The "why" may still out there, but interesting finding!
Where are the shareholders' mansions? CEOs' home purchases, stock sales, and subsequent company performance - Knowledge@W. P. Carey:
"In a new study, W. P. Carey finance professor Crocker Liu, director of the school's Center for Real Estate Theory and Practice, and David Yermack, professor of finance at New York University, examined the size, cost, and financing of the primary residences of CEOs of the Standard & Poor's 500.Very interesting. Some confounding variables (for instance is it a wealth effect, timing effect, or merely loss of focus?) but really cool finding! BTW the authors go to great lengths (aerial photos, controlling for if it is a new house or not, distance from office etc) to control the confounding variables.
Liu and Yermack discovered important correlations with future company stock performance: The larger and more costly the home, the worse the stock performance. Also, when a CEO liquidates company shares or options to finance a home purchase, even if the sale represents a small share of the CEO's total holdings, it bodes poorly for future company performance."