How Do Scandals and Murders Affect Real Estate Prices?
14 August 2006That’s what The Wall Street Journal asks in a recent article. From celebrities to ghost rumors to murders, weird stuff about a house can have a big effect on the price. What kind of effect? Depends. A murder -
Separately, in June, the Chicago home of federal judge Joan Lefkow sold for $759,000. That was well below the $900,000 it was listed at a year ago, a few months after Judge Lefkow’s husband and mother were murdered inside.
Unless, of course, the murder made the newspapers, as in the case of a famous real estate developer in Connecticut:
Mr. Kissel was expected to plead guilty to fraud charges at the time of his death. He was found in the basement of the mansion, which he was renting for $15,000 a month; it is now renting for $20,000 a month and went on sale last week for $5.2 million. It was last on the market in 1998 for $3.495 million.
The article summarizes the various kinds of scandals and their effect on price:
There are different degrees of stigma, of course. Appraisers and brokers say murder — in particular, multiple homicides and cult killings — is by far the toughest kind of notoriety to minimize. Suicides and hauntings come next, followed by illicit sex and celebrity infidelities. When bold-face names aren’t involved, hanky-panky appears to have little impact. “If real-estate values were hurt for every house where the owners were unfaithful, we’d have a fire sale out here,” says Steven Gaines of East Hampton, N.Y., author of 1999’s “Philistines at the Hedgerow: Passion and Property in the Hamptons.”
So the lesson? Well, I guess it’s to go find yourself a house where there’s been a cult killing, buy it at half off, and live in it until people forget about it and you can sell it at full price. If any reader can pull that off, let me know. You’ll be a little weird, but I guess it’s the financially smart thing to do.
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