L.A. gold rush
Most days in Los Angeles, it’s hard to throw a stick without hitting a reality show alumna, an investment banker who followed his midlife crisis west or a real estate agent. But on Tuesdays, you won’t find the latter at the gym or a power lunch. They’re “on caravan,” a weekly ritual that has become more frenzied as home prices spiral upward and scarce inventory makes otherwise sane people beg to pay more for a place to live than their parents probably earned in a lifetime. Every Tuesday from 11 a.m. to 2 p.m., residential real estate agents roam from city streets to wooded canyons to the beach in search of properties to sell to buyers whose lust for a new home seems to grow more intense every day that interest rates remain low.
Caravan day is a time to beat the competition to a good deal, to trade gossip, to spread rumors, network and brag. It used to be attended by professionals only, but brokers who have learned that the race is won by the swift sometimes bring clients along now. Better to caravan with a potential buyer than to bring him or her back to a house the next day only to find it sold.
The Tuesday before last, Nancy Gerber and a client, a recently divorced woman with two young children, visited 13 open houses on caravan day, traveling from the Hollywood Hills to Bel-Air. Gerber, who works out of Coldwell Banker’s Studio City office, hired a Town Car and driver. “I’d never done that before,” she says, “but for 42 bucks an hour, plus a tip, you know, it gave me time to focus on my client and not on where I was going. It was nice.”
One week later, Gerber begins planning her strategy on Monday morning, when the Caravan Express, a 200-plus-page black-and-white guide to Southern California’s 21st century gold rush, arrives at her office. She chooses open houses with several clients in mind. There’s a fashion designer who wants to buy a house for under $500,000 as income property and a Canadian actor and his wife who are moving here because he’s been cast in a TV series. The couple liked Gerber’s only remaining listing, a $1.7-million hacienda in the Hollywood Hills, but they don’t want to spend more than $1.2 million. Gerber thinks a family man now living up in the hills who complained to her about not having a yard where his children and dogs can play could become a client if she finds him the right home under $2 million.
Ordinarily, she tours four to six houses on caravan day, but there are a lot of new listings that could be worth looking at in the central and east San Fernando Valley. “Sometimes I’ll just caravan in West Hollywood,” she says. “Sometimes I just do Hancock Park. I like to mix it up. There’s tons to see in the Valley today.” She targets 16 houses in Sherman Oaks and Studio City, an admittedly ambitious itinerary, highlights destinations on photocopied pages of the Thomas Guide and climbs into her black Range Rover, armed with a cellphone, trail mix, apples and bottles of water.
Gerber got her real estate license four years ago, so she hasn’t known a time when the market wasn’t sizzling. “Caravan is one of my funnest days,” she says, “because I love looking at houses. That’s one reason I went into real estate. I used to make my husband crazy because I’d spend every Sunday going to open houses, and we weren’t even looking to buy a house. So he said, ‘Would you just go get your license and make money doing this?’ ” She did and she has, in the low six figures every year.
When Gerber strides up to a house, she’ll sometimes swing her narrow hips, unconsciously falling into the runway walk she mastered while modeling in Europe 20 years ago, just out of Marin County’s Sir Francis Drake High School. Tall and curvy, she has long, dark hair, large green eyes and the symmetrical features of a beauty queen. An occasional malapropism or Valleygirlism creeps into her speech, and she’s acquired the occupational habit of dropping zeroes -- a $900,000 property costs “nine hundred.” She tempers accessibility with enough hauteur to avoid seeming unctuous. “I’m really good at meeting people for the first time. It’s an either-you-have-it-or-you-don’t kind of thing.”
Drawing on emotion
The first stop is an undistinguished traditional that’s been given new landscaping and a slick interior makeover. A sign on the front door instructs visitors to remove their shoes, so the ebonized wood floor won’t get scratched. It is what brokers call an “emotional” house, all mood and romance, and Gerber is initially seduced. “I’d give it a star,” she says. At $1,650,000, she considers the property overpriced, but the listing agent acts as if she’s the mother of the last virgin in the kingdom the day Prince Charming announces he’s ready to take a bride. It will be open Sunday, she tells Gerber, but will probably be sold by then.
Of the dozen homes Gerber will actually get to this day, half are scruffy ducklings transformed into some degree of swanhood. The narrow streets that curve up and over the hills of Sherman Oaks south of Ventura Boulevard are crowded with construction vehicles. “Everyone’s redoing their houses,” Gerber explains. “They’re taking the equity out of their homes and making them nicer, or buying houses, fixing them up, then putting them back on the market. Sellers are speeding up because they don’t want to miss out on the low rates. I have investor buyers looking for flippers. I like working the high end of the market, but I have a client looking at properties between $350 and $750, and he’s going to buy five houses, so he’s a good client. And he’ll resell all those houses. Yesterday I did a computer search of what’s open for caravan and found only seven listings in the Valley between $300 and $500. I found 48 between $500 and $2 million. There’s more inventory to choose from in the higher end. Everything has appreciated, so it’s all nudging up. There isn’t any low end. I feel for first-time buyers.”
At the second house, Gerber runs into an agent whose listing she’d shown to a client. “Did you sell that house?” she asks. He did.
“What did you get for it?”
“Pretty close to asking, $1.8.”
“Good for you,” she says. “I’m glad you got your price. My client just didn’t want to go that high.”
The good news about homes quickly sold for asking price or more gets widely broadcast. Aberrations are less frequently discussed, like the owners who will sell only to buyers who’ll agree to rent them their just-purchased homes for as long as three months while they survey the market and hope prices will start to slide.
