people spending more time in their homes, so they should be willing to pay somewhat more on housing as a percentage of their income, reckons Rahmani.
Don’t rush to buy shares of the brokers, says William Blair analyst Stephen Sheldon. He has Market Perform ratings on three of them: Redfin,
RE/MAX Holdings
(RMAX), and
eXp World Holdings
(EXPI). In a blog post this past week, Redfin CEO Glenn Kelman wrote that May demand was 17% below expectations, and that the company will lay off 8% of employees. Redfin hires agents directly, whereas many brokers use independent contractors.
Kelman wrote that the sales slump could last years rather than months. More agents could leave on their own. National Association of Realtors membership, a proxy for the number of people selling houses, hit 1.6 million last year, up from about a million in 2012.
Sheldon at William Blair says he’s struck by how far broker valuations have come down, but sentiment is sour, and he’s waiting for signs of stabilization. Redfin goes for less than a tenth of its peak stock market value early last year, even though revenue has roughly doubled. That puts shares at around one-third of revenue. Free cash flow was expected to turn consistently positive starting in 2024. Now, we’ll see.
As for the stock market, I have good news and bad news, neither of which is reliable. The S&P 500 this past week dipped below 15 times projected earnings for next year, which suggests pricing has returned to historical averages. But there’s nothing to say that the market won’t overshoot its average valuation on its way to becoming cheap. And
Goldman Sachs
says forecasts for 10% earnings growth this year and next look too high.
Expect slower growth, says Goldman, and if there’s a recession, earnings could fall next year to below last year’s level. The bank’s estimates under that scenario leave the S&P 500 today trading at more than 18 times next year’s earnings. Goldman predicts that the index will rise 17% from Thursday’s level by year’s end without a recession, or fall 14% with one. Please accept my congratulations or condolences.
Not to worry, says Credit Suisse. Statistically, individual forecasts for company earnings are tightly clustered. That’s the opposite of what tends to happen before earnings tank.
I’ve heard people refer to the stock market as a “total cluster” before, but I had no idea they were talking about estimate dispersion.
Write to Jack Hough at jack.hough@barrons.com. Follow him on Twitter and subscribe to his Barron’s Streetwise podcast.
My summer portfolio strategy is to play the old disco hit “Baby Come Back” while slow dancing with my December brokerage statements. If it works, I have a business idea involving Hall, Oates, and a two-and-20 fee structure.
At least there’s real estate. Home equity is said to be hitting record highs. Then again, taking comfort there would be like slipping on a financial toupee—everyone knows that underlying conditions have deteriorated.
The latest reading on nationwide pricing comes from back in March. Since then, 30-year mortgage rates have shot up to nearly 6%, and applications from buyers have slowed. This past week, a pair of online brokers with a good read on house searches,
Redfin
(ticker: RDFN) and
Compass
(COMP), announced layoffs.
Meanwhile, Redfin shares are down some 90% from their peak. Builders have gotten clobbered, too. Friends don’t let friends own leveraged exchange-traded funds with names like
Direxion Daily Homebuilders & Supplies Bull 3X Shares
(NAIL), especially when interest rates are rising, but if you’re curious, that one just lost 45% over five trading days.
Should investors buy shares of home builders here? Brokers? What’s next for house prices? And when will the stock market come back? Let me answer those in order of declining near-term confidence, starting at iffy.
Yes, buy builders. Prefer
Lennar
(LEN) and
Toll Brothers
(TOL), says Jade Rahmani, who covers the group for KBW. He points out that builder shares trade at 60% of projected book value, which is where they tend to bottom during recessions, ignoring the 2008 financial crisis. Lennar will benefit from the pending sale of a real estate technology unit, and Toll focuses on affluent buyers, around 30% of whom pay cash, and so aren’t put off by high mortgage rates.
Price/earnings ratios across the group are astonishingly low, but ignore them. They stem from two conditions that won’t repeat soon: land values jumping 30% or more from the time companies bought acres to when they sold houses, and a sharply higher pace of transactions during the pandemic. A builder that trades at four times earnings might really go for eight times assuming normalized conditions—still cheap, but a big difference.
