Michael Jordan Could Have Sold at Auction
Hi, my name’s Mike Russo, I’m the founder of SparkOffer and I wanted to talk a little bit about selling luxury real estate in today’s market. So there’s been a lot of press lately with Michael Jordan’s new ESPN documentary “The Last
Dance” and a number of people have been sharing with me the article that was sent on Sports Illustrated that you can see.
Hey, does anyone have $15 million to spare? Why is nobody buying Michael Jordan’s home in Illinois? Last year in October, Business Insider did another article about it saying that house has been on the market for eight years. Why can’t he sell it?
The article discussed my old firm, Concierge Auctions, and the fact that we auctioned it. How come it didn’t sell? What’s really happening? And I would tell you that it wasn’t that we couldn’t sell it. In fact, the original auction was a no reserve auction, which most sellers have the right to cancel right before the auction.
And that’s exactly what happened in that situation. The auction was cancelled.
Then it was remarketed as a reserve auction. We had a reserve auction, there were high bids, and I don’t remember exactly but I’m pretty sure that there were eight figure bids that Michael Jordan could have decided to take even
though it was below his reserve.
I’m thinking today that the person that wakes up every day saying “Thank God he didn’t take my bid” was the high bidder seven or eight years ago. This is the challenge of selling in this upper, upper end of luxury markets.
These are supply and demand markets. It’s basic economics just like everything else.
And there’s not a lot of buyers for these truly upper end properties that most sellers really built for themselves and their lifestyle.
I think the challenge that most of us in this space have when you’re really selling these truly luxury homes is that it’s really no different than a private jet or a yacht that somebody might buy and own for themselves.
There’s no one and there is no high net worth individual that is buying private jets or buying a yacht for themselves that is going to sell it five years later and say, hey, I should get more money than what I paid for it. And that’s exactly what goes on with the homes. When it comes to the home and something that is that immensely personal that they built and they lived in daily, when they go to resell them they really think that the market should pay them more.
And that’s just not happening.
These properties are selling at a significant discount to what somebody probably invested in the home. It doesn’t have to be a $10 million plus property.
It exists in other properties, and for example we’re selling a lot with SparkOffer
in Greenwich, Connecticut these days. We recently sold a house with Jennifer Leahy at Douglas Elliman, and that property the seller bought pre-crash. They bought it in 2005. They spent $5.4 million on the house. And now in 2019, we sold the house for $3.6 million. And why is that? There’s just not as many people coming to Greenwich, Connecticut from New York mostly, that want to make that commute and there’s just not as high a buyer demand for these properties. And so therefore, most of these properties are taking years to sell and they have to be priced well and out of value to get attention.
We created SparkOffer around this to create an open marketplace so that there can be speed in price discovery without having to have an auction.
If you have any comments, questions, we’d love to hear from you.
You can email me at email@example.com. We love talking about luxury real estate.
We love helping both agents and seller decide on a strategy and a plan to move on and get these assets sold in today’s market.