The third house looks as if it once sheltered a less fortunate Brady Bunch, and Gerber wonders why she had put it on her list. But she rationalizes that it’s always a smart idea to see what’s available in neighborhoods where she likes to work. “It’s all good” is one of her favorite sayings.
The next house is around the corner from her own, and she’s kicking herself for not getting the listing. But the agent who has it is hardworking and very experienced. “I should have been farming my neighborhood better,” Gerber says, “but I like him. If I was going to lose it, I don’t mind losing it to him. Competition is healthy. It keeps you strong. There’s enough business out there that if you’re good, you’ll find it. If I don’t get a listing it’s not the end of the world.” Inside the three-bedroom home with a view beyond a paramecium-shaped pool, she greets the listing agent with a hug.
Outside the next house, an agent trainee makes eye contact with Gerber, introduces himself and shakes her hand. He used to be in corporate accounting, he tells her, but decided on a career switch. Back in the car, she says, “There are so many new agents, you can’t imagine. Anyone who has any kind of job in sales wants to sell real estate now because they think it’s easy money. My best friend just got her license. She was a wine rep, so she knows how to work with people. Another friend who was working in the garment industry just got her license as well. You can have a good career without having to go to school for years. Sometimes it’s really easy, and you make great money. Sometimes you work really hard, and you make good money. Sometimes you work really hard, and it doesn’t pay off as well. They’ll find out.”
With one hand on the steering wheel and the other on her cellphone, Gerber dials the divorced mother she caravaned with last Tuesday. She’s just received a text message that her bid over the asking price of a pretty Colonial in Hancock Park was accepted. “Start making cosmos,” she tells the client. “You got the house!”
Finding a jewel
With five houses down, it’s 12:30 and Gerber still hasn’t seen anything as nice as the traditional, whose charm has diminished as she considers its flaws -- a steep price, even in this market, sleek finishes that could soon look dated and clashing interior and exterior styles. She parks on the wrong side of the street at the next stop. Either a lot of agents thought a remodeled four-bedroom cottage priced at $1.2 million was worth seeing or the few who showed up had healthy appetites, because when Gerber tours the country kitchen, some lettuce leaves are all that remain of the lunch provided by the listing agent.
The view of the Valley from the next house probably looks better after dark, when it’s a panorama of twinkling lights. On this afternoon, the home’s most interesting feature is the turkey rollups and sweets laid out on trays in the empty family room. The listing agent is eager to gossip, and Gerber takes the time to be gracious while nibbling. She doesn’t boast about having made her biggest sale ever this month, a $4.5-million estate in Hancock Park.
So many agents crowd the next house, a 15-year-old Mediterranean starter mansion, that you’d expect to find a margarita fountain in the backyard. In fact, the faux villa has it all -- the French doors, walk-in closets and fireplaces that most buyers want and an asking price of $1,795,000. A 2,600-square-foot Spanish in Santa Monica that Gerber had on the market for four days sold for $1.9 million last month, so she knows this home, nearly twice the size, is a steal. The family man she met at her open house last weekend wants five bedrooms. Check. “Great colors. Very bright,” she tells the listing agent. “I’ll definitely show this ASAP.” No offers have been made yet, he reports, but he’s “presenting” Thursday night. “That’s how it goes these days,” Gerber says, back in the car. “He makes a date to present offers to the owners before the house is even open for caravan day, because he just assumes there’ll be offers.”
With little time left until the doors close at 2, Gerber drives northeast to Valley Village, a neighborhood described as “Studio City adjacent.” Two weeks ago she sold a Santa Monica townhouse to Janis Hoffman’s clients and promised the agent she’d stop by the tidy $749,000 home Hoffman’s showing now. It isn’t hard to remember when Valley Village houses were priced between $300,000 and $500,000. Now they’re selling from $700,000 to $1.3 million. “People are saying, ‘Aha! This is where prices will level off,’ ” Gerber says. “But no one knows.”
Hoffman, like everyone else who’s trying to read the tea leaves, has heard the rumors about more interest rate increases. “Everybody knows the rates can’t stay this way forever, but you just don’t know. If they go up a half a point or a point, that makes a difference in your mortgage payment, especially for a house over $700,000. Then people about to buy a house think, ‘Can I do this? Well, I can, but I won’t have cable.’ ”
Back in Studio City, one look from the curb convinces Gerber that the next house isn’t worth getting out of the car to see. She takes a call from the owner of her only listing, the Spanish in the Hollywood Hills that’s been open for three Sundays. “You have to do what you want to do,” she says. “What do you want to do? You want to sell? OK, then let’s sell it. It’s overpriced. We have to reduce it. No, you aren’t going to wind up in a little million-dollar dinky house. I won’t let that happen. Yours will sell at one-million-579. So that’s the new number, OK? Can I put it in for caravan next Tuesday?”
At 2:02 p.m. Gerber walks through the day’s third best find, in a desirable neighborhood of $2-million homes on generous lots. A Connecticut farmhouse filled with fine old wood, stone and tile, it needs some work, but it has character and is well priced at $1,299,000. Its coziness might appeal to the Canadian couple.
Overall, she rates the day’s houses only “so-so,” but then she did learn she’d sold a new home to a client. She has to go back to the office to make a few calls and review some paperwork, but she’ll get home in time to have dinner with her 5-year-old daughter. It’s all good.
