The housing market in Los Angeles is definitely in a different league. Properties of tens or even hundreds of millions of dollars are traded daily, and those who manage to stand out in this highly competitive environment are, no doubt, successful people.
This category also includes Jason Oppenheim (Oppenheim Group) – one of the most well-known brokers and the main character of Netflix’s Selling Sunset reality show, as well as Alex Becheru – the founder of White Glove Estates, a company that deals with the renovation and design of luxury properties, many of them part of the Oppenheim Group’s portfolio.
Jason Oppenheim and the Romanian Alex Becheru spoke with Financial Intelligence about the exclusivist real estate market in the USA. They also sent VIDEO messages for the Financial Intelligence Gala on December 8th.
There’s not much to say about Jason and his Selling Sunset agents, because within a simple Google search, dozens of news stories pop out. What the world doesn’t know, though, is that many of the show’s characters have been friends for over 20 years, as is the case with Alex, who, although he doesn’t appear in the show, has been with Jason since their student years, when they were also roommates, because none of them was financially stable enough to afford a decent rent on their own. Their success began after they returned from a trip around the world, happy but “broke”, at which point they decided it was time to really take life into their own hands. From then until nowadays they have grown both personally and professionally, working together and contributing to each other’s success. In addition, Alex’s wife and co-founder of White Glove Estates – Alice Kwan, is also an agent for the Oppenheim Group but prefers the discretion behind the cameras.
Another thing that people don’t know is that Alex Becheru was born in Romania and, even though he left the country a long time ago, he returns every year to visit his 104-year-old grandmother. Alex is the perfect example that hard work and determination are ingredients of success.
This is because the company he has founded – White Glove Estates – soon came to have in its “portfolio” many exclusive properties, most of them traded by Selling Sunset agents, but also the homes of key people in the Hollywood entertainment industry, such as Netflix directors, actors from the Bling Empire series, famous athletes or even the new house bought by Chrishell Stause.
He has recently renovated and refurbished the new Oppenheim Group office in Newport Beach, one of the richest areas in California.
Jason and Alex’s newest joint project involves 2 penthouses, located in an iconic building on the famous Hollywood Boulevard, which they purchased and then renovated from scratch. The design work is currently underway, and the result will be revealed to the public in the next season of Selling Sunset.
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*Jason Oppenheim: We have seen a 50% increase in sales volume per annum since Selling Sunset
Do you consider the US real estate market overvalued?
Jason Oppenheim: The US market has seen strong growth since the Great Recession in 2009, particularly in the last 1-2 years due to a historic low-interest rate environment. There are specific markets in the US that will always be in demand due to a high job concentration like Los Angeles, San Francisco, New York, and Miami. With more people being able to work from home due to COVID-19, people have been able to move to different cities and states without being limited to their work commute. As such, we have seen smaller markets around the US (such as cities that have historically been vacation destinations) rise rapidly in value. While is is impossible to say whether these cities are overvalued since there are still so many buyers willing still willing to pay a premium, in the long run the value of land will always appreciate since it is a finite resource.
Is the LA market affected by the scandal, given the fact there are many “Chinese money” in California?
Jason Oppenheim: No, there is still a huge shortage of housing supply in California. Any foreign buyers who need to sell their California assets would likely have made a profit even if they bought within the past few years. In addition, foreign investors looking to buy in the US do so in part because of our strong property rights for owners. The Evergrande situation probably makes the US real estate market even more attractive for foreign investment looking to diversify their assets.
Is bitcoin used to buy (trade) properties?
Jason Oppenheim: While none of my clients have purchased a home with Bitcoin directly, I do have clients who have gotten very wealthy from Bitcoin and other cryptocurrencies. Bitcoin sales have occurred in the US, but it is still not a mainstream concept. I imagine most people buying or selling real estate in Bitcoin today would liquidate the asset into fiat money shortly before or after the transaction, but that may change in the future.
How much has Selling Sunset helped you in developing your business? How has the business evolved in recent years (sales, profit).
Jason Oppenheim: Business has gone up tremendously since the airing of the show. While we have historically always grown 20% year over year, we have seen a 50% increase in sales volume per annum since Selling Sunset. It is a huge and unique marketing tool for myself and The Oppenheim Group as the publicity and exposure is worth millions of dollars per year in advertising.
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* Alex Becheru: As California attracts a good amount of millennial millionaires, contemporary architecture and modern farmhouse with smart home integration is most desirable
How has the US real estate market evolved in the last years of the pandemic?
Alex Becheru: The US market has been strong over the last few years and in particularly during the pandemic. This pushed the Los Angeles housing market into overdrive as more and more people realized the importance of investing in space and home.
How do you think this will evolve in the upcoming years?
California living has always been sought after. This high demand combined with the existing housing shortage will continue to push the market to remain competitive. In addition, other factors such as low mortgage rates and a scarceness in building supplies partly caused by supply chain disruptions due to the pandemic will continue to fuel the market.
What do wealthy Americans want to buy in terms of property? (Mentioning locations, prices, type of architecture). Are people more keen to buy top-notch properties, or ones that need renovation/remodel?
Alex Becheru: This varies from client to client depending on how well the property is priced to whether the client has the time, patience and flexibility in their lives for a major home improvement. While some clients prefer to buy a move in ready property others may opt to make upgrades specific to their taste. Through projects completed by our company White Glove Estates we have seen strong transactions in high end markets particularly in areas such as Hollywood Hills, West Hollywood, Beverly Hills and beyond, stretching from Santa Monica to Malibu. As California attracts a good amount of millennial millionaires, contemporary architecture and modern farmhouse with smart home integration is most desirable.
Is there a difference between the properties bought as an investment or those bought for “personal use”?
Alex Becheru: There most definitely is a difference. When purchasing a property with the intent of making a profit all the numbers have to make sense – you need to weigh the costs involved and estimate the potential return on investment. Properties bought for personal use on the other hand are more emotional and have specific criteria that is important to the homeowner that must be met.
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