Back in the day, when Norma built it at the peak of her celebrity, this mansion was quite the spectacle. A happening hub for Hollywood.

"Grim Sunset Castle”

But, like her pool, it's fallen on hard times. As Joe says,

JOE: A neglected house gets an unhappy look. This one had it in spades. It was like that old woman in Great Expectations—that Miss Havisham in her rotting wedding dress and her torn veil, taking it out on the world because she'd been given the go-by.

In Great Expectations, Miss Havisham gets angry at the world (and at men, in particular) after her fiancé leaves her at the wedding altar. Obviously, that would be a pretty traumatizing experience—and Norma underwent a similar form of trauma when her fanbase and the movie producers and directors who formerly loved her finally got tired of her and shoved her aside. The house manifests the same deteriorating effects, provoked by this loss of love. It's a mirror for Norma's own mental state.

Also, inside, the mansion is filled with pictures of Norma—tons of reminders of her own lost glory and celebrity. It's a memorial to her, its owner, and is similar to her own mind, since her mind is also wholly populated by these self-images and self-centered memories. Basically, it's the worst possible place for her to be if she ever wants to let go of her illusions.

But then again, how likely is that?