Wealthy people are decking out their homes with underground basketball courts and $500,000 panic rooms, but there's a hidden danger in the trend of customization
Terry J Alcorn/Getty Images
- The luxury real-estate market is hitting a point where homes are so over-customized that they're hard to sell.
- High-end homes in luxury markets like Los Angeles, NYC and the Hamptons, and London are decked out with details like basketball-court basements, bedrooms converted into recording studios, extensive security systems, and $500,000 panic rooms.
- These homes are being customized by both developers and homeowners.
From underground basketball courts to private recording studios, luxury homes are hitting a point where they're so over-customized that they're hard to sell.Alec Traub, a Los Angeles-based real-estate agent with Redfin recently told Business Insider that the trend can be seen across wealthy LA neighborhoods including Beverly Hills, Hollywood Hills, and Bel-Air.
These homes are being customized by both developers and homeowners, Traub said.Read more: Luxury real estate developers are building out elaborate basements for multimillion-dollar mansions, and they include spas, tennis courts, and even ballrooms
Developers, he said, will "add features they think people want or need, but they don't err on the side of caution."As Business Insider's Hillary Hoffower previously reported, wealthy people are sparing no expense to keep their lives private and secure, whether that means removing their homes from the grid or hiring architects to conceal buildings. And yet, there is, Traub said, a level at which homes become overly privacy- and security-oriented in a buyer's eyes.
George Gutenberg/Getty Images
"I've seen examples where you walk into a house and every room has a camera," he said. "And not everyone wants that."A property developer who's designed multimillion-dollar NYC penthouses says there are 2 major surprises in the luxury real-estate market right now
On top of that, homeowners add their own touches that cater to their personal, professional, and family-based needs.
"You'll see that entire rooms have been blown out to create recording studios," Traub said, "or a whole basement has been turned into a basketball court."Traub also said that while customization has long been a trend in luxury real estate, it's become particularly prominent as the idea of live-work spaces has evolved. Rather than having separate spaces, the two functions merge into a single space.
Evidence of over-customization hurting a home's chances on the market can be clearly seen in the likes of an $85 million NYC condo that comes with a $2 million construction credit in case the purchaser doesn't like certain layout details. Or the Bel-Air mega-mansion that comes with a 40-seat movie theater, a bowling alley, and a massive candy wall - and which, after two years on the market and a $100 million price cut, is still not selling.Read more: Nobody wants to buy 'Versailles in Manhattan,' a $19.75 million Upper East Side townhouse that has been on and off the market for 15 years
While prominent in LA, the trend isn't localized to the West Coast - nor is it always visible to the plain eye. As Business Insider's Katie Warren previously reported, luxury real-estate developers are pouring money into basement-level layouts replete with spas, art galleries, and ballrooms in luxury markets like San Francisco, The Hamptons, and London. Similarly, some wealthy homeowners have paid up to $500,000 to install luxe panic rooms in their houses.Ultimately, the problem with personalized touches in multimillion-dollar homes is that at higher price points, buyers tend to be selective and specific about what they want. As such, high personalized details don't help homes in resale: They actually hurt them. Wealthy buyers, Traub said, "don't want to buy a fairly brand-new home and then put money into it to turn it into what they want. They'll just look at other homes that match their exact wants instead."
"The question isn't 'how much did this cost to build,'" Traub said. "Instead, it becomes 'how much would it cost to have this taken out?'"
- Education, skill, research, innovation second biggest focus of budget after health: PM at webinar on budget provisions for higher education. PTI KR ASK DV DV
- Union Budget has broadened our efforts to link education with employability and entrepreneurial capability:PM Modi at webinar on education. PTI KR ASK DV DV
- India records 14,989 new COVID-19 cases in last 24 hours
- Patient with underlying disease dies after getting AstraZeneca COVID-19 vaccine in South Korea
- Word-of-mouth has helped us grow in India, our community members are our best marketers: Taru Kapoor, Tinder