California's mansion tax gives luxury homebuyers the upper hand.

Luxury homebuyers in Los Angeles have the upper hand as there is a good amount of inventory available, with 400 listings for single families over $5 million. However, the recent "mansion tax" imposed by Los Angeles City has dented demand for houses over that threshold, with only two properties sold in April over $5 million. The tax added an extra 4% in taxes for properties sold over $5 million and 5.5% on properties sold over $10 million. Despite this, there are signs that buyers are coming back, with May being the strongest month for closings and June looking to double that.