The Celebrity Premium Myth And Why Michael Jackson’s Neverland Ranch Is Finally Priced To Sell

When Michael Jackson’s Neverland Ranch was initially put up for sale in 2015, six years after the singer’s death, the list price was $100 million. No buyer emerged, so two years later, the price fell to $67 million.

Now, the property is back on the market—this time, for $31 million, a 70% discount.

The dramatic drop comes amid growing controversy around Jackson and the estate, with Leaving Neverland, a two-part documentary that aired on HBO on Sunday and Monday, prompting new scrutiny of old molestation accusations against Jackson. While the Jackson estate has denied the allegations and told the Wall Street Journal that the timing of the Neverland Ranch sale was merely a coincidence, observers may be wondering if the property has lost the premium that an association with a beloved celebrity might provide.

In all likelihood, though, there was probably never a premium to begin with.

Jonathan Miller, president of property appraiser Miller Samuel, says the $100 million listing in 2015 was made during an era of “aspirational pricing,” when $50 million-plus listings hit the market seemingly every week. Many sellers plucked those astronomical figures simply as a way to generate buzz. Le Palais Royal (now called Playa Vista Isle) in Florida, for instance, was initially listed for $139 million, making it then the most expensive home on the market in America.

In the case of Neverland Ranch—an almost 12,000-square-foot home on nearly 2,700 acres in Los Olivos, California—the owners “had to test the market and make sure they weren’t leaving any money on the table,” says Dina Landi, a real estate agent in nearby Santa Barbara. Maybe a Jackson mega-fan would pay something extra for “a piece of history.”

But if you look back at those properties now, virtually none sold for their listing price, says Miller. “They were never worth that,” he adds. “There was hyperbole associated with high-end property.” (That Florida estate sold for $42.5 million at auction last December.)

Real estate broker Kerry Mormann, who also works in the area, says that when he viewed the property back in 2015, hoping to score the listing, the price he recommended to the owners was $50 million to $60 million.

Celebrities often ask for a premium for their properties, but one typically doesn’t materialize when the property is actually sold. A 2016 Redfin study that looked at 60 celebrity-owned properties in Southern California found that they on average stayed on the market for about 36 days longer than other homes and usually sold for less than the asking price.

“It’s a great marketing hook,” Miller says, but the general consensus is that while a high-profile name may draw a lot of attention from casual observers, prospective buyers who can afford a property in the tens of millions are focusing on the data, Landi says.

“If they actually want to sell, they’re going to have to capitulate to market conditions,” Miller says.

Based on interviews with industry experts and data from Zillow and Redfin, Forbes values Neverland Ranch at $28 million, in line with the new asking price. Real estate agents in the area agree that the $31 million price point is likely to bring in a buyer. In fact, adjusted for inflation, that figure is actually cheaper than the $19.5 million Jackson bought the property for in 1987 ($44.1 million in today’s dollars).

Neverland Ranch’s listing agents, Suzanne Perkins and Kyle Forsyth of Compass, did not respond to multiple requests for comment. Colony Capital, which jointly owns the property with the Jackson estate, could not immediately be reached.

The home is styled as an extravagant French chateau, and the property retains touches from Jackson, like a garden that spells out “Neverland.” “It’s really a lifestyle property,” Mormann says. The largest chunk of the property’s value, though, comes from the land.

Still, the question of what could become of Neverland’s nearly 2,700 acres plays into its price tag. Eric O’Keefe, editor of the Land Report, an industry magazine, points out that buyers will typically spend hundreds of millions of dollars only on properties they think can deliver a significant return on investment: productive farmland, timber tracts or vineyards, for instance. Two estates on a combined 3,500 acres in Santa Barbara that are asking $110 million come with a working cattle ranch and two orchards.

Neverland doesn’t fall into that category. Developing the land in smaller parcels is basically a non-starter, given Santa Barbara County’s policy of prioritizing agricultural viability, according to Mormann. Neverland’s established use, he says, is cattle grazing, meaning the parcels would have to be some 300 to 500 acres to be viable, but the profit margin would be too low to justify the time and expense.

The property could be turned into a Graceland-type tribute to the King of Pop, but that process would be time-consuming, the 40-mile drive to the City of Santa Barbara might limit the number of visitors, and the renewed interest in the sexual misconduct allegations against Jackson might have tempered the interest for such a museum.

In an effort to make the property more attractive to potential buyers, Colony Capital has removed the amusement park rides it was once known for, Forsyth, the co-listing agent, told the Wall Street Journal. But the sellers may be distancing the property from Jackson in other ways. For the last several years, it’s returned to its original moniker, the Sycamore Valley Ranch. Never say Neverland, perhaps.

This post first appeared on Forbes.com. To see the original, click here.