Star agents share tips on navigating LA’s tough residential market
Rayni Williams, Jason Oppenheim and Jade Mills talk shop at TRD’s LA Forum
Call 2023 the year when a storm of events lashed the residential market in Los Angeles.
A mismatch of buyer and seller expectations, skyrocketing interest rates and the new Measure ULA transfer tax combined with perennial Los Angeles issues such as high land prices to create one of the toughest markets in memory.
Star agents Rayni Williams of The Beverly Hills Estates, Jade Mills of Coldwell Banker Realty and Jason Oppenheim of The Oppenheim Group talked about how to weather the storm and what is next at the Resi Rainmakers panel at The Real Deal’s LA Real Estate Forum on Sept. 21 at The London West Hollywood hotel.
The agents didn’t negate the headwinds in the market.
“I think we’re not going to turn a corner until the middle of 2024,” Oppenheim said. “In terms of prices, the bottom was six months ago. The bottom in terms of volume is probably right now.”
Williams noted that the adversity may have improved the L.A. market, as the escalating prices of the previous boom were not realistic.
“The way we were climbing, we were looking to have a $500 million to $800 million home in our lifetimes. It was getting astronomical. This is a great adjustment,” she said.
She also called Los Angeles “the most resilient market in the world,” explaining that its triple attractions of mild weather, the entertainment industry and the accessibility of recreation from beaches to mountains continually attracts buyers to the area.
While the ULA transfer tax has stoked controversy, Mills forecast that the market will absorb the shock. She recalled that when she started in the real estate business, interest rates were around 16 percent, but that didn’t stop the deal flow.
One question for the panel addressed what an agent can do with a hard-to-sell house after all the marketing and sales strategies have failed.
Mills had a succinct reply: “Change the staging!” She recommended restaging the house to make it look more livable.
Oppenheim recommended remodeling homes to meet buyer expectations. For example, his agency had a home that could fetch about $2.1 million to $2.2 million on the market, but a five-figure investment in asbestos removal, paint, sod and a few other fixes yielded offers for more than $3 million.
Williams noted that major life transitions still motivate people to buy or sell homes, regardless of market conditions. Mills added that now is the time to try new technologies or low-cost marketing techniques, such as social media.
When discussion turned to the state of the brokerage business, Mills — who works at a large outfit — and Wililams and Oppenheim — who started their own boutique shops — agreed that every agent has to find a situation that feels comfortable.
Oppenheim expressed the hope that commission splits between agents and brokerages would return to the historical 70-30 percent break. He called the 80-20 split offered by some current brokerages “unsustainable,” because the firms can’t afford to provide the services that agents need. He cited service cutbacks and falling stock prices at major brokerages as consequences.
Oppenheim also is famous for starring on Netflix reality shows such as “Selling Sunset.” He was asked how the shows have helped his company’s bottom line. He declined to answer about the return on investment, citing the difficulty of putting a number on finding business leads, but he said the shows have put him in contact with agents who later staffed Oppenheim Group’s Orange County and San Diego offices.
Williams discussed the Hollywood Hills spec house that she and husband Branden Williams developed and plan to list for $38 million. The house comes with a fake mountain lion that Williams said was based on her husband’s interest in P-22, the L.A. County big cat that died last year.