When we compiled our last list of the most expensive homes in America, the economic climate was decidedly grim; the Dow was trading just above 10,500; execs were passing out pink slips like candy, and the average home price on our list had fallen to $47.4 million from $51.9 million. Today people only wish it was as bad as back then. The Dow is treading well below 8,000, and tens of thousands more Americans have been laid off. Yet, believe it or not, the average home price on our list has risen--by a little more than a million dollars, to $48.4 million. What makes that figure even more surprising is that not one of the properties that were on our last list has sold. If the owners couldn't sell their homes then, do they honestly believe they can now--especially at the prices they're asking, which in most cases are vastly more than what they originally paid?
While 15-bedroom mansions, massive swimming pools and oceanfront views don't come cheap (see "Build Your Own Mansion In Five Minutes Or Less"), a lot more hubris than economics goes into pricing a house at this range. For the past two years, the house that topped our list, Triarc (nyse: TRY - news - people ) Chairman Nelson Peltz's Palm Beach estate, has listed for $75 million. Since the home didn't sell when the market was much stronger, it seems unrealistic that it would move now. Of course, unlike most Americans, Peltz, who is ranked No. 255 on the Forbes list of the 400 Richest Americans and has an estimated fortune of $915 million, can probably afford to wait. Not everyone can, though. Some of the owners of the homes on our current list may need the cash; their real estate is among their most valuable assets, and they'll even risk taking what in most cases will be whopping capital gains hits. One newcomer to our list is the $37 million Manhattan townhouse of Penthouse publisher Bob Guccione, whose company, General Media, has been flirting with bankruptcy. Another is the East Hampton estate of Chris Whittle--founder and chairman of struggling education company Edison Schools (nasdaq: EDSN - news - people )--which has recently been placed on the market for $45 million.
Will they be able to sell? For that matter, will any of the homes go for anywhere near their asking prices? Of all the homes that qualified for our last list, only one--in Hidden Valley--has actually been reduced in price. There is also a certain status in owning--and even more in buying--a home that is among the most expensive on the market. Some properties have dropped off the list for other reasons. The Hillsborough, Calif., mansion that was previously for sale at $45 million was inexplicably removed from the market. (Local realtors say the owner, Palestinian-American businessman Sam Bamieh, periodically lists the property almost as a cry for attention.)
Another home was delisted by natural forces. The Dallas, Tex., mansion listed last time at $44.9 million caught fire in July, and very little of the property was left intact. The home was under constant construction while George Perrin, founder of paging-services provider PageNet, owned it, and remained under construction after he sold it in 1997. In fact, the home has yet to be occupied, and it could be a long time before it's occupied again. The cause of the fire was not determined, and the fate of the home's remnants is still unclear.
But for every property that fell off the list, a new multimillion-dollar property lined up to take its place. Despite mounting economic fear and uncertainty, sellers seem optimistic. Peter Guber, the former co-chairman of Sony Pictures and producer of such films as Midnight Express, Flashdance and Batman, listed his Aspen ranch (and the neighboring ranch) for $63 million.
Guccione's place wasn't the only Manhattan home to make the list. We didn't include Johnson & Johnson (nyse: JNJ - news - people ) heiress Elizabeth "Libbet" Johnson's three floors of the Trump International Tower last time, since the property was still being divided into four separate apartments. Now the construction is done, and the full-floor penthouse just edged its way onto the current list at $35.3 million (that's 0.33 million more than a slew of runner-up homes, including Virginia Kraft Payson's Sands Point, N.Y., property).
With so many new high-ticket homes coming on the market, a couple of properties from the last list got bumped off. The Brentwood, Calif., ranch and the North Scottsdale, Ariz., estate--both listed for $35 million--were edged off this time around, but realtors assure us that both homes are still on the market, and there has been a steady stream of home buyers looking at the properties. Won't they be saying the same thing next year?
http://www.forbes.com/2002/10/10/1011home.html
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