A lot has changed since the last season of Million Dollar Listing Los Angeles was filmed. A pandemic rocked the country and the LA luxury market has become more competitive than ever as affluent buyers started looking for homes with more space and amenities.
David Parnes, the top Agency broker who stars on the show alongside partner James Harris, said that the coronavirus outbreak has pushed many homebuyers to see LA in a whole new way, and unlike other major cities, turn to it as a place where they can stay socially distanced for the foreseeable future. Harris will have a podcast, titled “Positively Chaotic with James Harris” in which he interviews celebrity guests about defining moments in their lives, premiere on August 25.
“It’s not about having a bath full of Cristal or the biggest movie theater you’ve ever seen,” Parnes told Inman. “Right now, luxury is about giving people the most comfort in the world we live in currentyl. It’s the gym. It’s the spa. It’s the pool and the outdoor space.”
We caught up with Parnes about luxury and how the pandemic could permanently alter what it means.
Inman News: How do you define luxury right now? Has it changed during the pandemic?
DP: For me, the word luxury means catering to a circumstance and really going above and beyond. Luxury is comfort. It is being able to cater to the wants and the needs of people in this particular circumstance.
It’s not about having a bath full of Cristal or the biggest movie theater you’ve ever seen. Right now, luxury is about giving people the most comfort in the world we live in right now. It’s the gym. It’s the spa. It’s the pool and the outdoor space. The separation within a house but, at the same time, the ability to come together and congregate.
IN: Do you see your role as trying to provide and accommodate for that?
DP: Absolutely. I work alongside a lot of developers and I get a lot of input. It is extremely important to incorporate that into the product, especially right now because inventory is so low and demand is so high. We want to make sure that buyers are able to buy what they want rather than buy a house and have to change it up.
IN: So what kind of homes should developers be building right now?
DP: The key is ample outdoor space and a good location. People want things that help them function. The big difference now is that people want to see a very good home office with a degree of separation from the other rooms in the house.
Open floor plans are incredible and will continue to provide a great lifestyle, but I think people still want some more compartmentalization because the whole family is in the house all the time now. It’s nice for people to have that separation.
Wellness plays a big part as well. The best wellness system, a spa, air purification systems in the houses — it’s important for the mind that people can stay physically fit and physically healthy.
IN: What is happening in the LA luxury space this August? How is it different from the start of the summer?
DP: Over the last month, there has been a real surge in buyers and demand. We’ve seen multiple offers, bidding wars, huge demand, especially for the $10 million and below market. We’re seeing that there’s very little inventory, because everything’s been sold. And when something good does come up, it typically has more than five offers on it.
During COVID, I think that Los Angeles has been such an amazing place to live because a) we have the weather and b) it’s less vertical than other cities. There are many more houses and house buyers in Los Angeles than in New York or Miami or other major cities around the world.
I think that the environment post-COVID in Los Angeles is very attractive and I think the buyers really appreciate it and see the value there.
IN: Why is demand so high for the $10M and below in particular?
DP: It all goes back to the city and how people are viewing the Los Angeles real estate market. A few years ago, people would be spending $50, $40, $30 million on a penthouse in Manhattan. To put that into Los Angeles, you’re getting way more land and a big house at the best address.
And I think even the super wealthy are seeing the value there relative to other cities. It’s the same principle at a different echelon of the market.
IN: Most now see that the pandemic is not going away and could permanently alter the real estate landscape. Do you agree?
DP: Exactly. At the beginning people thought, “Okay, we’ll get through this for a few months and it will go back to normal.” But I believe that this could be an ongoing situation for years to come and people are going to adapt their lifestyle accordingly.
Los Angeles real estate really caters for that. It will definitely have an influence on people’s decisions. We’ve seen people from around the country and around the world buy real estate in batches for just that reason.