House prices jumped more than 20% in March from a year earlier, but Rahmani expects that rate to plunge to 2% by the end of the year. His baseline view is that next year brings flat prices. His recession scenario, based on a study of past sales volumes, has prices falling 5% next year—perhaps more if mortgage rates rise to 7%. That might not sound like much, but for recent buyers with typical mortgages, a 5% price drop can reduce equity by 25%.
Most homeowners don’t have mortgage rates anywhere near recent ones; some two-thirds are locked in below 4%. These buyers are unlikely to move and take new loans if they don’t have to, which is one reason that supply could stay low for years. Another is that mortgages are much higher quality than they were during the last housing bubble, so there’s unlikely to be a wave of defaults and panic selling.
But something has to give on affordability. Typical payments on new mortgages have topped 23% of disposable income, close to their 26% high during the last bubble. But incomes are growing by 6% a year, so a long pause for house prices could help restore affordability. Anyhow, the pandemic has left people spending more time in their homes, so they should be willing to pay somewhat more on housing as a percentage of their income, reckons Rahmani.
Don’t rush to buy shares of the brokers, says William Blair analyst Stephen Sheldon. He has Market Perform ratings on three of them: Redfin,
RE/MAX Holdings
(RMAX), and
eXp World Holdings
(EXPI). In a blog post this past week, Redfin CEO Glenn Kelman wrote that May demand was 17% below expectations, and that the company will lay off 8% of employees. Redfin hires agents directly, whereas many brokers use independent contractors.
Kelman wrote that the sales slump could last years rather than months. More agents could leave on their own. National Association of Realtors membership, a proxy for the number of people selling houses, hit 1.6 million last year, up from about a million in 2012.
Sheldon at William Blair says he’s struck by how far broker valuations have come down, but sentiment is sour, and he’s waiting for signs of stabilization. Redfin goes for less than a tenth of its peak stock market value early last year, even though revenue has roughly doubled. That puts shares at around one-third of revenue. Free cash flow was expected to turn consistently positive starting in 2024. Now, we’ll see.
As for the stock market, I have good news and bad news, neither of which is reliable. The S&P 500 this past week dipped below 15 times projected earnings for next year, which suggests pricing has returned to historical averages. But there’s nothing to say that the market won’t overshoot its average valuation on its way to becoming cheap. And
Goldman Sachs
says forecasts for 10% earnings growth this year and next look too high.
Expect slower growth, says Goldman, and if there’s a recession, earnings could fall next year to below last year’s level. The bank’s estimates under that scenario leave the S&P 500 today trading at more than 18 times next year’s earnings. Goldman predicts that the index will rise 17% from Thursday’s level by year’s end without a recession, or fall 14% with one. Please accept my congratulations or condolences.
Not to worry, says Credit Suisse. Statistically, individual forecasts for company earnings are tightly clustered. That’s the opposite of what tends to happen before earnings tank.
I’ve heard people refer to the stock market as a “total cluster” before, but I had no idea they were talking about estimate dispersion.
Write to Jack Hough at jack.hough@barrons.com. Follow him on Twitter and subscribe to his Barron’s Streetwise podcast.
if sandy shores are in your future on a tight budget, here are some spots you might want to think about.
Getty Images/iStockphoto
With summer in full swing, and many of us hitting the beach, we’re highlighting some beach towns where you can buy a house for less than $300,000. That said, it’s important to note the risk of hurricanes and flooding — and the associated insurance costs — when buying beach real estate. (You can see the lowest mortgage rates you may qualify for here.) But if sandy shores are in your future on a tight budget, here are some spots you might want to think about.
If you want a quaint town on the beach: St. Augustine, Florida
Getty Images/iStockphoto
Founded in 1565 by Spanish colonists, St. Augustine is known for its architecture, including buildings spanning from the 18th century to the present. Attractions include the Fountain of Youth Archaeological Park, which is located on the reputed site where the Spanish explorer Ponce de León landed in 1513, as well as the Accord Civil Rights Museum, which commemorates 1964 protests in St. Augustine that were led by Martin Luther King Jr.
