Stephen Curry isn’t used to losing—at least, on a basketball court. But in the realm of real estate, this Golden State Warriors point guard proved that not all he touches turns to gold when he recently sold his home in Walnut Creek, CA, at a loss.
So what’s the score exactly? In November 2015, Curry and his wife, Ayesha, bought the 7,520-square-foot, five-bedroom, six-bath Mediterranean-style mansion for $3.2 million. Then the couple poured an additional half-million into renovations. A year later, they put it back on the market for $3.7 million. But apparently they’d set their sights too high, because it sat warming the bench with no takers.
Finally in July of this year, the home sold for the lowball sum of $3,195,000—more than a half-million less than what Curry was hoping for and less than what he paid for it almost two years earlier.
This defeat seems all the more resounding considering the fact that his home is situated near the San Francisco Bay Area, where prices are astronomical. Perhaps the Mercury News said it best in the headline to their recent article: “Steph Curry Did It. How Do You Lose Money in the Bay Area Real-Estate Market?”
Good question. What did Curry do wrong?
A lot, actually. Here’s a rundown of his mistakes.
1. He bought the priciest house in the area
“This appears to be a classic example of violating the Real Estate Commandment ‘Thou shalt not buy the most expensive home in the neighborhood,’” says Dave Parsons, a Realtor® in Vermont.
The median listing price in Walnut Creek currently sits at $750,000. As such, “Curry’s property is four times more expensive than other properties,” says Shane Lee, a RentHop statistical data analyst. As such, “there is limited demand for properties like this in the area.”
Plus, home prices tend to lean toward the middle, which spells bad news for expensive homes.
“Real estate prices generally trend toward the mean of surrounding properties, so those priced above the local average will be weighed down by the lower-priced homes around them,” Parsons says.
2. He bought at the top of the market
Although housing prices are sky-high in the Bay Area, the luxe market had begun to level off right when Curry made his purchase—and then move downward by the time he was ready to sell a year later.
“Curry paid top-of-market prices in 2015, as that’s when the market really peaked,” says Cara Ameer, a Realtor in Florida who often handles property for professional athletes. “It has taken a bit of a downward trend since then, and the luxury market has been more challenging to sell since some of the foreign money has dried up.”
3. Location, location, location
Fine, the house is close to the white-hot Bay area, but perhaps not close enough.
“The location of this home is especially troubling because the buyer pool for this type of property is already tiny,” says Washington, DC–based Realtor Cedric Stewart. “Being 50 miles away from where everyone wants to be shrinks that pool even more.”
Plus, “the property does not have any kind of view, and slopes down to a major thoroughfare,” points out Florida Realtor Eileen McNamara-Vecchio. “That’s a hard sell in any price range, even if it is Steph Curry’s property!”
4. He poured a half-million into home improvements
A half-million in home improvements could have been OK if they were the right renovations with universal appeal.
“When putting money into a home, you want to add it to the areas that have payback: kitchens and baths,” says David McLaughlin, a New Orleans, LA Realtor at Keller Williams. “From a design perspective, you don’t want to add anything too out of the box.”
While we’re not entirely sure of exactly what he added after moving in, let’s just say that if he’d installed an NBA-size basketball court (Michael Jordan did it), that type of amenity might not appeal to many buyers other than, well, another pro basketball player.
5. He sold too soon
In addition to buying at a bad time, Curry also sold a mere year after moving in—which many say is too soon to make a profit.
“When you buy a home in an inflated market and have a short holding period, you’re flirting with potential price softening,” says Greg McBride, chief financial analyst at Bankrate.com. “The financial benefits of homeownership accrue over the long term. Even if Steph Curry had sold the home for more than he purchased, by the time you factor in transaction costs, he likely would not have made a profit.”
In fact, one rule of thumb is that unless you plan to stay put for at least three to five years, you shouldn’t buy at all, and rent instead.
Bottom line: Before you buy a home, make sure to seriously ponder that day in the future when you sell.
All that said, “Curry may not have done all that bad,” McLaughlin points out. “It was listed for $3.2 million and sold for $3,195,000 in a market where there is virtually zero demand for homes in that price point. I’d say he came out OK and could have done much worse.”
“While most people would cringe at the thought of losing a few hundred thousand on renovations and price drops in such a short time, you have to remember that Steph Curry makes more than $11 million a year,” adds New York real estate agent Emile L’Eplattenier. “Not to mention the fact that he recently sold a home in Orinda for a tidy $755,000 profit.”
In other words, you win some, you lose some.