‘Record low interest rates’ and more unique changes are happening within the luxury house market. Four real estate experts explain why Kylie Jenner and Travis Scott bought multi-million pads at the perfect time!
A global pandemic may not seem like the ideal time to purchase a multi-million dollar home. However, this is exactly what Kylie Jenner, 22, and Travis Scott, 28, did, with one purchasing a $36.5 million Holmby Hills estate and the other scoring a $23.5 million Brentwood hilltop home in cash this summer (both are located in ritzy areas of West Los Angeles). And, surprisingly, this is actually an ideal time for buyers to go luxury house hunting. HollywoodLife EXCLUSIVELY spoke with four experts in the high-end house market — Katie Reid, Jason Arena, Shaynah Jones and Yawar Charlie — who explained why this is!
Footage of Travis Scott’s new pad in Brentwood, which offers a generous amount of space: seven bedrooms, 11 bathrooms, three floors, and a 20-car auto gallery for the rapper’s collection of luxury wheels.
Katie Reid: Queer Real Estate Agent With Reid’s Real Estate Group
HollywoodLife: Is a good time to buy expensive properties?
Katie: Yes, it is! With inventory being so low in the market right now, some of the best homes out there are the unique, niche ones and you have less competition in the higher-end homes. If you can dream it, if you can make it happen and it is there, then yes home ownership is a great investment — even in the higher-priced homes.
HollywoodLife: Are [Kylie’s and Travis’s new properties] smart buys? Is this a buyers’ market?
Katie: A smart buy really comes down to [this]: if you are buying [the house] with a loan and you are approved, then can you afford this life? If you are buying it with cash, is it a good investment in your life overall? When one is looking at luxury or the higher-priced homes, they tend to not be thinking along the lines of small, but rather “Where is my next investment and where can I put my money and enjoy my life?” It is more about the comfort of life and less about the agonizing if this is a right decision. Rather…”This is my next decision to enjoy the quality of life I have so intentionally designed.” That is the magic question of, “Who does the market belong to?”
Buyers have a great opportunity currently with interest rates being so low, but sellers have a great opportunity to be competitive in their listing/pricing because when inventory is low and buyers want what they have, then they can decide if they are going to hold, list, price, [or] have a bidding war. SO, if you can get pre-approved or if you have the cash to buy then invest, invest, invest and create that quality of life within the “American Dream”! If you are thinking of selling then list, list, list because with the inventory low, you can have a great playing field for yourself. At this moment buyers are winning, and sellers are winning. It is just coming down to we need more inventory so that we can sell and so that buyers can use that low interest rate that they have. With cash buyers, yes, invest and put your money in real estate and stimulate the real estate market along with creating that quality of life that you have envisioned for yourself and your loved ones.
HollywoodLife: Do you think Kylie and Travis got a good deal on their recent purchases?
Katie: When it comes to these price points, it is not as much about a good deal for a smaller mindset of dollars. They purchased not just a home but a lifestyle for themselves by investing in a home and space that matches with what they have worked hard for, that they want for their family and they want for their quality of life. Yes, they created a great deal for themselves by owning an amazing place, in a great area that they are investing in themselves and in return their life expands. This is where their visionary ways within their real estate investing portfolio pays off.
Kylie Jenner gives a peak inside her new West LA estate, which features seven bedrooms, 14 bathrooms, 20 parking spaces, a pool and sports court.
HollywoodLife: On average, what percentage do you think Kylie and Travis saved by purchasing a home now?
Katie: Kylie Jenner’s home was first listed last summer at 55 million and she purchased it for 36.5 million. She did an outstanding business move by purchasing her home for 18.5 million less than the original list price. Travis Scott got his home for a steal when it was originally listed for $42 million and he purchased it all cash for $23.5 million. An amazing decrease of $18.5 million.
HollywoodLife: Are luxury homes cheaper than normal?
