Luxury Real Estate Forecast: Emma Hernan, renowned for her appearances on Netflix’s “Selling Sunset,” isn’t just a familiar face selling high-end Los Angeles real estate. As a self-made multimillionaire, entrepreneur, and former model, her success story spans from savvy investments in stocks and startups to navigating the cutthroat world of luxury properties.
Her journey began in 2017 with the purchase of her own home, swiftly followed by joining the Oppenheim Group in 2018. Her knack for sealing multimillion-dollar deals for celebrities led her to prominence. However, 2023 posed challenges, notably the city’s introduction of a mansion tax, impacting high-value property transactions.
Despite these hurdles, Hernan’s entrepreneurial spirit remains unwavering. Managing a Boston-based vegan food company alongside her real estate ventures has bolstered her network, connecting her with potential luxury homebuyers among CEOs and executives.
The mansion tax, a significant setback, levies between 4% to 5.5% on properties exceeding $5 million. Describing it as a “nightmare,” Hernan highlights its adverse effects on agents and developers, dissuading investment in high-value properties for lucrative flips.
While introduced to fund affordable housing initiatives, this tax exacerbates L.A.’s already pricey market. A median-priced home stands at $1.3 million, thrice the national median, intensifying concerns about the tax’s impact on property valuations and sales.
Navigating this terrain, Hernan now counsels clients on tax implications before selling, emphasizing the need to account for these additional costs during negotiations. The tax’s ripple effect poses challenges for buyers, sellers, and agents alike, reshaping strategies and impacting market dynamics.
However, amid these challenges, Hernan forecasts a potential buyer’s “sweet spot” in 2024. Declining mortgage rates, dropping from a peak of 8% to approximately 6.6%, present opportunities for buyers outside the mansion tax bracket to secure favorable deals. Her advice to clients emphasizes the significance of locking in a favorable mortgage rate while acknowledging the limited inventory.
Anticipating a resurgence in buyer interest, Hernan sees a promising year ahead, intending to expand her investment property portfolio. Yet, looming changes in real estate commission structures cast uncertainty on industry practices, reminiscent of the recent mansion tax upheaval.
The $1.8 billion verdict challenging inflated home-sale commissions could reshape realtors’ earnings. With implications for sellers and potential impacts on homebuyers, this uncertainty marks another potential shift in the real estate landscape.
As Hernan prepares for 2024, uncertainty looms over the industry’s future, emphasizing the need for thoughtful considerations amidst an evolving market landscape.
ImpactWealth.org remains committed to unraveling the nuances of this ever-changing real estate climate, guiding investors and stakeholders through transformative times.
