Los Angeles’ luxury market is currently flooded with fierce competition – and the number of multimillion-dollar homes in the city just keeps growing.
In fact, there are 50 high-end spec houses that are currently being developed in the city. Upon completion, they are expected to cost anywhere from $35.5 million to $500 million, according to Business Insider’s Hillary Hoffower.
But many of these luxury homes aren’t selling. And while creative strategies like $100,000 open-house parties and Hollywood-style movie trailers are being used to draw in prospective buyers on some mega-mansions, marketing isn’t always the issue.
Real-estate agent Jade Mills, who has sold more than $5 billion of real estate in her career and is currently the No. 1 real-estate agent in Beverly Hills, recently told Business Insider that one factor, in particular, is likely to push buyers away: a need for renovations.
According to Mills, prospective buyers looking in the $5 million to $10 million range want a house that doesn’t require major work. She told Business Insider that despite the soft market, when she lists a home that is move-in ready and reasonably priced, it sells quickly.
Mills, who was ranked No. 6 on Real Trends’ 2019 list of top US real estate professionals by sales volume, said that the best way to secure a buyer in the current market is to make them feel like they can “just move right in.”
“Last year we could sell something that needed everything or was totally done,” she said. “This year, if it needs everything, people are shying away from that.”
While renovations can be expensive, Mills points out that the process of renovating also takes time. Plans and permits need to be approved and acquired before new buyers can begin renovating their homes. Buyers will often paint or redesign, but that’s as far as they’ll go, Mills explained.
“They do not want to do a lot of work, like making room additions or doing things structurally,” Mills said.
As Business Insider previously reported, there is a host of other factors that can also make a house difficult to sell, like a lack of natural light, bad odors, poor architecture, and outdated decor.