ULA Line: $181.2M Week, South Bay Leads

JordynOkay, so get this. Twenty-five and a half million dollars, Manhattan Beach, the Hill section, under contract.

DavidIn a week when the whole county looked like it was sleeping in.

JordynExactly. Twenty-two luxury deals the week of September eighth, and they added up to a hundred and eighty-one point two million dollars.

DavidThat's down twenty-one percent in dollar volume from a year ago.

JordynOuch. And wait for it, the South Bay grabbed about forty-one percent of it.

DavidHold on. The beach towns beat the West Side?

JordynI'm Jordyn, that's David, and this is Listing Price, where we ask rude questions about expensive dirt.

DavidSo who actually won the week? Because one big Hill section deal can make a whole region look like a genius.

JordynFair, or a fluke.

DavidRight.

JordynEither way, that's the question we're chasing today. Did the county just go quiet, or did the money change its mailing address?

DavidAnd whether a tax line on a map has anything to do with it.

JordynAnd the West Side is sitting there asking where its contracts went.

DavidThat's the headline. Now the full scoreboard.

JordynOkay, so get this. The South Bay slice wasn't just a percentage. It was seventy-three point six million dollars of asking volume.

DavidAsking volume, not closed. That word matters.

JordynFair. These are signed contracts, single-family and condos tracked by the Eklund Weekly Luxury Report LA. The Real Deal's Kari Hamanaka wrote it up on September fifteenth.

DavidSo nobody's counting a check that cleared.

JordynNobody's counting a check that cleared. They're counting a signature.

DavidFine. Where were the signatures?

JordynFour places. Redondo Beach, Manhattan Beach, Rancho Palos Verdes Estates, Palos Verdes Estates.

DavidRedondo's the odd one out. Everybody else on that list is a cliff-side postcard.

JordynRedondo's the plus one who got into the party, and the range is wild. The report says the deals ran from about five million dollars up to about twenty-six million.

DavidThat's a huge spread. Five million is a very nice house in Redondo. Twenty-six million is a different sport.

JordynAnd the top of that range is the Hill section deal we already talked about. So the ceiling is basically one house.

DavidWhich is my whole problem. Jordyn, one week.

JordynOh, here we go.

DavidOne week, four cities, and a ceiling propped up by a single trade. You want me to call that a trend?

JordynI want you to call it a scoreboard. Scoreboards don't promise next Sunday. They tell you who scored this one.

DavidSure, but a scoreboard that resets every seven days is just weather. Weather isn't climate.

JordynWeather report, sponsored by Palos Verdes.

DavidI'm serious. Take out the top deal and tell me the South Bay still leads.

JordynI can't tell you that. The source doesn't give me the breakdown. What I can tell you is that four separate South Bay cities had signed paper that week, not one.

DavidOkay, that's a point for you. Four cities is harder to wave off than one.

JordynThank you. Write it down.

DavidStill weather, though. Interesting weather.

JordynHere's how I keep score, though. My question is simple. Where are the four-plus million dollar contracts getting signed? That's the board I care about because that's where the real checks live.

DavidAnd I'll keep repeating that asking volume is the sticker, not the receipt. It tells you what sellers wanted when a buyer signed, not what anybody ended up paying.

JordynThen zoom out. The county total was down twenty-one percent from a year ago. So the South Bay's forty-one percent is a share of a smaller pie.

DavidWhich cuts both ways. A big share of a shrinking pie can mean the South Bay is strong or it can mean everybody else got weaker. Share alone can't tell you which.

JordynSo here's my rule for the week. Watch the share and the total together. If the total keeps sliding and the South Bay keeps its slice, that's a story. If the total bounces back and the slice shrinks, that's just a loud week.

DavidI can live with that rule. It's the first thing you've said today that doesn't need a flag planted in Palos Verdes.

JordynAnd here's what's bugging me. The Westside is where everyone assumes the money goes. Beverly Hills, Bel Air, Malibu. And the headline is a stretch of coast south of the airport.

DavidWhich is why people start whispering about the tax. If the Westside is quiet and somebody else is busy, someone's gonna say buyers are walking across a line.

JordynThe border crossing theory.

DavidRight. And before we credit the border, we'd better pin down where the border actually sits.

