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Purchasing a home made famous by ‘Home Alone’ or John Lennon comes with a premium

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The real estate market is currently booming with an array of iconic homes for sale, and buyers are willing to pay a premium for the pedigree that comes with owning a famous property. However, quantifying this premium can be difficult, as some uber-wealthy buyers will pay almost anything to own a piece of pop culture.

Luxury real estate prices have recently hit a record high, and the uber-wealthy buyers are largely insulated from high mortgage rates as many can afford to make all-cash deals. Famous homes generally command even loftier price tags than their market equivalents, with some luxury real estate agents estimating a premium of perhaps 5% to 10% for homes tied to household name celebrities.

Buyers of famous properties often view the homes as collector’s items and make emotional purchases, driving up the prices through initial high asking prices or bidding wars. Infamous properties can also fetch a higher price, as seen with the sale of the LaBianca house where Charles Manson’s followers committed murders, which sold for $1.875 million in 2021 due to its notoriety.

However, there can be limitations to how much super fans are willing to pay for famous homes. The value of a property can be affected by factors such as the condition of the home and its proximity to a famous residence. For example, Kanye West has struggled to sell his Malibu mega-mansion, which he gutted and left in disrepair, highlighting the importance of keeping a property updated and move-in-ready to attract buyers.

Ultimately, a home’s value is subjective and depends on what a buyer is willing to pay for it. Whether it’s a sprawling estate with Hollywood cachet or a run-of-the-mill bungalow, the price a buyer is willing to pay for a property is determined by their personal preferences and financial capabilities. Famous homes will continue to attract high prices from wealthy buyers looking to own a piece of pop culture history.

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