Hollywood’s High-Flying Luxury Real Estate Brokers Find Themselves Grounded
April 21, 2020
With new listings in L.A. down almost 30 percent and a recent ban on in-person showings, the city’s top real estate agents have few tools left to ply their craft. But don’t expect that to slow down the most restless of the bunch, who are turning to Instagram to get them through the pandemic.
She’s designed a yacht for Johnny Depp, more than a dozen homes across the globe for Nicolas Cage and a $30 million condo for Matthew Perry, but for interior designer LM Pagano, the project she keeps circling back to these days is the luxury bunker she designed for a billionaire client in 2015. “It was the biggest and most luxurious private bunker in the world,” says Pagano, who can’t disclose what city it was in, much less the name of the client, other than to say that he was an American businessman living in the Midwest. “The guys who worked on it also helped build the bunker at Camp David and they’d never seen anything like it — it was crazy,” she says.
But the three-year project unnerved her. “It was a little depressing. The idea that someone who could afford to build this kind of bunker actually did made me think, ‘What do they know that I don’t?’” So, she and her husband promptly set out to retrofit the house they’d recently purchased in L.A.’s Topanga Canyon area. They put in a state-of-the-art solar and security system, a generator that toggles between several power sources, planted 40 fruit trees on the property’s six-acres, and installed a water-filtration system. “It’s just short of being totally off-the-grid,” says Pagano, who, as it turns out, put the home in Topanga’s Tuna Canyon neighborhood up for sale just as the worst global pandemic in more than a century was starting to unfold.
Against the backdrop of the novel coronavirus crisis, Pagano and her brokers are letting the Topanga Canyon listing ride, hoping the serendipity of the cubist-styled home’s off-the-grid amenities can out-trump the state of limbo that L.A.’s real estate market currently finds itself in. But the prospect of actually selling a house is getting more remote by the day. Just this week, L.A. Mayor Eric Garcetti banned all in-person home showings, closing yet another loophole that a shrinking number of sellers and their agents were relying on to try and move what little inventory that is still out there.
“We launched the first week of March, when there was no talk of quarantines,” says Compass’ Greg Holcomb, who has the $4.5 million listing with Cassandra Petersen. “But then everything started changing after we were on for a week. We had a lot of momentum from the launch and it seemed short-sighted to take it off, especially because the house has features that might be interesting to people at a time like this.”
The industry is bracing itself for the newest market data, which will at best show a market that’s frozen if not totally spiraling. Anecdotally, agents say that deals are falling apart, buyers are backing out and sellers are cutting prices. According to the most recent data provided by Zillow, new listings in the L.A. metro area are down 28 percent compared to this time last year, and they dropped 49 percent year-over-year from April 1 to March 5. While disconcerting, it hasn’t fully stopped a swath of L.A.’s luxury brokers who either out of sheer will — or denial —are trying to go about their business with their hands tied behind their backs.
“I’m negotiating a couple large deals right now,” says Hilton & Hyland’s Branden Williams, who, along with his wife, Rayni, make up the Williams & Williams team, which clears well over nine figures in sales volume every year. “We closed on an $8.5 million home and a $3.5 million home this week. A couple deals did fall out — but I think we’re going to get through this because L.A. is king. More people are going to move here when this is over with,” he says.
Up until this week, agents had been working under the Department of Homeland Security edict that deemed “real estate services” to be part of the nation’s “critical infrastructure,” effectively designating the industry as essential business. That prompted the California Association of Realtors (CAR) to issue an advisory halting all open houses but allowing for virtual tours. CAR also did not explicitly prohibit in-person viewing appointments as long as social distancing measures were respected and only one person entered a listing at a time.
“Private showings are definitely happening,” said Williams, a few days before the new order from Garcetti went into effect. But even during the lead up to the mayor’s new ban, some were wary of the ethical implications of showing a listing while everyone was supposed to be sheltering at home. “On the one hand, you have people saying, ‘Let’s focus on the future and be productive,’ and on the other, people saying that showing a house right now is incredibly crass,” says Holcomb. “We have a duty to our client, but we also have a duty to the community and to our families. I see both sides,” he says.
In the meantime, agents are leaning heavily on virtual showings. The Agency’s Mauricio Umansky says he has gone into escrow on two listings after relying entirely on virtual tours.
Others are turning to social media channels. The Williamses, along with Compass’ Tomer Fridman and real estate marketing firm the Society Group, are hosting an unscripted streaming show on Instagram Live where they discuss their listings and market insights.
Others top agents are wary. “I don’t think people are going to sell a house through a virtual tour. Who is going to buy a home without seeing it,” says Douglas Elliman’s Mark Kitching, who says he is managing the anxieties of his sellers and trying to keep the listings he has in escrow from falling out. “I don’t think it’s a huge deal to take a pause and reset. We can all get back on the horse and keep hustling when this is over,” he says. “People are currently stuck in their houses and they’re going to find out really quick if they love it. That reason alone could cause the market to surge when we get through this.”