JordynOkay, so before anyone crosses any borders, what does the line actually cost today? Because I keep hearing the old number.

DavidThe old number is stale. The LA Office of Finance FAQ is the primary source here, and it says for closings after June thirtieth, twenty twenty-six, the four percent tier applies above five point four million dollars.

JordynAnd the top tier?

DavidThe five point five tier kicks in at ten point nine million dollars. That's the figure that matters most.

JordynHold on. So the brief's cutoffs are off?

DavidThe rates are right. The dollar cutoffs moved because the thresholds adjust every year.

JordynOf course they do. A tax with a birthday.

DavidAnd the rates sit on top of the base city tax. The table shows totals of four point four five percent and five point nine five percent.

JordynWhich is a different number than the one people shout at dinner parties.

DavidRight.

JordynWalk me through it from the seller's chair. If I'm listing above five point four million but below ten point nine, where do I land?

DavidYou're in the four percent tier. At ten point nine and up, you're in the five point five tier. So the gap between the tiers is one and a half points of rate.

JordynAnd on a ten million dollar sale, every single point is a hundred thousand dollars. That's real money to argue over.

DavidIt's why the cutoffs matter. A seller near the edge of a tier is doing arithmetic before they ever call an agent. And because the thresholds adjust each year, that arithmetic is a moving target.

JordynOh, man. And this isn't some fading grudge either.

DavidNo. The Real Deal ran a piece July twenty-sixth under the headline, "Homeowners Thinking Twice About Selling." It called ULA a 4 to 5.5% transfer tax on property sales in the city of Los Angeles.

Speaker 3Three years in.

DavidThree years in, and the piece says it's still top of mind for luxury homeowners and brokers.

Speaker 3Still top of mind. That's the polite version of seething.

DavidIt even quotes a home builder on seller hesitancy. I'll leave his exact words to the article.

Speaker 3Fair. Now, here's my hope. Somebody kills this thing, right? There was a repeal headed for November.

DavidThere was. Earlier advocacy newsletters expected the Howard Jarvis measure on the ballot.

Speaker 3And?

DavidAnd LAist reported later that it's off. The Howard Jarvis Taxpayers Association shelved its statewide transfer tax measure.

Speaker 3Shelved. Why?

DavidBecause Sacramento passed a substitute. That one asks voters to raise the vote threshold for new special taxes to two-thirds.

Speaker 3New taxes. So what about the old one?

DavidAIS says existing transfer taxes, such as ULA, were left untouched.

Speaker 3So the repeal fight ended with a rule for future taxes and a shrug at the current one.

DavidThat's the read. And when the newsletters and the later report disagree, I'll go with the later report.

Speaker 3Yeah, me too. No ballot rescue.

DavidWhich means a seller above ten point nine million stares at five point nine five percent total, and that's the working assumption for anyone listing today.

Speaker 3So the tax is going nowhere, which makes me ask, does the money cross the line?

DavidThat's the part I actually want evidence for.

Speaker 3Okay, so the obvious next question is where a buyer with eight figures goes if City of LA is off the table. And the obvious answer is next door.

DavidBeverly Hills, Malibu, cities with their own city limits and no ULA.

Speaker 3And that's the thing about a city line. From the driveway, you can't see it. No sign, no fence. But at closing, it's the difference between paying the tax and not.

DavidWhich is why I think of it as a buyer's filter. If the sale is in the City of Los Angeles, the tax enters the math. If it's in Beverly Hills or Malibu, ULA doesn't apply, and that cost never shows up.

Speaker 3The Real Deal ran a piece in October 2024 on how the luxury market feeds ULA funds, and in it, agents reported residential deals shifting to cities outside LA. Malibu and Beverly Hills were the two named.

DavidNamed by whom, though?

Speaker 3Agents. That's the catch, and I'll flag it now. It's agent-reported.

DavidFine, but agents are the ones in the room when a buyer walks.

Speaker 3Wait for it. The same piece has a broker describing one client who will no longer buy inside the city.

DavidNo longer. Not is hesitating, not wants a discount.

Speaker 3One client, one broker. I'm not building a skyline on that.

DavidNobody's asking you to, but it's a data point with a motive attached, and motives are what I look for.

Speaker 3Of course you do.

