Snapchat CEO Evan Spiegel Sells LA Mansion for $16.1M, Nearly $4M Below Asking Price

Snapchat CEO Evan Spiegel sold his Los Angeles mansion for $16.1 million, significantly below the original $19.95 million asking price. Despite a price cut and challenging market conditions, the sale highlights ongoing issues in the high-end real estate market in LA.

Evan Spiegel Sells LA Mansion at Nearly $4M Discount Amidst Challenging High-End Real Estate Market

The current housing market is challenging even for the most affluent individuals. Evan Spiegel, the billionaire CEO and co-founder of Snapchat, serves as an excellent illustration: According to Fortune, this month, he sold his Los Angeles mansion; however, it required a substantial price reduction to attract a buyer.

In March, Spiegel and his Australian model wife, Miranda Kerr, estimated to be worth $3.1 billion, listed the Brentwood property for $19.95 million. A few months later, the price decreased to $17.75 million in July, as indicated by the listing records. However, the 7,000-square-foot residence sold for $16.1 million, nearly $4 million less than the couple had anticipated. Listing documents indicate that the property ultimately closed on September 18.

Drew Fenton of Carolwood Estates, a prestige real estate firm, listed the property. Carolwood Estates did not address Fortune's inquiry regarding the transaction. Carolwood Estates has sold numerous high-profile, multimillion-dollar properties in Southern California, such as the Playboy Mansion.

Spiegel's previous residence was equally prominent before his relocation. The six-bedroom, eight-bathroom residence was constructed in 1951 and was previously possessed by Harrison Ford, the famed Indiana Jones actor, from 1983 to 2012. Kevin Reilly, the former chief content officer of HBO Max, acquired it. The renowned architect Gerard Colcord designed the residence, which Ford purchased for a precise $1 million in the 1980s. Three decades later, Reilly acquired it for $8.2 million.

In 2016, Reilly sold the property to Spiegel for $12 million after flipping it. According to the Robb Report, Spiegel, 34, and Kerr, 41, who resided there for approximately eight years, have recently relocated to their new $120 million "mega-estate" in Holmby Hills. Fortune did not receive a response from Spiegel regarding the sale.

Spiegel and Kerr are also attempting to sell an additional Brentwood property following Kerr's decision to sell her $4.5 million Malibu residence. The other Brentwood residence is a three-bedroom renovated 1921 residence currently listed for $4.95 million.

LA's Mansion Tax Poses Challenges for Sellers, Impacting High-End Real Estate Deals and Profits

Implementing the city mansion tax has been a significant impediment for homeowners and realtors in Los Angeles. An additional 4% tax is imposed on properties valued at over $5 million, and a further 5.5% tax is imposed on properties valued at over $10 million. The vendor is typically responsible for paying the tax. Emma Hernan, a realtor and protagonist of the popular Netflix series Selling Sunset, previously disclosed to Fortune that the sum is distinct from the home's sale price and can be "substantial."

“If I could describe the mansion tax in one word it would be ‘nightmare,’” Hernan said. “It’s taken a lot of business away from us as agents, but also [from] developers. Developers are less likely to go purchase another home to try and do a flip because the numbers aren’t going to add up when you add in this mansion tax.”

Spiegel is one of many oligarchs experiencing difficulty selling his residence. Rupert Murdoch, the billionaire media mogul and owner of News Corp, was compelled to reduce the price of his Manhattan penthouse by nearly 40% to $38.5 million earlier this year. Additionally, rapper Ye, previously known as Kanye West, reduced the price of his Malibu estate from $53 million to $39 million, a decrease of over 26%.

Niklas Hackstein, a luxury real estate agent with Compass, previously informed Fortune that the market is "imbalanced" due to low inventory levels, even though luxury properties are more expensive than ever and transaction volumes are generally trending upward.

“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 said. “[It’s] kind of like they’re doing the seller a favor to take the home off their plate.”