Even the wealthiest of buyers are facing a housing market in which prices continue to skyrocket. Indeed, the price of a typical luxury home jumped nearly 9% since the start of the year—making them the most expensive they’ve ever been.
Yet, some high-profile properties have had a hard time selling lately. Billionaire media mogul and proprietor Rupert Murdoch earlier this month had to slash the price of his Manhattan penthouse nearly 40% to $38.5 million. And even more recently, rapper Ye, formerly known as Kanye West, cut the price of his Malibu mansion from $53 million to $39 million, a more than 26% decrease, according to a San Francisco Chronicle report.
Ye bought the property just three years ago for $57.25 million, according to Los Angeles County property records, with the intention of gutting and redesigning the property. The beachside estate was designed in 2013 by renowned architect Tadao Ando. He also designed a Malibu beachfront home for soap-opera heir William Bell Jr. and his wife Maria. Beyoncé and Jay-Z purchased that home in 2023 for a whopping $200 million, a transaction that shattered California price records.
Ye’s 4,000-square-foot property was originally listed for $53 million in December 2023, but now is listed by the Oppenheim Group—the brokerage most famous for its popular Netflix show Selling Sunset—which has the property listed at a $14 million discount.
But if luxury home prices are on the rise, then why would Ye and listing agent Jason Oppenheim be willing to offer it at such a steep discount? Well, because the property is still largely unfinished after Ye committed to gutting the property just a few years ago. Indeed, “all interior finishes have been removed from the property, and work is needed to either restore or reimagine the interiors,” according to the Oppenheim Group listing. The Oppenheim Group didn’t respond to requests for comment from Fortune.
“All luxury real estate is not created equal,” Grant Cardone, CEO and founder of real-estate investment firm Cardone Capital, tells Fortune. “Kanye West, ‘Ye’ has an unfinished product in a less than desirable location. Despite the fact that it is in Malibu, it’s just not perfect.”
What Ye was expected to do with the property
Ye wanted to completely gut the Malibu mansion—removing fixtures, windows, doors, plumbing, and electrical systems, but that renovation vision “never materialized,” according to the San Francisco Chronicle. He halted the project in November, according to The Daily Mail, after closing his building company, Yeezy Construction Inc., due to financial struggles. Some outlets have reported that the loss of his Adidas deal put him in such a tough financial position that he had no choice but to shut down his construction company and the renovation project on his own home—which many of his Malibu neighbors reportedly said was “left to rot.” Representatives for Ye did not respond to requests for comment about the property.
“The reason why Ye’s house didn’t sell is he didn’t finish it,” Cardone says. “Rich people want it done. It’s comparable to [Ye] doing an album with no music on it. With the quality that the wealthy want, he would’ve sold it already for a premium.”
And to get the property back to a desirable living space for a buyer, it’s going to cost them.
“It will cost probably $5 million or more to get the property where the new buyer wants it,” Oppenheim told the Chronicle. He called it an “opportunity” for someone to curate and finish the property to their liking “while still keeping all of the architectural integrity and concrete work of Tadao Ando.”
The original construction of the home required 1,200 tons of concrete, 200 tons of steel, and 12 pylons driven 60 feet deep into the ground, according to the Oppenheim Group. However, Oppenheim told the Chronicle that a crew had been working on the property to prepare it to sell.
“It’s ready to go,” Oppenheim said. “We’re actually ready to start putting on windows and doors and put the mechanical back in. We could start moving on it tomorrow if we wanted.”
What’s going on in the luxury real estate market?
Cardone says it’s not unusual for the ultra-wealthy to purchase a home just to turn around and gut it. Indeed, Amazon founder and former CEO Jeff Bezos is buying up several Miami properties in the “Billionaire Bunker” area to make one mega-mansion.
“The super wealthy don’t just want houses,” Cardone says. “They want compounds and the potential for expansion, where possible.”
And while it’s true that luxury home prices—and the number of transactions—are generally trending upward, we’re still experiencing a tale of two markets. Indeed, the number of closed deals in all luxury home segments ($3 million to $5 million; $5 million to $10 million; $10 million to $20 million; and $20 million-plus) has increased since last winter, Niklas Hackstein, a luxury real-estate agent with Compass, tells Fortune. But the market is also “imbalanced” due to low inventory levels.
“Buyers in the luxury sector are either in love with what they are seeing and competing with other bidders or they do not like it at all and won’t take it unless it is at an incredible discount,” Hackstein says. It’s “kind of like they’re doing the seller a favor to take the home off their plate.”
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