Great for both kids and adults, the city boasts white sand beaches and a fishing pier along with a rich history. Named the number one food town in the South by Southern Living magazine in 2019, exemplary restaurants include The Floridian, which serves southern comfort food, and the Ice Plant, which serves farm-to-table fare along with specialty cocktails. Although the typical value of a home in St. Augustine is currently about $450,000, there are still plenty of nice properties to buy for less than $300,000, including this recently renovated two-bedroom home in the historic downtown; this newly constructed three-bedroom in a planned community near the outlet malls; and this three bedroom home just a ten minute drive away from the beach.
Median home value: $454,109
Population: 15,065
Cost of Living: 1.9% higher than the U.S. average
Sources: Zillow; Sperling’s Best Places
If you want that Texas vibe: Port Isabel, Texas
Getty Images/iStockphoto
Just north of the border between the United States and Mexico, Port Isabel is located at the end of the causeway that leads to South Padre Island, the only tropical island in the state of Texas. The town has plenty of access to white sand beaches on the Gulf, as well as the lagoons, wildlife refuges and canals that make up the geography of the area. For less than $300,000, you can buy a home on one of the town’s many deep-water canals, including this one-bedroom with a spacious covered patio, and this recently updated one-bedroom. Along with a plethora of golf courses, beaches, boating activities and waterfront restaurants, the town also offers a historic lighthouse, as well as a flea market and a history museum. Enjoy local seafood at Los Tortugo’s Seafood Market and Joe’s Oyster Bar but beware that the area is prone to hurricanes.
Median home value: $238,724
Population: 5,094
Cost of Living: 24.5% lower than the national average
If you want to fish and golf: Sneads Ferry, North Carolina
Getty Images/iStockphoto
Once a fishing village, Sneads Ferry area has grown in recent years due to the expansion of the nearby Marine Forces Special Operations Command. Located at the mouth of North Carolina’s New River, just before it runs into the Atlantic Ocean, Sneads Ferry is a ten minute drive from Topsail Island, a barrier island with 26 miles of beaches. Along with taking your boat out, spend your days visiting nearby attractions including the Turtle Factory, which offers painting classes as well as turtle-themed gifts, as well as the North Shore Golf Course, which is located on the Intracoastal Waterway. Notable restaurants include the Riverview Cafe, a seafood restaurant with water views, and Salty Sistas, which serves traditional North Carolina seafood. But like many beach towns, Sneads Ferry’s is in a high risk hurricane zone. For less than $300,000, you can buy a well maintained three-bedroom home like this.
Median home value: $326,898
Population: 2,326
Cost of Living: 11.3% lower than the U.S. average
If you want to be Hamptons-adjacent: Mastic Beach, New York
Getty Images/iStockphoto
Located on the south shore of Long Island, roughly a two hour drive from Manhattan, and 30 minute drive to Southampton, Mastic Beach boasts the Wertheim National Wildlife Refuge, a 2,500-acre complex full of wildlife habitats, as well as the William Floyd Estate, which was inhabited over 250 years ago by the first delegate from New York to sign the Declaration of Independence. One of the gateways to Fire Island, a collection of barrier islands that separate Long Island from the Atlantic Ocean, Mastic Beach has its own beaches on the bay, as well as a yacht club that was founded in 1930. The town offers many casual dining spots, including Nino’s Pizzeria & Cucina and Empanada Ville. The town is prone to flooding, which keeps housing prices low. For less than $300,000, you can buy a two-bedroom home on a creek with access to the bay.
Median home value: $366,794
Population: 15,610
Cost of Living: 5.9% higher than the U.S. average
Billionaire internet entrepreneur Jim Clark is selling an oceanfront estate near Palm Beach, Fla., for around $175 million, he said.
The deal is expected to set a record for Florida, which has yet to see a home sell for more than $130 million, according to real-estate appraisal firm Miller Samuel.
The off-market deal is expected to close this week, said Mr. Clark, who bought the estate and a nearby vacant island for just over $94 million in March 2021, records show. He declined to identify the buyer.
The roughly 16-acre property is located on a barrier island in Manalapan.
Photo:
Eagleview
The roughly 16-acre property is located on a barrier island in Manalapan, just south of Palm Beach. It was previously owned by the Ziff publishing family.
