The slowdown in the housing market hasn’t spared the super-rich. From the ritzy suburbs of Beverly Hills to the glitzy Manhattan skyline, luxury real-estate has felt the heat from the broader sector’s weakness.
Particularly with mortgage interest rates double where they were last year and the flow of new listings slowing, ultra-luxury real-estate has taken a hit, Mauricio Umansky, a Los Angeles-based real-estate entrepreneur and TV reality-show personality, told MarketWatch.
“The real-estate market right now is slow. Particularly in the high end, we’re definitely in a housing recession,” Umansky, co-founder and CEO of The Agency, said. Umansky was in New York City, speaking on the sidelines of the launch of his new book on April 11, titled ‘The Dealmaker.’
“We’ve started to see inventory build a little bit, which is good, because once we see inventory build and we see prices drop, we’ll actually start seeing the recovery of the market,” said Umansky, who is probably known to most Americans as the husband of “Real Housewives of Beverly Hills” start Kyle Richards.
Aside from rates rising above 6%, the low number of homes on the market for sale is one of the biggest frustrations faced by buyers today. There were 22.3% fewer new listings on the market this March than last year, Zillow said in a separate report.
In New York City, the real-estate market felt shivers from a gloomy first half of 2023, according to a separate report by Coldwell Banker Warburg, where activity dipped on the back of economic uncertainty.
In the first two months of 2023, at the high end of the market — which refers to homes priced $10 million and above — few listings sold, the report noted.
Umansky, who specializes in selling homes for over $20 million, said that part of the reason his buyers are struggling with few listings is because sellers are unwilling to give up ultra-low mortgage rates they secured during the pandemic.
“Everybody’s scared of the rates. And that’s why you’re seeing a slowdown of transactions,” Umansky said, but “the bigger problem is not only the buyers being scared of the rates, but it’s the sellers that need to sell that are sitting on sub-3% — they’re not ready to sell.”
“‘Everybody’s scared of the rates. And that’s why you’re seeing a slowdown of transactions.’”
And broader regulatory forces at play in Los Angeles complicate the situation for sellers and buyers. Recently, the City of Los Angeles imposed a “mansion tax,” a transfer tax that took effect April 1.
While there’s already a 0.45% base tax rate on property transfers in Los Angeles, the new tax — supported by city voters last fall — adds another 4% on property sales valued above $5 million. It adds a 5.5% tax on properties above $10 million.
The Agency, Umansky’s firm, oversaw a few deals that were spurred into action because of the impending tax. But homes sold moving forward will now cost homeowners in terms of increased taxes.
For the Netflix star and real-estate mogul, where did it all begin? Umansky said that his first residential real-estate purchase was in the very neighborhood he grew up in.
“It was on the same street that I grew up on,” Umansky said, in Bel-Air. Umansky recalled buying the place around the year 2000, and took out a 30-year mortgage for a home that was just under $700,000. He has since sold the home and now owns several properties.
“‘They’re really normal people and they go through the same things that we all go through.’”
For someone who interacts regularly with celebrities and the super-rich, the one thing people don’t realize is that “they’re normal people,” Umsanksy stressed.
“They’re really normal people and they go through the same things that we all go through,” he added, like taking out a 30-year mortgage. “They just happen to have a magnifying glass on them.”
Yet given that the entire world is watching what they’re buying, the scrutiny can get intense, he noted. They do have some extra requirements regular people may not have, such as extra security or being paparazzi-proof, Umansky conceded.
Ultimately, Umansky said that the best piece of advice he received was from his grandfather who told him to be deliberate about how he spent his time and to find balance.
“And he was probably one of the most balanced people I know. And probably one of the most loved,” he added.
Umansky said his grandfather advised him that since there are only 24 hours in a day, spend 8 hours on sleep, 8 hours at work, and the remainder to “play,” whether that is family time or sports or other leisurely activities.
The entrepreneurial spirit runs in Umansky’s family, he said. His grandfather arrived in Mexico with no money, so he turned to boxing rings to win pesos, he shared. “And he would take that money that he would win in the boxing ring, and he would buy textiles or T-shirts or whatever, and then resell them,” Umansky continued.
That led to the start of his grandfather’s now 75-year-old textile business, which is still in operation, helmed by Umansky’s cousin.
— Andrew Keshner contributed to this article.