Bel Air's Casa Encantada Sells for $130 Million at Foreclosure Auction, Topping July Trophy Home Sales

The most talked-about residential real estate transaction in Los Angeles this summer did not happen through a traditional listing agent, nor did it involve a standard 30-day escrow. Instead, the 60-room Bel Air estate known as Casa Encantada sold at a foreclosure auction in July 2026 for $130 million. For luxury homeowners and market observers, the sale provides a rare, transparent look at the mechanics of distress at the very top of the market.[1][2]

Casa Encantada is not a typical luxury home. Completed in 1938 and spanning roughly 40,000 square feet across 8.4 acres overlooking the Bel Air Country Club, the Georgian Colonial mansion has twice set the record for the most expensive home sold in the United States. Its pedigree is matched by its roster of former owners, which includes hotelier Conrad Hilton and Dole Food billionaire David Murdock.[5]

In 2000, telecommunications billionaire Gary Winnick purchased the estate for $94 million, setting a national record at the time. Winnick and his wife, Karen, spent tens of millions restoring the property, treating it as a steward would a museum piece. By 2020, the estate was listed for a staggering $250 million, an asking price that would have shattered U.S. residential records had it been realized.[1][2][5]

The path to foreclosure began that same year, when the Winnick estate borrowed against Casa Encantada through a commercial real estate lender, CIM Real Estate Credit LLC. By the time Gary Winnick passed away in late 2023, the outstanding debt on the property had ballooned beyond $150 million, a figure that included accumulated interest and fees.[1][4]

Following Gary Winnick's death, his widow Karen Winnick fought to retain control of the property. She filed legal claims alleging that the lender had engaged in a "loan-to-own" scheme designed to engineer a default and seize the historic estate. Despite these claims, the courts did not halt the foreclosure process, allowing the trustee's sale to proceed.[1][3][4]

As the legal battle unfolded, Casa Encantada's asking price experienced a steep, public decline. From its initial $250 million listing, the price was reduced to $195 million in 2022, and then to $165 million by early 2026 as foreclosure proceedings loomed. Ultimately, the property sold at the July auction for $130 million—a 48 percent drop from its original asking price.[1][4]

Unlike a traditional sale negotiated between a buyer and seller on the Multiple Listing Service, a trustee's sale is a public auction triggered by a borrower's default. The winning bidder, whose identity remains undisclosed, acquired the estate directly through this distressed channel, bypassing typical market negotiations.[1][3]

One of the most significant financial mechanics of this sale involves Los Angeles' Measure ULA, colloquially known as the "mansion tax." The tax applies to the recorded deed transfer regardless of whether the transaction is a standard sale or a foreclosure auction. At a $130 million sale price, the Measure ULA obligation is a staggering $7.15 million.[1]

In a traditional sale, the seller typically pays the transfer tax. However, in a trustee's sale, the buyer bears the documentary transfer tax when the deed records. This means that any bidder at a high-stakes auction like Casa Encantada's must factor the multi-million-dollar tax burden into their total acquisition cost before ever raising their paddle.[1]

Despite being a distressed transaction, the $130 million sale of Casa Encantada stands as the largest single-family residential deal in Los Angeles County for 2026. It also ranks as the second-most expensive home sale in the United States for the year, trailing only a $170 million transaction on Florida's Indian Creek Island.[1][2][6]

The sale topped July's list of $40 million-plus trophy home transactions, which included a $55 million beachfront mansion in Malibu and a $48.5 million architectural property in Corona del Mar. These figures indicate that while the broader housing market may be experiencing a slow summer due to elevated mortgage rates, the ultra-luxury segment continues to move vast sums of capital.[2][6]

What remains unknown is the identity of the buyer who secured Casa Encantada. High-end auction purchases are frequently executed through limited liability companies or trusts to maintain privacy, leaving market watchers to speculate on whether the new owner intends to occupy the historic estate, renovate it further, or hold it as a long-term investment.[1][3]

For owners of ultra-luxury real estate, the Casa Encantada saga serves as a cautionary tale about pricing risk. The property's journey from a $250 million aspirational listing to a $130 million foreclosure sale illustrates the compounding dangers of overpricing, accumulated debt, and prolonged market exposure, even for one of the nation's most celebrated homes.[1]