Elon Musk is making good on his promise to sell all his possessions, listing more of his California mansions for sale on housing market database Zillow.
On Wednesday, Musk put up four Los Angeles homes on the same hill, and one in Hillsborough, for a combined asking price of over $97 million.
The Silicon Valley billionaire framed the sell-off as a way to avoid being weighed down by material possessions. But it looks like an awfully hasty exit from a troubled U.S. housing market.
When big money moves, the shrewd take notice.
Elon Musk recently sat down for a two-hour interview on the Joe Rogan podcast. He said he’s selling his possessions because they make him a target for critics of billionaires:
I think possessions kind of weigh you down. And they’re kind of an attack vector. You know? People say, ‘Hey billionaire, you got all this stuff.’ Like, well now I don’t have stuff. Now what are you going to do?
And he felt his houses are taking time away from his Mars ambitions:
Does it really make sense for me to spend time designing and building a house? And I’d be real OCD on the little details and the design. Or should I be allocating that time to get us to Mars? I should probably do the latter. So, you know. Like what’s more important, Mars or a house? I’m like, Mars.
But all that talk serves a clear public relations interest. And it’s hard to ignore the timing of Musk’s sales with the rumblings in the housing market.
All that Jack Dorsey-style hippie talk about material possessions may play well for Musk’s reputation, but he’s not giving his money away. He’s protecting it from crashing real estate prices in a recession.
Elon Musk has said in the past that he’s an engineer, “not really a businessman.” But there’s no denying that he’s also a very keen business person, with a penetrating understanding of market movements.
Even in a typical housing market, May and June are the best months to sell a home. But selling right now is even more urgent this year, with home prices expected to decline over the rest of 2020.
Zillow forecasts as much as a 4% drop in home prices by the end of the year. And that’s coming from a company that helps sell houses. Just as sure as a barber is going to agree that you need a haircut, you can expect the real estate industry to paint a rosier-than-likely outlook for the housing market.
On top of that, economists expect the high-end housing market to decline more steeply this year than mid to low-end inventories. Elon Musk could make off with as much as 10% above market value by exiting now instead of waiting until later this year.
Betting against Elon Musk has been expensive for Tesla (NASDAQ:TSLA) bears. But this year, it could get ugly for housing market bulls.
Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com. The above should not be considered investment advice from CCN.com. The author holds no investment position in real estate or TSLA at the time of writing.
This article was edited by Josiah Wilmoth.