Mr. Clark said he and his wife, Kristy, bought the property as a “spur of the moment purchase” when they thought they were going to live in Florida most of the time. They fell in love with the aesthetics of the home and features such as a botanical garden, he said. But as the year went on, they decided to stay in New York—they have homes in Bedford and Manhattan—and enroll their two young daughters in school there, he said. Mr. Clark also sensed headwinds in the world economy and thought it made sense to sell, he said.
“In the end, we sort of thought, ‘How much will we come down here?’” he recalled. “I knew there was someone who wanted it and I beat them to it, so I thought, ‘Let’s see if they want it again.’” He said
Lawrence Moens
of Lawrence A. Moens Associates brokered the deal.
Mr. Clark said he updated some mechanical systems, but made no major changes to the estate. “Look, it’s a phenomenal piece of property,” he said. “You can’t find anything like that in Florida.”
Jim Clark in 2017.
Photo:
Sean Zanni/Patrick McMullan Agency/Getty Images
The property spans the width of the barrier island, with about 1,200 feet of ocean frontage and around 1,300 feet on the Intracoastal Waterway. The compound has several structures, including a roughly 62,200-square-foot, main residence clad in coral stone. It also has a seven-bedroom guesthouse, two cottages on the beach and a manager’s house. The structures are connected via tunnels that run underneath a road that bisects the property. The estate also has a pool, a dock, a sports complex and a three-hole golf course.
Mr. Clark co-founded Netscape and several other startups, most recently the digital security company Beyond Identity. He has bought and sold several other luxury homes in Florida, and said he tends to over-invest in his homes. “I’ve never made money on real estate until now,” he said.
So far, Palm Beach seems largely immune to a recent slowdown in luxury sales. Earlier this month, an oceanfront mansion in Palm Beach closed for around $85.9 million, less than a year after selling for $64 million, records show. In May, the number of contracts signed on single-family Palm Beach homes priced above $10 million more than doubled compared with May 2021, according to Miller Samuel.
Write to E.B. Solomont at eb.solomont@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
That’s a wrap. Director James Burrows, a co-creator of the TV show “Cheers,” is putting his Los Angeles estate on the market for $38 million.
The roughly 4.3-acre property is located in a Bel-Air gated community, according to listing agents Linda May and Guy Levy of Hilton & Hyland. Mr. Burrows and his wife, Debbie Burrows, purchased the property for about $11.94 million in 2004, records show.
A bathroom with a fireplace in the primary suite.
Jim Bartsch
There are six bedrooms in the main residence, plus a separate guesthouse.
Jim Bartsch
The main house is around 12,600 square feet.
Jim Bartsch
The kitchen of the main house.
Jim Bartsch
The two-story entry foyer has limestone floors and a stacked staircase.
Jim Bartsch
Built around 1990, the house is set back from the road, with a roughly ¼-mile private driveway and motor court. The estate also contains a separate guesthouse, pool and tennis court.
Mr. Levy said the couple took the roughly 12,600-square-foot home “down to the studs” after purchasing it nearly two decades ago. Working with architect Oscar Shamamian of Ferguson & Shamamian Architects, they essentially rebuilt the property. Michael Smith, who worked on the Obama White House, designed the interiors, which include a two-story foyer with limestone floors and a wine cellar that holds about 3,000 bottles. There are six bedrooms in the main house, including staff quarters. The primary suite has a wood-burning fireplace, a wraparound terrace, two bathrooms—one with a fireplace—and two closets, each with its own balcony.
James Burrows at his Bel-Air home.
Photo:
Ryan Lowry for WSJ. Magazine
Mr. Levy said the property sits on top of a ridge line with city, ocean and canyon views. The pool area has a pavilion with a fireplace and built-in bar and grill.
The couple has decided to sell so that they can travel more, Mr. Levy said. They own two homes in Wellington, Fla., which they purchased for $2.52 million in 2015 and $999,000 in 2018, according to public records. Last year they paid $15 million for a mansion in Laguna Beach, Calif., and they also bought a home in La Quinta, Calif., for $3.25 million in 2020.
In addition to “Cheers,” Mr. Burrows directed sitcoms such as “Friends,” “Will & Grace” and “Frasier.” He has won multiple Emmy Awards and recently published a memoir, “Directed by James Burrows,” chronicling his career in TV.
