It seems the ailing housing market doesn't discriminate on the basis of net worth. Several celebrities have felt the sting of the slumping real estate industry and have had to take huge losses on their investments. Pro wrestler and reality TV star Terry Bollea, more commonly known as Hulk Hogan, first listed his 17,000 sq. foot residence at a whopping $25 million in 2006. It's now listed for just around 9 million, according to real estate information websites Zillow and Trulia. Hogan also suffered a loss on his Clearwater Beach home, according to Zillow, recouping just $1.65 million for the property after originally listing it for $2.3 million.
Other stars including Zsa Zsa Gabor, Camille Grammer, and Ryan Reynolds have also had to reconsider their asking prices in this hostile housing market.
But it's not just pockets in L.A. that are seeing price cuts. Cities across the country, especially those with large surpluses in housing supply, are seeing more and more price reductions and at an increasingly dramatic level.
Between August 2010 and August 2011, more than a third of sellers in Minneapolis, Dallas, and Boston, shaved off between 5 and 8 percent of the original asking price, according to data from Trulia.
Perhaps scarier is the probability those sellers will have to make multiple price cuts. In Phoenix, a city severely hobbled by the housing bubble and foreclosure crisis, there is a one in two chance sellers will have to reduce their asking price multiple times. Las Vegas and Portland, Ore. report similar statistics.
Average percentage cuts for sale properties range from 5 percent in Boston, to as high as 18 percent in Detroit. The average number of days on market before first price reductions typically occur range from 52 days in San Diego to 92 days in Miami.
Why does it matter? Millions of Americans owe more money on their mortgages than what their homes are worth. Price reductions eat away at the value homeowners can recoup and can drive sellers further into debt. That scenario isn't good for the housing market, and it's not good for the economy.
Buy while now might not be the greatest time to sell a home, if you have to, price your house correctly and aggressively the first time based on comparable homes in the local neighborhood, experts say. Due to the low demand for housing in some areas, sellers need to do what they can to attract potential buyers.