Last year was a good one for the Los Angeles luxury market, as the median sales price of single-family homes increased by 37% in Beverly Hills and 12% in Bel Air and Holmby Hills, reports Katy McLaughlin of The Wall Street Journal.
Moreover, Josh Flagg, executive sales director at Rodeo Realty, sold three houses on behalf of clients last year—twice. In each instance, he sold the homes the second time for roughly $1 million more than the first time—even though no or few improvements were made to the properties, according to Mr. Flagg.
There are several reasons why the sales and quick resales took place, experts says. Zillow chief economist Svenja Gudell suspects the properties were marketed to developers, who will either fully renovate or raze and rebuild the homes at an even greater profit. “We see in the public record that some of these are trusts that sold to [limited-liability corporations],” Ms. Gudell says. “That can mean families selling to developers. Developers are often more focused on timing and getting the exact property they want, which can make them less sensitive to price.”