Katie: Currently with the inventory being lower than we have seen in years, the price that a home is being listed for is typically what offers are coming in at, or with multiple offers we are seeing countering take place. Yet with the luxury market, there are not as many buyers coming to the table, so as we take a look at both Kylie Jenner’s and Travis Scott’s recent purchases we do see that their homes were listed for significantly higher amounts and they both were able to purchase them for a significantly decreased amount. Adding even more high-end luxury real estate to their portfolios. It really depends where you are looking, what your quality of life looks like and what you are willing to bring to the table to live the most luxurious lives.
HollywoodLife: What is the benefit to buying a home now? Are interest rates lower? Is it a quicker ROI [return on investment]?
Katie: There are numerous benefits to buying a home right now: from the interest rates being at an all-time low, to putting your money in the real estate market, adding to the portfolio, [and] to investing in what is often discussed to be the industry that will and is going to lead our economy forward in a positive motion. For ROI one must look at what they have invested financially, if they are doing home improvements and what that costs along with how long they plan to hold their investment/home or if they want to sell and continue to increase their way of living. We have not seen interest rates like this in a very long time and we do not know when we will again. But in addition to that — as we see with Kylie Jenner and Travis Scott — when you also have cash to use in your investing, you can also create an opportunity of negotiating. It’s all about the quality of life you are committed to.
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Kylie Jenner roams the hallways of her new mansion with Stormi Webster, the makeup entrepreneur’s two-year-old daughter whom she shares with ex Travis Scott.
Jason Arena: Real Estate Agent With Compass
HollywoodLife: Is it a good time to buy a luxury home?
Jason: It is always a good time to buy property in general, especially when that investment has a holding plan of ten or more years. When you are dealing with the ultra high-end, not only is square footage of the home important, but the size of the land the home is built on. Land is hard to come by in Los Angeles so a home on a larger lot is always something to pay attention to.
HollywoodLife: Is purchasing a luxury home competitive?
Jason: A luxury home is worth whatever someone is willing to pay for it. You wouldn’t think that many properties asking $20M+ would have multiple offers but it does happen.
HollywoodLife: Are luxury homes cheaper than normal?
Jason: Brentwood and Beverly Hills are coveted zip codes and properties here demand a premium. Due to our current situation, inventory is down substantially which has limited buyer’s choices. With this lack of supply, prices are up, coupled with record low interest rates; this is driving demand.
HollywoodLife: What is the benefit of buying a home now? Are interest rates low? Would this be deemed a smart purchase?
Jason: There is great opportunity in this market for both buyers and sellers. Buyers are purchasing current and future value while sellers are seeing a premium for their homes. It is a win for both sides.
Shaynah Jones: Assistant With Chris Cortazzo Real Estate
HollywoodLife: Has there been an uptick in luxury homes right now?
Shaynah: The market has been really busy right now. I’d even say busier than usual because all of our agents have been out in the field for a while.
Yawar Charlie: LA-Based Realtor From CNBC’s ‘Listing Impossible’
HollywoodLife: Is a good time to buy luxury properties?
Yawar: The luxury market has seen a major uptake during this pandemic. At a time where many people are seeing a financial pinch, the ultra-wealthy are not. We have been seeing homes regularly selling for above $20 million. Don’t get me wrong, prices have adjusted, and deals are being made, but overall the luxury market is strong.
HollywoodLife: Do you think they (Kylie and Travis) got a good deal?
Yawar: One thing I will say about today’s market is that there is room for negotiation. We have literally been in transactions where we have been able to renegotiate terms after escrow has it opened. This really wouldn’t have been possible six months ago.
HollywoodLife: On average, what percentage do you think they (Kylie and Travis) saved by purchasing a home now?
Yawar: Overall, I would say there are certain sections of the luxury market where someone can save 10 percent-15 percent on pricing since the pandemic has hit.
Interviews were conducted by HollywoodLife reporter Meagan Sargent.