“The first 3 months of the year sucked”: Industry pros on LA’s luxury market slowdown
At The Real Deal's residential forum, LA’s top resi brokers and execs discuss the new realities of a shifting market
George Penner, CEO of Deasy Penner Podley, didn’t mince words in his description of Los Angeles’ high-end residential market.
“The first three months of the year sucked,” he said. “It was terrible.”
That slowdown and a wave of discounted re-listings dominated the discussion among Penner and other industry players at The Real Deal’s Los Angeles Residential Showcase and Forum on Friday.
Agents, brokers and executives selling some of the priciest homes in the country assembled at the London West Hollywood for the event. While some property owners have shaved millions off initial asking prices, the group said, others have been loathe to make those cuts despite the sluggish market.
Michael Williamson of Sotheby’s International Realty said sellers are “still in fantasy land,” demanding agents “do everything they want” in terms of marketing and open house events.
“We’re being asked to produce circus acts and big productions,” added Ernie Carswell, a top agent at Douglas Elliman. “That’s not what we’re trained for. It might be fun to throw a party but it’s a sideshow.”
To deal with stubborn sellers, The Property Lab brokerage owner Yvonne Arias told TRD editor-in-chief Stuart Elliott that she will set timelines with clients. If a home doesn’t sell by a certain date at a certain price it gets a haircut.
“For the most part, clients are open to it,” Arias said. “The ones that usually try to strong-arm me are the ones that are jumping around to different brokers.”
But even in the luxury residential game, over-the-top marketing and top-shelf amenities can only do so much to sell a home.
“The greatest amenity of every property is its price,” Carswell said.
Especially in a difficult market, a home can benefit from maximum exposure, the group said. But that has become a bigger challenge with a rise in the number of pocket listings along with online platforms meant to only advertise a property to a select audience.
“There’s so much interest in ‘going off market,’” Carswell added. “It’s the wrong principle. I want to include the industry as much as I can and it’s hard to do that unless you have the power of the MLS.”
Penner said those pocket listings “will be extremely detrimental” to the agents in the room. “We promote it as a marketing tool, but in the end, it’s going to hurt us all.”