French-born entrepreneur Dan Malka, who founded Malka Realty after a successful career transition from tech, has witnessed firsthand the dramatic shifts in Los Angeles’ luxury real estate market. Having closed his first multi-million dollar deal just 45 days into his real estate career in 2019, Malka has rapidly established himself as a key player in LA’s high-end property market, particularly across the prestigious westside neighborhoods of Beverly Hills, West Hollywood, Brentwood, and Malibu.
“When I started in real estate, I focused on small multi-family buildings and land sales to developers,” says Malka, who made his mark in the luxury segment after successfully selling a $10.6 million Santa Monica beach house that had previously sat stagnant on the market for six months. Today, his portfolio includes listings up to $43 million, reflecting his deep understanding of the ultra-luxury market.
Drawing from his experience across LA’s most exclusive neighborhoods, Malka points to the Ultra-Low Affordability (ULA) tax as a game-changing factor in the local market. Implemented in March 2023, the tax imposes a 4% levy on properties selling above $5 million, increasing to 5.5% for properties over $10 million within Los Angeles city limits.
“Properties that were previously listed at $12 million are now selling for $9.995 million,” Malka explains, noting how transaction structures have evolved to minimize tax impact. He cites a striking example in Bel Air, where a prestigious property’s value dropped from $60-70 million to a final sale price of $26 million.
However, Malka’s expertise across different submarkets reveals a more nuanced picture. Beverly Hills and Malibu, which fall outside the ULA tax jurisdiction, continue to thrive. In Malibu, where Malka has observed recent record-breaking sales including a $200 million celebrity purchase, beachfront properties still command premium prices of up to $10,000 per square foot.
Malka has observed an emerging trend in the ultra-luxury segment. “Many mansion owners with properties in the $20-30 million range are now pivoting to high-end rentals, offering their homes at $150,000 to $250,000 per month.” This strategy, which he’s seeing increasingly among his clients, allows owners to generate income while awaiting more favorable market conditions.
Looking ahead, Malka anticipates a challenging 24 months for areas subject to the ULA tax, predicting a further 10-15% price correction. However, his overall outlook is more upbeat. “Beverly Hills should maintain its strength,” he says, citing ongoing development and increasing commercial activity as positive indicators.
With over $100 million in transactions under his belt since his career transition five years ago, Malka’s rapid rise in LA’s luxury real estate market has given him unique insights into its evolution. As the market continues to adjust to new realities, his ability to navigate both buyer and seller priorities across different market segments positions him well to guide clients through this transformed landscape.
Explore similar articles from Our Team of Experts.
The narrative around foreign investment in US real estate has been dominated by headlines about declining interest and regulatory barriers. However, companies operating in this space are exp...
