LA resi leaders predict “pent up demand” post-coronavirus

Brokers characterize pandemic as temporary setback

The world’s economy may tumble into a recession due to coronavirus, but some top Los Angeles real estate brokers are striking a note of optimism.

“I really think there’s going to be pent up demand. I wouldn’t be surprised if we see our best third quarter in many years,” said Jason Oppenheim of the Oppenheim Group, who added business could return to normal within six weeks.

“We don’t necessarily have lost revenue, we have deferred revenue,” asserted Mauricio Umansky, co-founder of The Agency.

“Viruses have a beginning, a middle, and an end. We’re going to move on,” noted Peter Hernandez, Douglas Elliman’s West Coast region president.

The trio spoke with The Real Deal’s Hiten Samtani as part of a live series of webinars in which TRD discusses the coronavirus crisis with industry pros and examines what comes next.

The brokers acknowledged problems, namely whether home showings are either legal or advisable right now in L.A., and that some inexperienced agents need guidance in this unprecedented moment. But they each professed their individual businesses and the overall market to be sound.

“Deals in escrow are closing,” noted Mauricio Umansky of the Beverly Hills-headquartered The Agency, offering an example of the market’s relatively strong fundamentals. “We have not seen a fallout of existing deals.”

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Part of the positivity stems from a first-quarter that started on a tear with record-setting deals and an overall demand for residential real estate in a city with a notorious housing shortage.

Umansky claimed that The Agency was on pace to eclipse their 2019 sales volume prior to the coronavirus prompting shelter in place orders from California Gov. Gavin Newsom and Los Angeles Mayor Eric Garcetti, edicts that have cancelled open houses and thrown private showings into limbo.

The Agency founder asserted that home showings were down 48 percent nationwide during the week of March 12 compared to the first week of 2020, a decline that preceded state and city orders that non-essential businesses close.

Oppenheim, founder of his West Hollywood-based luxury boutique, posed the question of whether brokerages are essential and can do more than just virtual tours and docusigns.

“We’re still doing showings and selling properties,” the broker said. Oppenheim said that while such activity is limited, his brokerage holds a fiduciary duty to clients, and also any sale north of $1 million effectively requires “person-to-person” interaction that no technology can
substitute for.

Hernandez said that Douglas Elliman has a “moral responsibility” to figure out “how to get business done without spreading the disease.” He has been constantly interacting with agents on Zoom, the video platform by the eponymous San Francisco company whose stock price has climbed 30 percent in the past month.

Hernandez said that while some of his agents seem unruffled by the coronavirus outbreak, less experienced dealmakers are “deer in the headlights.”

The brokers, though, largely stayed on message that the coronavirus is a temporary setback. “Americans have very short-term memories for better or worse,” Oppenheim said. “This will end.”