We all know what the death of a famous singer can do for music and memorabilia sales. Just look at Michael Jackson, or much more recently, Whitney Houston. In the days after Houston passed, fans bought nearly 900,000 digital tracks of her songs. Compare that with the week before, when just 15,000 were sold. But does a high-profile celebrity death cause a similar sales boost to real estate tied to the rich and famous?
For the most part, real estate agents say it doesn’t. In fact, when a home is associated with celebrities who are more infamous than famous, it can be harder to sell the property at a premium, or even at fair market value.
The 12,561-sq.-ft. mansion in Mendham Township, N.J., where Houston wed Bobby Brown, and where much of the reality show featuring the couple was filmed, has been on and off the market since 2009. As of this week, it is said to be privately “active,” though only buyers who have been prequalified with liquid assets of $1.5 million or more will be shown the property, according to Yahoo! Real Estate. The current listing price is $1.75 million.
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Mere voyeurs can check out the home at CarProperty.com, a site that specializes in listing homes with large garage spaces. The Houston property has a four-car garage, among other amenities, but the site instead focuses mostly on the home’s celebrity cachet as a prime selling point. The property was “the scene of the activity that brought down this incredible musical diva over a 15-year cycle,” the listing states. “If you owned this house, you would always have these incredible stories to go with it.”
But do “incredible” celebrity anecdotes increase interest among buyers, or add value to a home?
According to Amy Bohutinsky, chief marketing officer of Zillow.com, the answer is no. “As sellers, celebrities are no better than the rest of us,” she told CNBC. Fans may be inclined to buy songs or splurge for autographed memorabilia in the wake of a beloved singer’s death. But the kinds of people with the resources to buy multimillion-dollar mansions are rarely swayed into overpaying for real estate strictly because some rich and famous person lived there.
In some cases, a celebrity association can actually hurt the value of the home. At one point, Jackson’s Neverland estate was appraised at $50 million. Right before his death, he sold it for $22.5 million to investors who were involved with his comeback tour.
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“In the minds of many real estate developers and buyers, Neverland is tainted with similar stigma issues that are also associated with the O.J. Simpson, JonBenét Ramsey and Heaven’s Gate properties,” said Randall Bell, who specializes in appraising stigmatized properties. “Right or wrong, Jackson’s properties are negatively perceived by some with regards to crimes against children.”
In most cases, celebrity-home values seem to have fallen just as much as the average homeowner, if not more. Britney Spears originally listed her Calabasas, Calif., home in 2009 for $9.9 million. It’s still on the market, only now the asking price is $5.9 million. Zillow.com even estimates that the value of the White House dropped $100 million during the housing slump.
Serious buyers are more likely interested in upgraded bathrooms, not the ability to point out to dinner party guests the spot where Bobby and Whitney tied the knot. Simply put, the fact that a celebrity once lived there doesn’t drive the price of a home.
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That’s unfortunate for the late singer’s estate. At the time of her death, Houston was reportedly heavily in debt and borrowing money from her mentor, Clive Davis. It seems unlikely that her home will sell for more than fair market value. At least sales of Houston’s songs are booming.
