The cuts follow a spate of even bigger cuts earlier this year. The $250 million mansion in Bel Air California known as "The Billionaire" became America's most expensive listing when it came onto the market for $250 million in 2017. In April, the price was cut by a massive $62 million, to $188 million.
Brokers representing the house said that unique homes like "The Billionaire" – which comes with a $30 million car collection, a giant outdoor TV that retracts from behind the pool, and elevators lined with crocodile skin – said the home is just finding its true market price.
"There is no comp for a house like this," said Shawn Elliott, one of the brokers for "The Billionaire." So the new price reflects the price offered by a recent potential buyer.
A spec home in Beverly Hills, called Opus, was listed in August of 2017 for $100 million, but the price was cut to $85 million a month later. Now the home, which once had a gold theme, has been re-styled in black in hopes of finding a buyer.
The late Johnny Carson's estate in Malibu, Ca. saw its price drop by $16 million, to $65 million from $81 million. The house is being sold by fashion magnate and film producer Sidney Kimmel.
Even homes that see big price cuts are selling for less than their discounted prices. A 20,000 square-foot mansion in the Hamptons, once owned by fashion mogul Vince Camuto, was first listed in 2008 for $100 million. Its price got chopped to $72 million, and it sold this spring for around $50 million – half of its original listing price.
Even the Oracle of Omaha, Warren Buffett, has had to lower his asking price on his beach home in Laguna Beach. The home was listed in 2017 for $11 million, but he has slashed the price to $7.9 million. He's still likely to make a big profit – he bought the home in the early 1970s for $150,000.
The reasons for the price drops are many. In some cases, the prices for the homes were fantasies. Sellers had irrational expectations or they were using the sky-high prices to attract attention to their properties. The luxury real-estate market has fallen since its peak in 2014 and 2015, and many sellers are finally adjusting to a different market.
Supply of homes at the high end is also high, especially for newer condos and spec homes in New York, Los Angeles and major metro areas.
"There could be an over-supply of these high-end homes," Marr said.
The new federal tax law, which limits deductions of state and local taxes, is also putting pressure on real-estate in high-tax states. And foreign buyers, who were driving some of the highest-priced sales in 2014 and 2015, have pulled back. A stronger dollar has also made U.S. real-estate more expensive.
It's unclear whether the price cuts signal an upcoming crash in the luxury market. Prices could simply adjust without a severe correction. But the size of the cuts suggest that many luxury listings have yet to find their sale prices.
"Price cuts can be a great leading indicator and give a forward-looking view," Marr said. "But it's too early to tell where it's headed."