Sweet memories: Report reveals frothy pre-coronavirus LA resi market

Douglas Elliman Q1 report also shows diminished inventory amid pandemic

TRD LOS ANGELES /
Apr.April 23, 2020 07:00 AM
The Malibu home actress Mindy Kaling purchased in February (Credit: Mike Helfrich)
The Malibu home actress Mindy Kaling purchased in February (Credit: Mike Helfrich)

If Los Angeles real estate agents ever want to reminisce about the good old days, they’ll always have Douglas Elliman’s first quarter report on the downtown and west side residential market.

The market snapshot by Elliman and real estate appraisal firm Miller Samuel finds a record $1.6 million median sales price and a 12.6 percent jump in the number of home sales compared to the first quarter of 2019 in L.A. County’s downtown, Beverly Hills, Bel Air, Brentwood, Century City, Malibu, Santa Monica, Pacific Palisades, and West Hollywood.

There were 1,213 home sales in the area studied, producing a sales volume of $3.1 billion, a nine percent climb from the first quarter of 2019, a moment in time when market observers dinged sellers for overly ambitious pricing.

“It was the culmination of a long stretch where there was more accurate pricing and more realistic expectations from sellers,” said Miller, the president and CEO of Miller Samuel.

But buyer-seller harmony and record sales are now on hold by the Covid-19 pandemic, and the conditions that produced such a robust market may have vanished.

The pandemic and ensuing quarantine orders by Gov. Gavin Newsom and local officials “really didn’t affect our first quarter report very much,” said Stephen Kotler, the western region chief executive of New York-headquartered Elliman.

Where the coronavirus toll was indicated, Kotler explained, was a “listing inventory that dropped dramatically in the middle of March.”

The 2,328 homes on the market in the neighborhoods analyzed dropped 17 percent compared to first quarter 2019, which Kotler attributed to sellers either pulling homes off the Multiple Listings Service or not listing during the last two weeks of March. Newsom demanded the effective closure of several industries on March 15, and issued a stay at home order for all California residents on March 19.

How long the inventory freefall will continue remains to be seen.

Open-houses and even most private showings are still banned in L.A. County, relegating viewings to a seller waving a laptop screen around their home.

Miller said he was optimistic current market conditions will create pent-up demand from both buyers and sellers, comparing the current chilled market to the 2008 economic shutdown. “By February or March 2009, you did have home sales recovering and crowded open houses,” Miller said.

However, the market conditions that created a meeting of the minds between buyer and seller might be gone. Already, there are stories of buyers hunting for a bargain but encountering sellers with cold feet. “I don’t think sellers are going to immediately capitulate, and you’re going to have that widened gap again,” Miller said.

There’s also the question of who will have the money to buy a home in the upcoming months, though Kotler downplayed such concerns.

“We are seeing that the stock market has rebounded, helping buyers’ portfolios,” the broker said, predicting that financing would be available for new home sales.


Related Articles

arrow_forward_ios
Lauren Sanchez and Jeff Bezos with the property at 1441 Angelo Drive (Credit: Getty Images and Redfin)

A $90 million patch of dirt: A look at Jeff Bezos’ other record LA deal this week

A $90 million patch of dirt: A look at Jeff Bezos’ other record LA deal this week
Hiten Samtani, Sally Forster Jones, Santiago Arana, and Aaron Kirman

For top LA resi agents, it’s strictly posi vibes

For top LA resi agents, it’s strictly posi vibes
Travis Kalanick (Credit: Justin Sullivan/Getty Images)

Travis Kalanick behind $43M Bel Air purchase

Travis Kalanick behind $43M Bel Air purchase
Kofi Nartey (Credit: Rachel Murray/Getty Images)

Side Deal: Kofi Nartey bolts Compass for VC-backed rival

Side Deal: Kofi Nartey bolts Compass for VC-backed rival
Jeff Bezos and the Enchanted Hill property (Credit: Arif Hudaverdi Yaman/Anadolu Agency via Getty Images)

Jeff Bezos pulls out of $90M deal for Beverly Crest’s “Enchanted Hill” property

Jeff Bezos pulls out of $90M deal for Beverly Crest’s “Enchanted Hill” property
From left: Jason Oppenheim, Mauricio Umansky, and Peter Hernandez

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

LA resi leaders predict “pent up demand” post-coronavirus
Spencer Krull, Side’s new Southern California managing broker

Westside’s Spencer Krull jumps to Side as firm’s first SoCal managing broker

Westside’s Spencer Krull jumps to Side as firm’s first SoCal managing broker
Kathryn Bigelow and the home (Credit: Trisha Leeper/FilmMagic/Getty Images, and Coldwell Banker)

The Hurt Valuation: Kathryn Bigelow slashes price on Beverly Hills home

The Hurt Valuation: Kathryn Bigelow slashes price on Beverly Hills home
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...