Rising inflation and historic interest rate hikes have combined to do what the pandemic couldn’t: cool off the red-hot Los Angeles residential market, where news of nine-figure spec megamansions set the tone amid steadily rising volume and prices in recent years.
That market heat was the backdrop as Los Angeles’ top 20 residential real estate brokers combined bought in over $10 billion in business on the buyer and seller sides throughout Los Angeles between April 2021 and April 2022, according to the most recent data analysis by The Real Deal. Off-market deals were not included; the research was based on deals registered with the Multiple Listing Service in L.A. County.
Topping the 2022 list is the Aaron Kirman Group at Compass. Aaron Kirman, the founder and the namesake of his realty, said he has made more than $9 billion in sales personally and $15 billion credited to his team over the course of his career. The past year has marked some record sales of properties that made headlines across the globe.
He was one of the listing agents for the March sale of controversial mega mansion The One. The $141 million price tag for the mansion holds the record for the highest amount paid for a residential property at auction in U.S. history. The sale was approved in a dramatic court hearing in April when the spec house’s developer, Nile Niami, made a last ditch effort to halt the deal.
Lightning struck twice for auction sales. In May, Kirman served as a listing agent for the auction sale of another over-the-top mega-mansion. This one was 777 Sarbonne Rd., which sold for $45.76 million when the auction gavel came down.
The roller coaster ride of auction sales gave Kirman a lot to talk about.
“I’m ready to go back to my day job,” Kirman said. “The bread and butter of my business is selling houses on a non-auction platform, and we have a lot of those to sell now.”
He conceded that business is changing.
“Stocks are getting volatile––the crypto market started getting volatile,”Kirman said. “While our numbers are still good, we are foreseeing a more volatile real estate future. I’m forecasting a more turbulent six months to a year.”
Sally Forster Jones of Sally Forster Jones Group, affiliated with Compass, ranked as number 12 on the ranking list. She also said that the past couple of weeks have thrown the market into uncertainty and seem to mark a change.
“2021 was an amazing year––there were continual record sales,” Jones said. “Right at this moment with the stock market dropping and interest rates increasing, buyers and sellers are uncertain as to what direction to take.”
Also at the top of the ranking was Williams & Williams at The Beverly Hills Estates. The
husband-and-wife team of Branden and Rayni Williams also worked on high profile deals, including the auction sales as The One and 777 Sarbonne Rd. The Williamses added listings for a number of deals with A-list celebrities, including hip hop star Drake’s sale of his Yolo estate for a combined $22.2 million in March. They represented pop star Robbie Williams–no relation– for a $49.5 million closing for a mansion in Holmby Hills.
Branden Williams said the market is changing and the best agents will roll with the punches.
“You’re going to have more hesitant buyers with interest rates increasing,” he said. “If you really look at these markets, they become buyers’ markets and some people make their best moves.”
Stuart Vetterick of Hilton & Hyland also worked on The One deal, where he co-represented the buyer. He ranked 17th on TRD’s list and said while the wealthy are concerned with interest rates, many of his moneyed clients are more concerned about California’s high taxes on the wealthy.
While many of them make their primary residences in a low-tax state, they will concede that there are a limited number of places that can compare with the Southern California coast. Wealth buyers will continue to want either a primary or a vacation home in Los Angeles and coastal areas around the city, where quality of life sells itself, Vetterick said.
“Los Angeles and the Southern California coast has been and remains the best climate and one of the best places to live,” he said. “If you look at gateway cities around the world, Los Angeles has one of the cheapest prices per-square- foot,” he said.
Despite the economy going through turbulence, benchmarks for the most basic factors in Los Angeles’ real estate market won’t budge, Vetterick said.
“The fact of the matter is that there are only so many houses available in the most desirable areas, and they only come up for sale every so often,” he said. “You’re literally trying to get that rare gem for high-net-worth clients before anyone else can get to it. So demand for these houses will always remain high, irrespective of economic conditions.”
Tami Pardee of Pardee Properties, who ranked fourth on the list, sounded a confident note for the market going forward–although it was ground in favorable geography for her business, which focuses on the oceanfront community of Venice and surrounding areas.
“Supply has always been notoriously low,” she said. “But in my opinion, it is a safe area to invest in because of the lack of inventory.”
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