Above, Michael Nourmand and Martha Mosier
The various challenges facing the residential real estate industry over the last few years—high mortgage rates, limited inventory, lawsuit-related commission issues, etc.—certainly must seem fairly insignificant compared to what Los Angeles-area brokerage executives now must face with the still-raging fires causing incalculable physical damages and threatening the very livelihoods of their agents.
For Michael Nourmand, president of Nourmand and Associates REALTORS®, and Martha Mosier, president of Berkshire Hathaway HomeServices California Properties, there’s no masking the enormity of what lies ahead. While consumed with the present and finding living spaces for people, they are both steadfast in the belief that there will be a new, albeit different, land of opportunity to come.
“Our agents have sustained immeasurable loss in our market, but we will rebuild,” vows Mosier. “We lost two offices in Pacific Palisades, but more importantly, we have dozens of agents and employees who have lost their homes, as well as thousands of clients.”
Simply finding everyone alternative housing is the priority now, and Mosier points out that Berkshire Hathaway HomeServices has taken the lead in making that happen.
“We’ve started a company-wide link for all of our agents in the surrounding communities and in Los Angeles to upload any coming-soon rentals that are going to be expedited and available now, and on-market and off-market rentals,” she says. “We are mobilizing all of those opportunities and sharing those with our agents.
“It’s remarkable how the real estate community is coming together to help these agents and communities that have lost everything, from grassroots movements to the employees in our offices. Our parent company stepped in, and we’re utilizing all the resources we can, and they’re helping us. We have started a disaster relief fund that will benefit our agents and employees who have been displaced.”
Mosier explains that the raging fires have caused such widespread destruction that it’s a race for thousands to find places to live, and will only get more difficult until there is a conclusion. Housing is not the only thing people need. Many lost most of their clothes and possessions as well, and also need clean food and water.
“The hotels are full, their friends’ homes are full and Airbnbs are full, so in the next few weeks, they’ll need to have some stability with alternative housing; that is the first and foremost need,” she says. “We’re also collecting water bottles and things like that because in these affected areas, the water supply is diminished and damaged. And there are also clothing drives. The needs change week by week, and this will be a long path to process, and to help our agents heal and move forward. And our clients, too.”
Berkshire Hathaway HomeServices’ agents and employees won’t have to worry about their jobs.
“We have multiple office locations nearby in Los Angeles, so our agents will be working there until we move forward with finding a location in Pacific Palisades,” says Mosier. “That community is significantly diminished, but there are surrounding places nearby where we have offices. Our agents in the interim will be located in those areas.”
The fires didn’t quite hit home, literally, for Nourmand, but they are close enough that he moved his family to a hotel to avoid the smoke and acrid air. “It’s like an apocalypse,” he says about the continuing blazes that have turned lovely neighborhoods to scorched earth. “You can see the smoke all over the city, and when I got up in the morning, there was ash all over my car.”
Nourmand explains that there is naturally a surge in leasing prices for properties nearby, with thousands of people having lost their homes, but it’s extremely difficult to find something, even with the help of an agent.
“There is an anti-gouging thing in place to prevent landlords from taking advantage of desperate tenants,” he says. “It is almost impossible for those of us trying to help, and that’s with zero regard for getting paid, zero written agreement, zero paperwork, nothing. This is just to try and send people places. You almost have to know a landlord, or the agent has to have a relationship with the landlord.”
Nourmand’s agents are still busy helping buyer clients, but obviously in different neighborhoods for many, he says. And insurance availability issues are now front and center.
“Pacific Palisades obviously is very damaged, but people are looking to buy in Brentwood, Santa Monica, Westwood and Beverly Hills. The question’s going to become, can people get insurance? Right now I’m hearing conflicting things. I have to make some calls. One agent said there’s a moratorium, but another one said that’s not true.”
On January 7, the California Insurance Commissioner issued a “mandatory moratorium on cancellations and non-renewals of policies of residential property insurance” applying to 35 zip codes that were affected by two separate fires, with a note that more zip codes could be added in the future.
Nourmand admits there will likely be price hikes on homes for sale because of the sudden inventory issues. “I think that there will be some price appreciation just because of basic supply and demand,” he says. “I think it’s going to be like when they had fires in Malibu, and the Malibu market was depressed for some time…(t)he neighboring areas are going to have more demand and upward pressure on prices.”
Nourmand noted that agents in Southern California will need to sharpen their expertise on insurance going forward.
“As an agent, you have to be a generalist and have some understanding of all the different aspects of the (homebuying)-process,” he said. “Insurance prices have gone up a lot, so that was already somewhat of a requirement over the past four or five years.
“There’s a disclosure now for getting insurance. It’s a contingency, which it wasn’t specifically called before. But yes, I definitely think that as attentive and knowledgeable as we have to be about insurance, we’ll have to be even more now, and we’ll also just have to have better insurance brokers we work with who we can give an address and have them say, ‘Okay, here’s who I think will do the insurance, and here’s roughly what I think the cost will be.’ So that way buyers can factor it in before they write an offer, or at a minimum, early on in the escrow period.”
Mosier provided an example of the prevailing attitude she has encountered, even among those who have lost so much.
“I was in a virtual meeting with all of our agents and their manager, who lost everything, too,” she said. “He said he was in his office and an agent told him that the consensus in the group was that ‘Our homes have fallen and our office has fallen, but we are still standing.’”
