\
Navigating Challenges: The Future of Luxury Real Estate in LA"
Top agents in LA's luxury residential market discussed their strategies for dealing with current headwinds during a panel discussion at The Real Deal's LA Real Estate Forum at the Beverly Wilshire. The event was titled "Pushing Luxury Limits."
The panelists addressed several key issues, including new rules stemming from the Sitzer-Burnett class action settlement in Missouri federal court. The National Association of Realtors rules, which went into effect on August 17, require buyers to sign a representation agreement before being shown a property and prohibit buyer commission information on the Multiple Listing Service.
Aaron Kirman, CEO of Christie's International Real Estate Southern California, shared his observations on both the buy and sell side since August 17. He noted that sellers now believe they don't have to pay commission, while buyers are more willing to sign representation forms as long as they believe the seller is paying for commission.
Other panelists emphasized the importance of education in the industry, particularly in conveying the work involved in selling and buying a house to clients. Sally Forster Jones of Compass' Jones Fridman International & Associates highlighted the need to articulate one's value as a buyer's agent.
The panel also discussed Measure ULA, a ballot measure instituting a transfer tax on commercial and residential deals within the city of Los Angeles. The tax was approved by voters last year and currently applies a 4% tax on transactions of $5.15 million and a 5.5% tax on those of $10.3 million or more. The panelists underscored how misleading the term "mansion tax" is in getting the public to understand the implications of the tax.
Despite the challenges, brokers in the luxury space are dealing with different client dynamics. High interest rates have less impact on residential sales for many high-net-worth clients compared to stock market sentiment. Aaron Kirman emphasized the importance of focusing on who is actively buying at the moment, noting that about 80% of Christie's International Real Estate Southern California's clients buying properties worth $25 million or more have come from China, Taiwan, Singapore, and other Asian countries.
In summary, brokers are adapting to the changing landscape of LA's luxury residential market by navigating current headwinds and closing deals. Despite the challenges, they continue to focus on their clients' needs and preferences, while also advocating for a more nuanced conversation about Measure ULA's impact on development and housing availability.
