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Stars feel heat

Properties not selling, foreclosed

By Christy Lemire | Thursday, July 10, 2008

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LOS ANGELES (AP) — Tabloid magazines like to reassure us that celebrities are just like us. They go grocery shopping, take their dogs for strolls around the neighborhood, even pump their own gas.

These days, that also can apply to the plummeting real estate market. Several celebrities have faced foreclosure on their luxurious estates, and many more have had to drop their asking prices, putting some high-profile faces on a growing problem: The real estate meltdown is hitting every socioeconomic class.

The case of Ed McMahon has shown that you can make millions over a lengthy show-business career and still find yourself in foreclosure. Johnny Carson's former "Tonight Show" sidekick owes more than $644,000 in mortgage payments on his Mediterranean-style estate in Beverly Hills, a house he and his wife have been trying to sell for the past two years. The six-bedroom, five-bathroom home — in the same exclusive gated community where Britney Spears lives — is on the market for $6.5 million, down from an original price of $7.6 million.

The 85-year-old television personality, who has been unable to work since breaking his neck in a fall 18 months ago, described his economic problems as "a perfect storm."

"If you spend more money than you make, you know what happens. And it can happen. You know, a couple of divorces thrown in, a few things like that. And, you know, things happen," Mr. McMahon said recently on "Larry King Live."

He is not the only celebrity to find himself in such financial trouble. Former NBA player Vin Baker saw his home in Durham, Conn., go up for auction last weekend. The seven-bedroom, 6 1/2-bath mansion had been on the market for $2.95 million. Earlier this year, former baseball star and "Juiced" author Jose Canseco stopped making payments on his $2.5 million home in the upscale Encino section of Los Angeles' San Fernando Valley.

Rick Sharga, vice president of marketing for RealtyTrac, which monitors foreclosures, says people of any income level can get in trouble by buying overvalued homes at the peak of the market that ultimately they can't afford.

"Ed McMahon's a sympathetic character in this scenario in that he got into a house that possibly he could have afforded if he had been able to keep working; then he had an injury that upset his financial apple cart pretty badly," Mr. Sharga says.

It's not all doom and gloom, of course. Avril Lavigne listed her nearly 6,900-square-foot Mulholland Estates mansion for $5.8 million and recently accepted a cash offer of $5.2 million after just 36 days on the market.

Yet as celebrity real estate columns such as Hot Property in the Los Angeles Times and Gimme Shelter in the New York Post show, other stars can't command the same prices for their homes that they might have been able to get a few years ago.