After the WGA and then SAG-AFTRA went on strike, Los Angeles real estate agent Michelle Schwartz quickly felt the impact. “I was working with a producer who was relocating from England,” she explains. “It was a good all-cash $6 million purchase. Then the strike happened, and the deal was off. She says, ‘I’ve got to go back to the U.K. until this is over.’
“I’m seeing a lot of that, and it’s more than just the writers and actors,” continues Schwartz, managing partner of Sherman Oaks, Studio City and Calabasas for The Agency. “It’s everyone in production, with the exception of reality TV. We have a massive buyer pool that is not in the market right now.”
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But attributing the decrease in that pool solely to the strikes is difficult, according to Douglas Elliman agent duo Heather T. Roy and Learka Bosnak, who note that the market is still feeling the effects of the climb in interest rates beginning in March 2022.
“The thing we know from a long career in real estate is that uncertainty has a big impact on the real estate market,” says Roy. “Consumers don’t make big purchases when there’s uncertainty. The big thing that affects real estate is life changes — you adopt six dogs and you need a backyard, or you sell a script and you use the money for a down payment.” But because of the strikes, she says, “Now, if you have money, you’re definitely not sure if you’re going to have more.”
Though agents contacted by THR aren’t yet seeing foreclosures or payment defaults as a result of the strikes — the WGA strike officially ended yesterday, Sept. 27 — real estate pros have heard anecdotally from industry clients that they have only enough financial reserves to last through the end of the year. Selling one’s home to attain liquidity, however, could lead to more monetary strain.
“L.A. is not a place where you can just sell your house, take a bunch of money, and then get a really affordable rental in the same area,” says Schwartz. “Getting out of the housing market, you’re never really going to be able to get back in.”
That reality is rooted in the sheer lack of available properties. “Most people are trapped in their home,” says Thomas Hilal of Nourmand & Associates. “There is so little inventory right now that anything that does hit the market is actually selling at a strong price.”
In a market with higher inventory and lower interest rates, the strikes likely would have unleashed a rash of sales. Instead, people are hunkering down. “If we weren’t so inventory-constrained, I think we would have felt much more economic distress from the strike, but there’s just so little out there,” adds Hilal. “So many people are locked into mortgages at 2 percent, and they’re unwilling to sell those homes.”
Though Craig Strong, vp luxury home sales at Compass, says he has yet to observe any effects from the strikes, he anticipates the market soon will if the actors standstill continues for much longer. His advice to clients would be to hold on to their property for as long as they can: “If you end up selling and go into another housing situation, it’s most likely going to cost you more than the situation you’re in right now. On the flip side, if you feel like it’s getting too tight, then you want to sell before everyone else starts to sell so you can get more for your home while there’s still a lack of inventory in the area.”
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This story first appeared in the Sept. 27 issue of The Hollywood Reporter magazine. Click here to subscribe.