Write to E.B. Solomont at eb.solomont@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
There’s been a property in our family going back decades. It was actually split into four equal parts among the original owners, who have now all passed away. So the kids of the owners have the rights to the property. They each have 25%.
My grandma and her son (my uncle) were living there rent-free for decades until my grandma passed away a couple years ago, and now the other family members want their part of whatever the value of the home is.
My side of the family has six siblings. They had a meeting as to what to do with the property. Two options: 1. Sell the property and split the proceeds. 2. They pool their money together and buy the property from the rest of the family.
The only problem: Not one sibling wants to pony up the money to purchase the property. One of these siblings — my uncle — still lives at the property, lives off Social Security (about $800 a month), and really has no desire to have any type of job for an income.
“‘If they sold the property, my uncle would have nowhere to live without money to support himself. And he would be extremely unhappy with some type of small apartment.’”
If they sold the property, my uncle would have nowhere to live without money to support himself. And he would be extremely unhappy with some type of small apartment. In essence, my dad was the only one with financial means to purchase the property to keep it in the family.
My dad has put more than $100,000 into it so far. Once he purchases the property, he will own it outright. So he’s going through all this trouble of contacting long-lost family members to get their signatures for his purchase of the property in exchange for the money due to them from the property.
Here’s the biggest problem: My dad’s other brother sometimes sleeps at the property, but he mostly uses it to store items from his junk-removal business. So the property is pretty trashed. Apparently he doesn’t make much profit from the junk-removal business, so it would be difficult for him to pay my dad any kind of rent.
He’s borrowed lots of money from my dad and other family members throughout the years. My dad’s patience with him is wearing thin, and he wants his brother to get a real job, as opposed to trying to run a business while trashing the property.
My dad just wants the property clean, so he can eventually take out a loan to build a house on the land so he can resell it.
Frustrated Family Member
Dear Frustrated,
First of all, never put $100,000 of your own money into a house that (a) you don’t live in, (b) other people use for accommodation and/or storage and (c) is owned by several people, many of whom don’t have the money to buy you out. I understand that spending money on this home will help it maintain and improve its value, but that increased value will likely be split equally among the owners if and when it’s sold. Your father will have an uphill struggle to get that money back.
The problem is: Your uncle who lives there has all the reason in the world to welcome renovations and make his/their home more comfortable, but there is not much reward in giving up that home and renting a smaller apartment. He loses the security of being able to live there rent-free and being the proverbial cog in the wheel, preventing the property from being sold with the proceeds being split among his siblings. It’s a tough spot.
“Your father’s dilemma is the result of bad estate. Leaving a house to multiple siblings will stoke long-held resentments, and cast an unflattering light on the gap in their financial lives.”
If he does wish to sell the home rather than allow this to linger for years, he should do his best to contact the other owners to convey their wishes to sell or not. Given what you said about the other siblings using the property for various purposes, he is unlikely to reach a consensus. As such, he can take a partition action to force his siblings to sell their share. The court will decide if there is a strong reason to sell. This could be an expensive and bitter legal challenge.
As the Law Offices of Weiss & Weiss state in this blog post on the subject of partition: “When two or more owners cannot agree on the disposition of the property in question, any of the owners can file a partition action in the appropriate court.” And what if there is someone living in the property? “A person remaining in possession does not have the right to block the potential sale of the property simply by virtue of living at the property,” the firm says.
There may be an inquest: “Each co-owner is given the opportunity to provide evidence of their contributions to the upkeep of the property, such as payment of real estate taxes, insurance, and property repairs, and any income they may have earned from renting the property,” the firm adds. “A court-appointed referee then issues a report to the court that details what each owner should receive from the property sale, incorporating the evidence from the inquest.”
Your father’s dilemma is the result of bad estate planning by your grandparents. Leaving a house to multiple siblings will surely stoke long-held resentments, and only cast an unflattering light on the gap in each sibling’s financial lives, exacerbating any pre-existing tensions. This is where co-owners could take nefarious actions, like turning off the water and electricity, in a dastardly effort to smoke out the other co-owners.
Selling the house then or now would prevent that.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Also read:
My family owns a house that’s split among my father and his three siblings. He spent $100,000 on renovations and wants to buy his siblings out. What can he do?
