$100M price tag stymies Neverland sale

Almost a year ago, in May 2015, Michael Jackson’s former Neverland Ranch hit the market.

The 12,598-square-foot French Normandy-style house sits on 2,698 acres in the Santa Ynez Valley, northwest of Los Angeles. It has six bedrooms, a 4-acre lake with its own waterfall, an outdoor barbecue, a pool house, three guest houses, a tennis court, and a 5,500-square-foot movie theater and stage. Asking price back then? $100 million.

Asking price 10 months later? $100 million.

The reason for the lack of movement on the price tag isn’t a stubborn seller or the lack of draw — it really does have a fairy tale feel. Houses in the highest echelon of the real estate market — everywhere — aren’t selling fast. The key to unloading a $100 million property these days? Be patient.

“The uber-luxury highend market is not anywhere near where it was three, four, five years ago,” says Brendon DeSimone, a real estate expert with the listings site Zillow. com. “That market has just really slowed down, and there are only so many billionaires who can afford to buy these homes.”

Dropping oil prices, fluctuating stock markets, and weak currencies have led to slowdowns in the world’s priciest markets. International buyers are still a force in the American real estate market, in part because high net worth individuals are looking for safer places than the stock market to park their cash. But it’s a little more risky to invest in a property that’s off the beaten luxury path, no matter how storied its pedigree.

Sycamore Valley Ranch, as Neverland is now called, has three major hurdles to overcome: location, location, location.

The property — bought from a financially ailing Jackson in 2008 with a $23.5 million note from Thomas Barrack Jr.’s Colony Capital LLC — is located in Los Olivos, a town of around 1,100, about 130 miles northwest of Los Angeles. That’s pretty far from the proliferation of the highest-end homes.

“Most of the homes in these price ranges are waterfront, or with ocean views, or they’re in the cities,” DeSimone says. “They’re concentrated in L.A., New York, San Francisco and Miami.”

According to Zillow, Sycamore Valley Ranch is asking more than 180 times the median house value in Santa Barbara County, which is $548,500. Wayne S. Natale, real estate broker for nearby Village Properties and a 30-year veteran of real estate in the Santa Ynez Valley, says there are few truly high-end properties in his domain.

“There’s never been a $100 million sale in the Santa Ynez Valley,” Natale says. “If it was in Aspen it would be a $100 million property, or maybe if it was in upstate New York or the Hamptons, but here that asking price has a lot of blue sky in it.”

To be clear, he’s not saying the property won’t fetch that price, just that it might take a long time.

“Any property in the valley that’s even $3 million and up, it’s typically on the market for two to three years,” Natale says.

Some sellers do consider price chops. Elk Mountain Lodge, a 27-bed, 32-bath mansion in Aspen owned by Bill Koch, hit the market last year for $100 million. It was delisted, then came back a couple of weeks ago at an asking price of $80 million.

The truth is, not much is selling for those prices, anywhere, or at least not publicly. The most expensive house sold on Zillow in 2015 was $46.3 million. That was Kenny Rogers’ old place, 23,988 square feet in Bel Air. The last property on their list of the 10 most expensive houses sold last year is in Great Neck, N.Y., sold for a wee $19.9 million.

That doesn’t mean there’s truly a limited supply. Likely many high-end properties aren’t public listings.

“When you start getting north of $10 million, it’s a lot of that stuff never goes to market, a lot of pocket listings or quiet listings,” DeSimone says. “They’re only sold through brokers you know.”

Even if he wasn’t a presence in the town, Jackson’s legacy could still help the property fetch a premium price. “If somebody wants to buy it and thinks that because Michael Jackson owned it that has monetary value, it’ll sell for $50 million or above,” Natale says. “It’s going to take somebody that falls in love with it, and then the $100 million doesn’t make any difference to them.”