TRD forum: The state of LA’s luxury market, according to top brokers who live and breathe it
Written by Natalie Hoberman | Read the original article here
Angelenos are no stranger to high price tags, but with the Chartwell home listing for a record $350 million, has the bar been raised cartoonishly high?
Talk of Mr. Gucci, clients demanding bulletproof windows and the record-breaking Playboy mansion sale were among the topics that bounced around the Bank of America Plaza auditorium at The Real Deal’s first Los Angeles forum, where residential industry leaders came together to discuss the state of the market.
With a massive influx of global capital flowing into L.A., the city has become a luxury destination to rival the likes of New York and London, brokers said. But how much is too much, and how can brokers and developers stay realistic?
“The agents are telling developers what they want to hear and not what the reality is,” said Mauricio Umansky, co-founder of the Agency. Umansky said that when there was such a disconnect between asking prices and what buyers will pay, even a massive sale will end up looking like a defeat.
“When you hear that a $300 million house ends up selling for $100 million, the news is that you sold it for $200 million less,” he said.
“The luxury market is very fickle,” said Ben Bacal of Rodeo Realty, who said buyers want an increasingly demanding list of home features that includes bulletproof windows. “Los Angeles is coming up, but it’s slow.”
Rather than selling the “tangible value” of a property, listings are “selling the sizzle of L.A.,” said Kofi Nartey, who heads Compass’ sports and entertainment division. “We’re seeing a lot of these properties being priced [high] as a marketing strategy.”