There’s been a property in our family going back decades. It was actually split into four equal parts among the original owners, who have now all passed away. So the kids of the owners have the rights to the property. They each have 25%.
My grandma and her son (my uncle) were living there rent-free for decades until my grandma passed away a couple years ago, and now the other family members want their part of whatever the value of the home is.
My side of the family has six siblings. They had a meeting as to what to do with the property. Two options: 1. Sell the property and split the proceeds. 2. They pool their money together and buy the property from the rest of the family.
The only problem: Not one sibling wanted to pony up the money to purchase the property. One of these siblings — my uncle — still lives at the property, lives off Social Security (about $800 a month), and really has no desire to have any type of job for an income.
“‘If they sold the property, my uncle would have nowhere to live without money to support himself. And he would be extremely unhappy with some type of small apartment.’”
If they sold the property, my uncle would have nowhere to live without money to support himself. And he would be extremely unhappy with some type of small apartment. In essence, my dad was the only one with financial means to purchase the property to keep it in the family.
My dad has put more than $100,000 into it so far. Once he purchases the property, he will own it outright. So he’s going through all this trouble of contacting long-lost family members to get their signatures for his purchase of the property in exchange for the money due to them from the property.
Here’s the biggest problem: My dad’s other brother sometimes sleeps at the property, but he mostly uses it to store items from his junk-removal business. So the property is pretty trashed. Apparently he doesn’t make much profit from the junk-removal business, so it would be difficult for him to pay my dad any kind of rent.
He’s borrowed lots of money from my dad and other family members throughout the years. My dad’s patience with him is wearing thin, and he wants his brother to get a real job, as opposed to trying to run a business while trashing the property.
My dad just wants the property clean, so he can eventually take out a loan to build a house on the land so he can resell it.
Frustrated Family Member
Dear Frustrated,
First of all, never put $100,000 of your own money into a house that (a) you don’t live in, (b) other people use for accommodation and/or storage and (c) is owned by several people, many of whom don’t have the money to buy you out. I understand that spending money on this home will help it maintain and improve its value, but that increased value will likely be split equally among the owners if and when it’s sold. Your father will have an uphill struggle to get that money back.
The problem is: Your uncle who lives there has all the reason in the world to welcome renovations and make his/their home more comfortable, but there is not much reward in giving up that home and renting a smaller apartment. He loses the security of being able to live there rent-free and being the proverbial cog in the wheel, preventing the property from being sold with the proceeds being split among his siblings. It’s a tough spot.
“Your father’s dilemma is the result of bad estate. Leaving a house to multiple siblings will stoke long-held resentments, and cast an unflattering light on the gap in their financial lives.”
If he does wish to sell the home rather than allow this to linger for years, he should do his best to contact the other owners to convey their wishes to sell or not. Given what you said about the other siblings using the property for various purposes, he is unlikely to reach a consensus. As such, he can take a partition action to force his siblings to sell their share. The court will decide if there is a strong reason to sell. This could be an expensive and bitter legal challenge.
As the Law Offices of Weiss & Weiss state in this blog post on the subject of partition: “When two or more owners cannot agree on the disposition of the property in question, any of the owners can file a partition action in the appropriate court.” And what if there is someone living in the property? “A person remaining in possession does not have the right to block the potential sale of the property simply by virtue of living at the property,” the firm says.
There may be an inquest: “Each co-owner is given the opportunity to provide evidence of their contributions to the upkeep of the property, such as payment of real estate taxes, insurance, and property repairs, and any income they may have earned from renting the property,” the firm adds. “A court-appointed referee then issues a report to the court that details what each owner should receive from the property sale, incorporating the evidence from the inquest.”
Your father’s dilemma is the result of bad estate planning by your grandparents. Leaving a house to multiple siblings will surely stoke long-held resentments, and only cast an unflattering light on the gap in each sibling’s financial lives, exacerbating any pre-existing tensions. This is where co-owners could take nefarious actions, like turning off the water and electricity, in a dastardly effort to smoke out the other co-owners.
Selling the house then or now would prevent that.
Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.
The Moneyist regrets he cannot reply to questions individually.
By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Also read:
‘I respect every profession equally, but I feel like so many people look down on me for being a waitress’: Americans are tipping less. Should we step up to the plate?
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