In the 1997 film Con Air, Nicolas Cage fought for control of a hijacked plane. Ten years later, as Johnny Blaze in Ghost Rider, he risked his life as a daredevil motorcyclist on a mission to avenge his father's death. And in 2006's The Wicker Man, Cage's character faces down a hostile group of pagans.
But no amount of enterprise could save the actor's real estate investments from foreclosure this year. Cage lost two New Orleans properties at auction (a bank was the buyer). This month, his French Quarter mansion went for $2.3 million and his Garden District house went for $2.2 million. Each was appraised for $3.45 million, for a combined loss of $2.4 million, according to records from the Orleans Parish Assessor's Office.
In Depth: Celebrity Homes For Sale
Cage's predicament proves that even celebrities are struggling in today's real estate market. Foreclosure aside, a handful of actors and sports stars have lowered the asking prices of their multimillion-dollar listed homes in an effort to lure reluctant buyers. They include Ichiro Suzuki of the Seattle Mariners and Phat Farm's Russell Simmons.
Their actions mirror those of luxury homeowners nationwide. A recent report by real estate Web site Trulia.com showed that high-end homes continue to bear the brunt of discounts being offered. An average of 14% is being slashed from the original asking price of luxury homes, compared to the national average of 10%. Additionally, luxury homes, which represent less than 2% of all current listings on Trulia, are responsible for 25% of the $28.1 billion in current home-price reductions.
Star Struggles
Actor-comedian Eddie Murphy can likely relate. He slashed the price of his 32-room New Jersey mansion in September by a whopping 50%. Murphy had listed the property at $30 million in December 2004. He later switched real estate agencies and halved the price in September, according to a representative at Prominent Properties Sotheby's International Realty in Alpine, N.J.
"There just aren't as many buyers for these $25 million-plus homes, as there are for, let's say, a $500,000 home," says Heather Mirjahangir Fernandez, Trulia.com's vice president of marketing. These homes do sell, she says, after multiple price reductions.
Like Murphy, media and fashion mogul Russell Simmons--best known for helping to pioneer hip-hop label Def Jam, and creating clothing lines Phat Farm, Argyleculture and American Classics--is also having trouble in the New Jersey real estate market. He listed his 35,000-square-foot Saddle River property in 2008 at $23.8 million, and has since cut the price twice, according to Diane Taccetta, an agent at Prominent Properties Sotheby's International Realty, including the latest reduction in September, to $16.5 million.
Trouble Off the Field
Professional athletes are also taking a hit. Seattle Mariners outfielder Ichiro Suzuki reduced the price of his Issaquah, Wash., home in August by $225,000 to $1,525,000, according to real estate sites Postlets.com and Trulia.com. The property is listed with Rick Miner of Coldwell Banker Bain in Issaquah, but Miner would not confirm the date and amount of the price cut.
Former Boston Red Sox pitcher Curt Schilling, who last took the mound in 2007, is trying to sell his Medfield, Mass., 11,000-sqaure-foot home for $4.5 million. He originally listed the property in March for $5 million, and has since knocked the price down twice, with the latest reduction of $400,000 coming earlier this month, according to listing agent Jim Nemetz of Hammond Residential.
Regular folk have it tougher. If they are unable to sell and don't have a financial cushion on which to fall back, foreclosure may loom for those who can't make their mortgage payments. Of U.S. homes that were in some stage of foreclosure (including pre-foreclosure and liens, for example) last month, 22% are now bank-owned, meaning the owners were not able to save their homes, according to a measure of 203 metropolitan statistical areas by RealtyTrac, an online real estate marketplace.
But celebrities aren't completely insulated from the perils of the real estate boom and bust. Just ask Nicolas Cage.
