Josh Flagg says COVID-19 Provides Opportunity for Buyers in West LA’s Real Estate Market

The effects of COVID-19 on LA’s real estate market are unknown, but Million Dollar Listing star Josh Flagg says that while challenges do exist, there are also opportunities to look out for.

“For realtors it’s very difficult to do business at the moment because most people don’t look at or purchase houses in the middle of a crisis.”

But Flagg, who has sold over $2 billion in real estate adds that those who recognize the tremendous opportunities right now are making great deals.

“I have three deals in escrow right now totaling $20 million,” says Flagg. “It’s not a huge amount but considering our climate right now, hardly anything is moving.”

After evaluating statistics and patterns in the real estate market, Flagg has some predictions for the future of the housing market. His predictions are based on his 15 years of experience and on what he sees out in the field. “Prior to Corona, we were already slowing down,” he says. “Crashing by no means. Just cooling down—and by the way, there’s nothing wrong with cooling down.” 

Flagg adds that the average home buyer or home seller might not have known that the market was cooling down, and that this is good news because it means that “[we] were not going into a depression or even a recession. Believe me you would know if we were.”

As for the future?

“We are in a time of the unknown. No one knows what’s going on or what’s going to happen, and anyone who tells you they do is lying.”

Here’s some housing market history:

“During the first recession prior to 2008, the housing market slowed down but prices really remained relatively the same,”  says Flagg.

“My suspicion is that had COVID not come up we would’ve experienced the same thing. Statistically during election years, the markets decline about 10% which is due to uncertainty in terms of the future and the next administration, whether it be a new administration or the same administration,” he says.

Flagg adds that this pandemic will last much longer than authorities are claiming it will, and if elections are taken into account, the market will be slow until the beginning of next year, which provides an opportunity for buyers. 

“The difference between our last crash and what we have today is that people are rich in comparison,” he contends. “There’s more money in the world today than there ever was. High-end residential real estate markets are not being affected the same way.”

So what effects will this pandemic have on residents?

“In real estate we say there are three Ds—Divorce, Death, and Despair. There will be death and there will be divorce,” Flagg contends, “but my accounts aside from people that have their own problems financially, there’s not an overall disparity. Right now people are losing jobs left and right but this is just a moment in time.”

The reason there’s a huge opportunity for buyers in Los Angeles is because right now people are scared to purchase. In addition to that, Flagg says: “Even those who don’t need to sell will want to sell because they’re going through a divorce or somebody passed away and they want to make a change, so they’re willing to take a hit or at least be less aggressive in negotiating due to the current climate.”

Because of this, Flagg says people who are willing to take the risk and purchase during this time are going to come out way ahead. In fact, Flagg and his husband are currently purchasing properties themselves wherever they see great deals. “Being a residential real estate agent is why I feel comfortable doing it, and why I advise most of my clients to do the same,” he says.

“Even if you purchase something right now and the market goes down even more… if you’re in this for the long run it makes no difference, adds Flagg. “If you buy a house for $1 million right now that in a six-months from now will be worth $900,000, guess what? When all this is over that same property is going to be worth anywhere from $1-$1.3 million.”

The Bravo star also notes that of course, people with a lot of money are not in the same boat, and can ride this wave a little more easily. “There won’t be an abundance of foreclosures in luxury real estate or an influx of houses coming to the market due to people not being able to afford them.”

Flagg, who is spending his free time working on charities as well as finishing construction on some of his projects, adds that his take on the real estate market “doesn’t apply to homes outside of the greater West Los Angeles area, but that’s where the opportunity lies.”