Krueger notes that the 1990s drop was triggered by job losses amid a broad economic downturn. The current housing malaise is largely driven by an affordability crunch at the lower end of the market, he says, as adjustable-rate loans ratchet higher and lenders tighten standards to counter rising defaults on mortgages.
Demand high, supply low
Such problems seem remote in L.A.'s ritziest neighborhoods, where agents say demand usually trumps supply.
"It's like floor seats at the Lakers games -- there are only so many courtside seats available," says broker Stephen Shapiro, co-owner of Beverly Hills-based Westside Estate Agency, which almost exclusively sells multimillion-dollar properties.
It wasn't that long ago that a million bucks bought a true estate in the Platinum Triangle. One of the first sales topping $1 million was Hugh Hefner's 1971 purchase in Holmby Hills of what would become known as the Playboy Mansion.
It was about then that Rey began her career in real estate, with an eye on selling only high-end homes. At the time she was the wife of the TV actor Alejandro Rey and living in Beverly Hills. Building her client list was made easier by the fact that she was already traveling in Hollywood's elite circles.
Since then she has filled her resume with a catalog of record-breaking landmark sales in the Platinum Triangle, putting her in the top 1% of all U.S. real estate agents in sales by dollar volume.
In 1978, Rey became the first agent to sell a $4-million house in the Platinum Triangle, which happened to be double the highest price ever paid for a Los Angeles home.
The following year, she won the listing for Pickfair, the 42-room mansion owned by early film stars Douglas Fairbanks and Mary Pickford that had never been on the market before. It was bought by Jerry Buss in 1980 for $5.4 million.
In 2001, Rey closed a $29-million sale in Beverly Hills, at the time the highest price paid in a decade.
Now Rey is on the verge of her biggest deal. In April she and another agent landed the mother of all Platinum Triangle real estate listings -- a five-acre Bel-Air estate known as Fleur de Lys built by Metro Networks founder David Saperstein and his then-wife Suzanne in the 1990s. Asking price: $125 million.
"There just hasn't been anything on the market like this before now," Rey says.
The mansion, modeled after France's Versailles palace, has 45,000 square feet of living space. Features include a ballroom adorned with ceiling frescoes, a library stocked with prized first-edition books and an indoor jogging track.
In the last two months, there have been more than a dozen showings, and the only ones allowed in for a tour are those who can prove they can afford it. In other words, billionaires.
If the property sells for anywhere near its asking price, it would break the record for the most expensive residential sale recorded in the United States. The record currently belongs to another Platinum Triangle address, a Bel-Air estate purchased by telecom mogul Gary Winnick in 2001 for $94 million, according to public records.
Given the strength of the high-end market, breaking another record seems within reach.
"I'm counting on it," Rey says.