Backstabbing. Deal-making. Over-the-top emotions. It’s the stuff that makes reality TV so much fun. Center that drama around residential real estate, with people making the most expensive purchases of their lives, and negotiating agents looking to make massive commissions on that sale, and you’ve got yourself enough drama to fill hours upon hours’ worth of programming.
Which is exactly what Bravo has done with "Million Dollar Listing," scheduled to premiere the ninth season of its Los Angeles edition on Oct. 6 in the U.S. But while viewers love the drama, with 1.5 million tuning in every episode and millions more watching from around the world, it isn’t clear whether or not all of that generated exposure—or what some would call overexposure—actually leads to sales.
Insiders say new developments fare better because there’s a longer lag time, with properties still under construction sometimes featured on the show. The rest of the time, the agents who allow cameras to capture both their business and their personal lives get free marketing, which can mean an influx of new clients and a boost to their bottom line.
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"I didn’t really have a career before the show," said Ryan Serhant, one of three agents featured on "Million Dollar Listing New York," which just aired its fifth season this summer. "There are 80,000 real estate brokers in New York City, and I was just one of them until the cameras showed up and gave me legitimacy that I couldn’t have bought."
Now, Mr. Serhant, a real estate newbie when the audition process started in 2010, is a seasoned veteran, who says he gets almost daily calls from people who saw the show and want to work with him. Just recently, he said, this exposure has even led to three high-profile deals.
The first was for a three-floor, four-bedroom Tribeca townhouse at 56 Walker St., which was still under construction during filming and remained unsold when the season 5 finale, on which it was featured, aired. A broker who saw the show recently reached out to Mr. Serhant. Soon after, he made a deal and purchased the property for a Middle East client.
The other sales were made on two condos in an East Village project at 100 Avenue A, which Mr. Serhant was trying to sell during filming. When the episodes aired, a few of the condos remained on the market, which two out-of-town buyers—one from Minnesota and the other from the West Coast—bought as investments based solely on what they saw on their TV.
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Like Mr. Serhant, James Harris, a newish addition to "Million Dollar Listing Los Angeles," who joined the cast in season 7 with his business partner, David Parnes, said that they recently sold a contemporary Hollywood Hills mansion to an out-of-town buyer who first saw the property on the show. "They flew in to see it in person, bought it, and paid cash," Mr. Harris said.
Stories like these are the exception, though, rather than the rule, and that’s for a few reasons. The first is the show’s plot. People want to be entertained and see deals from start to finish, Mr. Serhant said. "They want to see properties sell, how much they sold for, big numbers, and flashy tactics," he continued. If a property is left languishing on the market, that story remains unresolved.
A second reason is timing, especially important for resale properties. "We’d like to think that if we’re filming something in February, that by the time it airs in October, the house has already sold," Mr. Harris said.
Yet another factor: The demographics of the show’s viewers, whose median annual household income is just over $85,000—far below what would be needed to buy any of these properties.
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"A truly exclusive property doesn’t have to appear on a reality TV show to sell," said Stephen Resnick, an agent at L.A.’s Hilton & Hyland. "The property speaks for itself, and just sells."
In fact, a "million dollar listing"—or even a $5 million listing—isn’t considered all that expensive anymore in Los Angeles, he said. Those real gems start at around $20 million, he continued, adding that most of the properties featured on the show are what he’d consider "A-, not A+ properties," or, "semi-good properties in a weird location."
Mr. Resnick believes that these types of properties are missing from "Million Dollar Listing" in part because the people that are buying and selling them have zero interest in being featured on a reality TV show. That leads him to believe that the show is really more about publicity for the featured agents, not about selling the properties.
Even if there is some truth to Mr. Resnick’s statements, Mr. Harris said that he sees "Million Dollar Listing Los Angeles" as honestly depicted a portion of his work. The properties are real, the prices are real and the drama is real, if somewhat embellished. But there’s also a lot that happens off camera, Mr. Harris said, noting that only about 30 percent of his business is ever filmed. "I make it very clear to my clients that the TV show is one side of my life, and the other side is very confidential, discreet and has no involvement with the show whatsoever," he said.
