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The turf wars of Newport Beach

Newport Beach real estate pros may have scoffed when Beverly Hills agents, with their high-flying, reality-TV lifestyles, planted flags on the Orange County coast.

But the outsiders are here, and they’ve made clear they plan to stay. They cite their TV-enabled reach and their connections to the global elite, who’ve taken a shine to the stretch of coast running from Newport Beach through Laguna Beach to Dana Point. The reward for these agents is clear: fat commissions if the area transforms from an upscale but provincial market into one that could someday match prices in Malibu and Beverly Hills.

Veteran local agents often work and rub elbows with the newcomers, but they’re not so sure if this outsider interest in their turf will transform their market. There were 442 sales of single-family homes in Newport Beach from Jan. 1 to Nov. 27, MLS data show, with the median sale at $3.5 million, and just 18 sales over $10 million.

Tim Smith of Coldwell Banker has sold trophy homes in the Newport Beach area for 20 years. He also played down the notion that a turf war is taking place.

From 2012 to 2020, he estimated that 14 percent of his prospective clients hailed from outside the area. Since the pandemic, he estimated that the number has ballooned to 50 percent. However, there’s no changing the basic nature of real estate, he said. It’s a local game.

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“Real estate is local knowledge and expertise,” Smith said. “Instead of big billboards, people want to meet agents in their country clubs where I meet them.”

Smith also wondered if Orange County can meet the trophy house demand. He frequently fields calls for listings on an acre of land with 20,000-square-foot homes. But the majority of these homes are not on the market.

“Until the trophy, unicorn properties change ownership, I don’t see a real opportunity for this product in the short term,” Smith said. In October, he noted that about 19 homes priced over $20 million sold in Orange County. By mid-November, 17 homes asking over $20 million did. The record was set in November 2021, when hedge fund manager Joseph Edelman paid $70 million for a mansion in Abalone Point, an exclusive enclave within a gated community in Laguna Beach’s Irvine Cove.

Jason Oppenheim, co-founder of the Oppenheim Group, doesn’t see scarcity in the Orange County market. He predicted that his Orange County team of 25 people — 10 of whom appear on “Selling the OC” — would do $500 million in sales volume in 2023.

One reason for continued growth, he said, is that a number of agents have left the business after the spike in interest rates.

“If anything, there’s going to be less agents competing for more properties,” Oppenheim said.

Top Los Angeles agents started making inroads in the pandemic era. In 2020, Fredrik Eklund, head of the Eklund-Gomes team at Douglas Elliman and a star of now-defunct reality show “Million Dollar Listing New York,” teamed up with his Orange County colleagues Seth Nelson and Ariana Gaffoglio. The next year, Nelson and Gaffoglio made waves by selling 4130 Calle Isabella, a San Clemente home, once part of Richard Nixon’s White House West, for $33.9 million.

In 2021, Aaron Kirman, a top luxury agent who had appeared on CNBC’s “Listing Impossible,” opened a satellite office with former NFL cornerback Morgan Trent. The same year, West Hollywood-based Oppenheim Group opened a 4,500-square-foot office in Newport Beach’s Corona Del Mar enclave when the firm filmed “Selling the OC,” a reality show that debuted on Netflix this summer.

In June, Rayni and Branden Williams, co-founders of the Beverly Hills Estates brokerage, tapped Estel Hilton to head its Newport business.

Josh Altman, a star of “Million Dollar Listing Los Angeles,” represented plastic surgeon Terry DuBrow and his wife, reality show star Heather DuBrow, in an off-market sale of a $55 million mansion dubbed Chateau DuBrow in Newport Beach’s Crystal Cove neighborhood. The closing was definitely more than a reality show plot point. It marked the priciest deal of the year — and the third-highest in Orange County history.

In a recent interview with The Real Deal at his Beverly Hills office, Altman declared that his team would be the leading agency in the O.C. by 2024, with $500 million in listings, the same as he does in L.A. The old model —local agents handling sales with local buyers — is no longer as relevant, he said.

“It’s a global buyers community,” Altman said. “If I go through the past 10 sales that I’ve done in Newport, there’s a tech guy from San Francisco. There’s a couple involved in tech from Seattle. There’s a wealthy woman out of Texas, a hedge fund guy in New York. Rarely is it that local buyer. It will be tough for people to compete against us because of our global reach.”

Altman said his family is placing deeper roots in Newport Beach. He bought a home there in 2018, and he’s seen a lot of his L.A. clients following suit, concerned about livability issues and L.A.’s transfer tax, which passed in November.

Some local agents welcome the celebrity outsiders. Nelson and Gaffoglio pitched Eklund on partnering in 2019, and they claim their sales jumped by more than a third in the year after they joined.

“There’s no secret that this guy has 2 million followers on social media channels,” Nelson said of Eklund.

“Just by us taking a listing in Orange County and him putting it on his channels, it’s a huge exposure model that many don’t have the luxury of offering clientele.”

Others, though, think it’s more hype than anything.

Cyrus Mohseni, founder of Huntington Beach-based The Keystone Team, said that he hasn’t seen signs from Beverly Hills firms during his drives through Newport Beach and surrounding towns. He contended that marquee outsider firms don’t give Orange County agents much support beyond the sizzle of working with a big name.

“They can make a small impact at the end of the day, but it’s like a drop of water in the ocean,” Mohseni said. “Are you going to have longevity if you don’t give your agents the support they need?”

https://therealdeal.com/issues_articles/the-turf-wars-of-newport-beach/

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