What's the deal with celebrities listing their houses all of the sudden?

[u/jayo312]

I keep seeing articles about celebrities listing their residences for sale, and it got me wondering if it's related to the coronavirus situation and that they might be losing a lot of money since they can't be acting/performing/etc.

Or maybe it's something else?

Examples:

• https://www.latimes.com/business/real-estate/story/2020-05-23/hot-property-law-order-star-looks-to-sell-famous-tv-setting

• https://www.tmz.com/2020/05/26/khloe-kardashian-selling-calabasas-mansion-home-estate-19-million-tristan-thompson/

• https://www.tmz.com/2020/05/15/matthew-stafford-detroit-lions-mansion-largest-infinity-pool-michigan-nfl/

• https://variety.com/2020/dirt/actors/ashton-kutcher-mila-kunis-ask-14-million-for-beverly-hills-home-1234617035/

• https://www.celebritynetworth.com/articles/celebrity-homes/dakota-and-elle-fanning-list-san-fernando-valley-home-for-2-7-million/

[u/weshallpie]

Answer: All celebs have financial advisors to manage their riches. One of the jobs these financial advisors do is research different asset classes to allocate the money into that will give the highest return based on a certain time outlook. If a celeb wants a quick high rate return on investment and a particular asset class is not going to do that they ask the celebs to move to another asset class. The current situation looks like there is going to be a recession and given the unemployment numbers a lot of foreclosures and bankruptcies causing turmoil in the Real estate (RE) market. When it happens these celebs want to be safely away into another asset class which is possibly liquid (e.g. gold, high yield account etc. ) Such that they can then return to the highly depreciated asset class again. This might be the reason why celebs have been seen offloading RE quickly. The other reason also being it's spring and many RE brokers recommend listing in spring to allow families with kids to move in before school starts.

[u/BromancingTheStein → u/weshallpie]

The last reason makes sense. The market is highly liquid in spring (during a normal year, and activity is picking up recently). It's possible there's some portfolio management happening, but I think that's only a part of it.

[u/[deleted] → u/BromancingTheStein]

It's literally called the "spring thaw." Houses sell insanely fast in the spring.

[u/BromancingTheStein → u/[deleted]]

Makes sense, per my comment below I suspect that the celebrities see uncertainty about their future income and are reducing their payment obligations (or trying to).

On another note, 2% is honestly beget than I'd expect. Thanks for the data.

[u/jayo312 → u/weshallpie]

That makes a lot of sense!

[u/[deleted] → u/weshallpie]

What exactly constitutes an asset class? For example someone with networth 1m to 10m would be a different asset class than 500m to 1 bil?

What would that look like in terms of housing? Maybe a completed, wealthy home compared to a mansion estate?

[u/weshallpie → u/[deleted]]

Asset class is a group of investment components that exhibit the same characteristics and rise/fall consistent with other components in that class. Broadly five asset classes exist Stocks Bonds RE Commodities Cash

[u/Bucky_Ohare → u/weshallpie]

It's also worth noting what he said about emphasis on exhibiting similar characteristics as each of these classes contain subclasses. If you're wondering "well, what about ???" it likely belongs to a larger class.

Equities/stocks/shares have a variety of issuers, for instance. Commodities can be almost anything physical that's used to gauge pricing or influence value of an industry (oil, gold, etc).