Here’s a look at other news from around the world compiled by Mansion Global:
What’s with L.A.’s sales slowdown? Blame over-the-top asking prices
The number of sales is shrinking while supply is growing in the Los Angeles housing market, even as prices continue their upward climb. To wit: pending sales in August were down 35% from the previous year, while supply is up 56.7% over the same period, according to a new report from realtor John Graff. The discrepancy, according to Mr. Graff, is likely the result of ambitious sellers flooding the market with "under par and overpriced homes," resulting in a market standoff with rightly skeptical buyers. [Curbed Los Angeles]
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India aims to lure foreign investors with new incentives, but they don’t come cheap
The Indian government is launching a program that will give foreigners a 10-year residency permit, multiple-entry visa, and the right to purchase real estate, in exchange for a $1.5 million investment in the country over an 18-month period, as well as the promise to create a minimum of 20 jobs for Indian residents per fiscal year. The program is similar to deals available in the U.S. (where you can get a green card for investing $500,000 and creating 10 jobs), and is designed to incentivize entrepreneurs who are already eyeing the nation’s rapidly-expanding economy. [CNN Money]
Middle Eastern investors double down on New York City real estate
Foreign investors—and particularly those hailing from the Middle East—continue to see U.S. commercial real estate as a solid place to put their money, particularly in the New York City market. A new report from CBRE Group Inc. shows NYC as the top U.S. destination for Middle Eastern dollars over the past 18 months, with a total of $6.5 billion in transactions, including the purchase of a stake in the Manhattan West development by the Qatar Investment Authority. Other top U.S. cities for such investments were Los Angeles, Washington, Atlanta, and Miami. [Bloomberg]
A massive, $20 billion new development is headed for Dubai
Dubai Holding—a developer controlled by the city’s ruler—has revealed plans for a new $20 billion mixed-use development in the heart of the city, just across the Mall of the Emirates in the Jumeriah Central district. All told, the project is expected to create 11,000 residential units and three malls, in addition to hotels, office spaces, and various other entertainment spaces, though it will likely take several years to complete. [Associated Press via U.S. News & World Report]
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Luxury investors flock to Argentina’s Puerto Madero in Buenos Aires
What was once a planned development with a struggling economy has become Argentina’s biggest hub for foreign real estate investors and renters. Puerto Madero is an isolated section of Buenos Aires, which makes it a difficult sell for Argentinians, but popular with investors and wealthy foreigners, who seek out its relative stability, as well as its remove from crime, or indeed, much of any interaction with the poorer residents of Buenos Aires. According to data from the Central Bank of Argentina, capital gains on real estate in the area have jumped 120% over the past 35 years, and for investors with rental income, those gains plus income rose 562.9%. Miami’s Related Group is now building two luxury towers in the area, as well. [Forbes]
British builder says the market has evened out post-Brexit
Here’s at least one sign that Britain’s housing market is seeing some stability after Brexit-related shake-ups: the Berkeley Group, a major home builder in the country, has reported that the property market returned to its usual August levels. After a dip in activity directly before and after the June Brexit vote, Berkeley said in a statement, "The market in August, traditionally a quiet month, has returned to the relative levels reported for the first five months of the year." However, the company also criticized the British government for high taxes on transactions, which it says slow down market activity. [Business Times]
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An entire new city is being proposed for the Australian coast
A huge parcel of sugar cane farmland is on the market between Brisbane and the Gold Coast, and 248 property owners have come together with a proposed plan to use it to create a new coastal city, complete with housing, retail, schools, and even a theme park. If it goes through, the deal is expected to cost around $1 billion, and the sales team is already in talks with major Chinese developers for the theme park plans. However, such a project would require numerous government approvals and zoning changes, and would likely take at least a decade to complete. If brought to fruition, it will become Australia’s largest "masterplanned" city. [Daily Telegraph]
These are the European countries where residents are the most bullish on real estate
Amid global economic uncertainty, some markets are naturally faring better than others, and as such, ING has compiled a list of the 13 European nations with the most projected growth in property values—at least, according to the locals. A whopping 81% of Turks expect property values to rise in the next year, while 78% of Luxembourg residents say the same of their nation, as do 71% of residents surveyed in Austria. Other especially confident countries on the list include Belgium, Germany, and somewhat surprisingly, the U.K. [Business Insider]