The United States foreclosure market is currently teeming with high-end foreclosed homes. I would not be surprised to find some celebrity homes on that list. According to official data, 335 percent more properties priced at $1 million and above were foreclosed in 2010 as compared to 2007. Daren Blomquist of foreclosure watching company RealtyTrac revealed that more foreclosures are taking place in the high-end market. The tough economy, coupled for some with job loss and other troubles, is pushing many homes into foreclosure. Back in 2007, million-dollar foreclosed homes for sale accounted for only 1.2 percent of the foreclosure market. In 2010, that number had risen to 2.3 percent.
A tough economy and job loss has made it difficult for formerly wealthy people to stick to their mortgage payments. Even with high incomes, it can become difficult to make regular payments on mortgages for high-end homes.
However, there is another reason for the rise in the number of foreclosed homes for sale. In recent times, many rich homeowners have begun to cease paying their mortgages simply because the property value of their home has dropped below the unpaid balance on the mortgage. In such cases of negative equity, it makes financial sense to walk away from a home. This trend is more visible in the high-end home market than in the low-end one.
There is an advantage to all this, however. The large number of million-dollar foreclosed homes indicates that interested buyers can now purchase high-end homes at low rates. According to RealtyTrac, the first quarter of 2011 saw foreclosed homes selling for 27 percent less than other properties. And here is a look at five of the most expensive foreclosed homes that are currently up for sale.
1. The Villa Mar Vista Estate, Laguna Beach, Calif.
List price: $20 million
Square footage: 11,333
Lot size: 11.8 acres
Built in: 2010
Listing broker: Richard Leavitt, Engel and Volkers
This Laguna Beach home is just an hour’s drive from the bustle of Los Angeles. The four-bedroom, seven-bathroom home has a home theater, an infinity-edge pool, a spa and tasteful interiors. But it also offers jaw-dropping high-end features like a private heliport and a garage that accommodates 20 cars. The luxury home has sprawling gardens, as well as terraces that offer fantastic views of the Pacific Ocean. The Aliso Creek Golf Course also stands nearby.
2. The Razor, La Jolla, Calif.
List price: $19.4 million
Square footage: 11,000
Lot size: 0.77 acres
Built in: 2007
Listing broker: Bob Hurwitz, Hurwitz James Co.
The Razor will be up for auction on 28 September with a base bidding price of $16 million. Interested buyers should purchase the property earlier to avoid entering a bidding war. Located 15 miles from San Diego, this contemporary-style luxury property offers beautiful views of the Pacific Ocean. It features a heated pool, a dog run and a two-space carport. Moreover, Calvin Klein and Visa have used it as a backdrop for their advertisements. The Del Mar race track and the Torrey Pines Golf Course are nearby.
3. East Mockingbird Lane, Paradise Valley, Ariz.
List price: $18 million
Square footage: 17,015
Lot size: 4.9 acres
Built in: 2009
Listing broker: Joan Levinson, John Hall & Associates
This sprawling seven-bedroom luxury home has a number of unique touches. It houses two libraries, a wine cellar, a piano room and even a so-called “panic” room. Plus, there is a Dolby sound system equipped home theater done up in mahogany. An on-site solar power stations provides all the power needs of the home. There is also a 21-car, climate-controlled garage and a $1.2 million security system.
4. The Wyndham Estate, Newport, R.I.
List price: $7.9 million
Square footage: 12,500
Lot size: 7.7 acres
Built in: 1891
Listing broker: Paul Leys, Gustave White Sotheby’s International Realty
This 19th-century luxury mansion has all the modern amenities. The spacious seven-bedroom, eight-bathroom home also features a ballroom, a music room and four fireplaces. The rooftop deck showcases a whirlpool that overlooks the ocean. An artificial pond and waterfall adorn the grounds. Plus, there is garage space for nine cars. Moreover, this property is well-located. It stands close to the New York Yacht Club, the Newport Country Club and the Ocean Drive State Park.
5. Biltmore Estates Drive, Phoenix
List price: $7 million
Square footage: 17,799
Lot size: 1.04 acres
Built in: 2002
Listing broker: Sandra Baldwin, Russ Lyon Sotheby’s International
This 1-acre Phoenix home is a grand property with nine bedrooms, 11 baths, a library, a home theater and a wine cavern. People who love entertaining will adore the balconies and the al fresco patios as well as the outdoor terraces that can be used for dining and dancing. The Arizona Biltmore Golf Course is right next to this mansion.
In the meanwhile, RealtyTrac has also found that the overall number of foreclosures across 178 American cities dropped in the first six months of 2011 compared to the same period in 2010. The trend was seen in all the ten cities that topped the foreclosure list back in 2010. All ten of these cities were located in three states – California, Nevada and Arizona. Cities in New York, Maryland, Florida, New Jersey, Connecticut, Massachusetts and Illinois recorded the highest decline in the rates of foreclosures. All these states require a court procedure for foreclosures.
The large number of foreclosed homes for sale even has the Obama government looking at rental plans for foreclosed homes. Some quarters are hopeful that rental plans might provide a required nudge to property prices. The housing market is on the road to recovery, but the large number of properties for sale is an obstacle. This makes it difficult for people who want to sell a smaller home and buy a larger one, because there are not enough buyers for their property. The rental idea could hold some promises, but many realtors remain skeptical. They feel that this would be logistically difficult to implement. Plus, given that markets operate in various ways, administering the rental plan could prove a complicated process.
However, reaching a consensus on the rental idea will still take some time. In the meanwhile, realtors have to work on wooing buyers, especially luxury buyers, to purchase foreclosed homes.