DavidAnd it isn't a lone voice. The Hollywood Reporter wrote an early impact piece back in 2023 saying independent LA County cities, Beverly Hills and Malibu among them, became more desirable because ULA doesn't apply to them.

Speaker 3Dated, though. That's year one of the tax.

DavidDated, sure, but it's the same story from two outlets a year apart.

Speaker 3Two outlets repeating the same anecdote isn't two measurements, David.

DavidFair.

Speaker 3Still, the logic is easy to see.

DavidA transfer tax is a cost that stops at the city line.

Speaker 3Which is the whole argument. If you can buy something similar just past the line and skip that bill, the math does itself.

DavidDoes it? Because here's what I can't find: deal counts. How many contracts did Beverly Hills sign this week? How many did Malibu?

Speaker 3Hold on. We don't have those.

DavidWe don't. The sources we've got give us the South Bay, and they give us stories. No Beverly Hills tally, no Malibu tally.

Speaker 3So we're running on anecdote. Anecdote-backed hypothesis. That's the honest label.

DavidLet me at least say what a confirming number would look like. A Beverly Hills tally and a Malibu tally that rose in the same week the City of LA column fell. That's the picture that would turn this from story into evidence.

Speaker 3And it would need to hold for more than one week, or you'd call it weather. I've heard that metaphor somewhere today.

DavidRude. But yes, one hot week in Malibu wouldn't prove a migration any more than the South Bay's week does.

Speaker 3So the border crossing theory is plausible. It has agents behind it, and it has a very clean tax motive. What it doesn't have is a count. Plausible isn't the same as measured.

DavidI'll take the label and still argue it. Money is lazy and smart at the same time. A buyer who wants the Westside lifestyle will find the zip code just past the line.

Speaker 3Or the buyer just waits, sits on the sidelines, watches, and signs nothing anywhere.

DavidThat's a convenient out. Sitting out doesn't explain why agents keep naming the same two cities.

Speaker 3And migration doesn't explain a down week across the whole county.

DavidOkay, that one stings.

Speaker 3And think about what that means for a buyer today. If you're shopping at the top of the market, the line on the map is now part of your search criteria, next to the view.

DavidAnd for an agent too. Pitching a Beverly Hills or Malibu listing, you get to say there's no ULA bill waiting at closing. That's a sales pitch with a built-in discount.

Speaker 3Plot twist, maybe nobody crosses the line at all. Okay, so if nobody's crossing the line, where did the sales go? Because the UCLA number is the one that made me sit up.

DavidWhich number?

Speaker 3A law firm update from Hanson Bridgett cites UCLA research estimating that ULA cut the odds of a sale above the threshold by as much as 55%.

DavidFifty-five.

Speaker 3As much as. Hold on to that phrase. We'll need it.

DavidOh, I'm holding it because look at what that number actually measures. It's the odds of a sale happening at all. It doesn't say the buyer went to Malibu.

Speaker 3Right. A sale that doesn't happen has no zip code.

DavidExactly. Half the odds gone could mean half the deals walked across the border. It could also mean half of them just stayed home.

Speaker 3And you're a stay-at-home guy now. Two beats ago, you were the migration guy.

DavidI was the guy with the anecdotes. I still like the anecdotes. But Jordyn, a dead deal and a relocated deal look identical in the weekly counts. Both just vanish from the City of LA column.

Speaker 3Wait, though. If they relocated, someone's column should be growing.

DavidAnd we've admitted we don't have that column.

Speaker 3Which is my whole point. Remember that builder from the July piece? The loose version is that homeowners are hesitant to sell because they want to avoid paying the tax.

DavidHesitant to sell, not eager to sell somewhere else.

Speaker 3Not eager to sell at all.

DavidAnd that's a slower kind of freeze than a vote or a ballot measure. Nobody announces it. A listing just never appears, and nobody writes a headline about the house that didn't go on the market.

Speaker 3Right. And a listing that never appears can't show up in any weekly report. The silence is the signal.

DavidOkay, but a builder who remodels is a funny witness for that. If you can't sell without a hit, you remodel. That's his business.

Speaker 3Oh, that's fair. The man has a stake in people staying put.

DavidDoesn't make him wrong. It makes him a witness with a point of view, and that's all I'm saying.

Speaker 3Fine, but put the two together. A study says the odds of selling drop, and a builder says owners are sitting tight. Neither one says buyers packed up for Beverly Hills.

DavidNeither one says they didn't, though. Some buyers want a Westside address, and they'll pay a Beverly Hills price to skip the tax. That's rational.

Speaker 3Sure, some. But the sellers are the ones holding the lever. If the Bel Air owner won't list, there's nothing for the buyer to cross a border to chase.

DavidUnless the buyer finds the same house on the other side of the line.

Speaker 3A Bel Air view in Beverly Hills is a very specific shopping list.

DavidFair. So where do we land? I'd say the South Bay lead is a clue that money moves.

Speaker 3And I'd say it's a clue that the city of LA went quiet and the South Bay didn't, which is a different sentence.

DavidWe're not agreeing on this one, are we?

Speaker 3Not fully. You get migration as a possibility. I get freeze as the better bet, and nobody gets proof.

DavidI'll take possibility, but I want something that breaks the tie.

Speaker 3Then let's do arithmetic instead of anecdotes.

DavidMeaning?

Speaker 3Last test. Take a twenty million dollar Bel Air sale and put it on the tax scale next to a neighbor who pays nothing.

DavidOh, now that I wanna see.

Speaker 3Okay, so get this. Five and a half percent of twenty million. David, do the honors.

DavidOne point one million dollars on a Bel Air sale paid at closing.

Speaker 3A million one. That's a very nice kitchen, a pool, and a guest house nobody asked for.

DavidAnd that's the top tier. So the number is the number.

Speaker 3Now run the neighbor. Same twenty million, one lot over the city line, no ULA.

DavidThen the buyer or seller keeps that one point one, so the neighbor can charge a premium and still look cheaper after tax.

Speaker 3Wait, a premium of what? You're sneaking in a comp.

DavidNo comp. I'm saying the gap exists as a number. The discount you'd need on the Bel Air side just to break even is that one point one, about five and a half percent off.

Speaker 3Which sellers hate. Knocking five and a half percent off a twenty million ask is a haircut, and they'll say the lot is unique.

DavidUnique? Sure. But buyers shop. If the view is similar, a million dollars buys a lot of persuasion.

Speaker 3Or it buys nothing because Bel Air buyers aren't comparing spreadsheets. They want the gate, the privacy, the address.

DavidFair. So the discount offsets it for some buyers and not for others.

Speaker 3Mm, here's a real one, though. The Hollywood Reporter ran a piece in twenty twenty-three with a Brentwood house listed at twenty-two million.

DavidCut to eighteen.

Speaker 3Cut to eighteen, then sold for seventeen point one. And Dirt.com figured nearly a million in ULA tax on it.

DavidHang on. Four point nine million dollars off the original ask, and the tax is another million on top?

Speaker 3Right. So the price fell, and the tax still sat there like a second bill.

DavidThat's the argument for the discount not being enough. You can slash, and the tax doesn't shrink with your pride.

Speaker 3Though it's dated. That's twenty twenty-three, and thresholds have moved since.

DavidYes. So I'd treat it as color, not a rate card.

Speaker 3Color, I'll take. Okay, so the math says a million one. The question is whether a Bel Air seller blinks.

DavidSome will. Some will sit on the gate and wait.

Speaker 3And remember what that million one is. It's only the tax. It says nothing about whether the house is worth the price.

DavidWhich is the honest limit of the exercise. We've shown the size of the gap, not who blinks first. That takes real comps, and we're not going to pretend we have one.

Speaker 3All right, we've got the money on the table. Time to land the plane. Okay, so the map wins. A zip code on a listing sheet tells you nothing, but the city line tells you what the closing costs.

DavidStill a friendly disagreement, though. I say some buyers did cross it.

Speaker 3And I say they stayed home with their checkbooks closed.

DavidNext week's tally might referee. Does the South Bay lead hold?

Speaker 3Oh, I'm betting yes. Pride is on the line, David.

DavidDangerous bet.

Speaker 3Dangerous, but fun. Whatever the tally says, the line on the map is the thing to check before you fall in love with a house.

DavidCheck the city limits first, then the tax bracket, then fall in love.

Speaker 3New episodes land every Tuesday. Follow Listing Price wherever you listen.

DavidAnd send us a deal or a listing you want covered. Bonus points if the driveway has opinions.