As everyone prepares to say goodbye to 2017, we wanted to take a closer look at what the year was like in Los Angeles home buying. To do so, we analyzed data on the Open Listings platform from more than 8,872 home sales across urban Los Angeles over the last year.
How did home sales play out for buyers throughout the year?
After ringing in the last new year with 601 home sales in January 2017, sales slowly increased month-over-month before peaking in June with 1,041 home sales.
That was the busiest home sales month of the year in Los Angeles, followed by August (991 home sales) and May (931 home sales).
When digging into which markets were the busiest for homebuyers in terms of properties sold, West Hollywood topped the list with 494 home sales. It was followed by Highland Park (487) and Brentwood (471).
So what do these busy buyer markets have in common?
West Hollywood certainly has lots of condos for sale like this one. That was likely a driving factor in pushing up the number of sales. One or two bedrooms that are on the market for under 1 million move fast. However, homes in the area go for multi-millions, which brings up the median sale price for the year in West Hollywood to $1.2M.
Next on the list — Highland Park. Highland Park has experienced rapid gentrification over the last several years and has become a hot real estate market in NELA. However, with 487 sales in 2017, there may be more home inventory in the neighborhood than many believed was possible.
It doesn’t look like buyers are completely priced out of the market yet either.
In addition to being one of the most active homebuyer neighborhoods we analyzed, it also ranked as one of the most competitive buyer neighborhoods. With sales going at a median price of $645,000, homebuyers in the neighborhood were paying 2.54% on average over listing in 2017.
Furthermore, if homebuyers didn’t act quickly, the home they were looking at was gone. The median time on market for a home in Highland Park was 13 days in 2017. With the neighborhood's proximity to the Gold Line and artistic mix of craftsman homes, don't expect Highland Park's homebuying heat to cool down in 2018.
The top three most active markets in 2017 wraps up in Brentwood, the famous upscale neighborhood on the west side of Los Angeles. The fact that Brentwood also came in as the second highest priced neighborhood that we analyzed shows the continued demand for luxury homes in Los Angeles.
Residents in Brentwood even have a new neighbor in Lebron James, who recently purchased a $23M home in the neighborhood. However, while buyers paid a median of $1,900,000 in 2017, sellers in Brentwood often received offers below listing prices. That means the neighborhood could continue to be a buyers market in 2018 for wealthy individuals interested in a ‘deal.’
Luxury living in LA continues to thrive
The only area or neighborhood with a higher median sale price than Brentwood in 2017 was Beverly Hills. The median price for the iconic 90210 area code nearly doubled the median price in Brentwood at $3,630,000 for the 267 sales recorded in the area.
Compare that with the median house price across Los Angeles County, which is $560,000, according to the U.S. Department of Housing and Urban Development.
However, despite that sky-high sales prices in Beverly Hills, there may actually be some deals to be had. More on that in a moment...
You only have to move slightly east to Beverly Grove and the 90048 zip code to find the next most expensive neighborhood for Los Angeles homebuyers in 2017. The median sale price in Beverly Grove was $1,501,000 over the last year as buyers target one of the most conveniently located neighborhoods in perhaps the city as a whole.
Given the central location, wealthy buyers in this neighborhood certainly don’t get the same amount of space they could get in luxury neighborhoods on the outskirts of the city. However, pulling down older homes on multiple lots and building larger new homes has certainly become more common in Beverly Grove to make space.
Regardless of if they are buying renovated or completely new homes in the area, buyers are willing to pay a premium price for walking to some of the best restaurants and shopping locations in the city.
The homebuying heat is on
From homes with high tags, we transition to the neighborhoods of urban Los Angeles where there's often a scarcity of inventory, and bidding wars drive sales prices above asking price.
In these neighborhoods, homes fly off the market before many buyers even realize they were listed.
To determine the neighborhoods to make our list of LA's most compettive homebuying neighborhoods, we took the areas with the lowest median days on market and then used the percentage difference between the final sale price and the listing price as the tiebreaker.
The homes in these neighborhoods are often priced with many buyers in mind. Hence, more people, more demand.
But, it's important to note that some of the ‘over asking price’ data may be inflated by sellers and their agents who may list homes well below the going neighborhood rate. By pricing it this way, they get multiple offers quickly upon listing and can use all the best terms of each offer received to cultivate a pricing war.
Topping the list was the north side of Baldwin Hills and the west side of Crenshaw. The hilly terrain of this Southland neighborhood, which borders Culver City to the west, is becoming a new hotspot for young and first-time buyers as the area gentrifies.
This will only be accelerated by the introduction of the Crenshaw Line in 2019, which will give residents easy public transport to Silicon Beach, Downtown and LAX.
The median sale price for Baldwin Hills based on 279 sales throughout the year was $665,000. With it being one of the few neighborhoods we analyzed under $700K in median sales, it’s no surprise then that buyers are clamoring for inventory in the neighborhood.
The median days on market for Baldwin Hills was 12 days in 2017 and buyers paid 3.30% over asking price on average. That asking price increases as you head south and east of Kenneth Hahn State Recreation Park and into Baldwin Village. The median sale price in this more eastern area is along the lines of $715,000.
Next on our list was Mar Vista. The price tag in this competitive market swelled to a $1,299,500 median sale price. A few years ago that median would have been well under 1 million. Of course, Mar Vista also made our most active markets of 2017 with 403 recorded sales.
Although it appears there was a lot of homes on the market, they were moving just as fast as they were coming on. Homes typically sat less than two weeks on the market, and buyers were most often paying above asking price. This can be expected as the rush towards Silicon Beach on the west side of Los Angeles continues to increase housing demand in this neighborhood.
With Snapchat recently taking out a five-year lease for nearly 80,000 square feet of office space at the Santa Monica Airport (which borders Mar Vista to the north), this won’t change in 2018. In addition, and similar to Beverly Grove, the area is seeing a lot of large new houses going into the neighborhood as older homes are torn down and technology workers look for newer amenities.
Rounding out our list of “multiple bid markets” was Sawtelle Japantown. Just a bit north of Mar Vista, and to the east of Santa Monica and the southeast of Brentwood, this neighborhood was once known as "Little Osaka" for its predominantly Japanese residents. Today, its proximity to Silicon Beach has made it a hotspot for buyers, with sales in 2017 going for 1.42% over asking price on average.
However, unlike Mar Vista, it does look like you have a better shot a getting a home under a million in the neighborhood.
The median sale price for the year was $905,000 in Sawtelle.
With Westwood and UCLA to the north, the area has also become a good area to buy in for university faculty and employees. That said, there is far less housing inventory available in Sawtelle than Mar Vista, so buyers need to keep an eye out for any listings. We only recorded 296 home sales in the neighborhood for 2017.
A buyer's market in Los Angeles?
On the flip side of ultra-competitive markets where bidding wars are driving up prices, we also wanted to take a look at areas where buyers are most often paying under listing prices.
Could there actually be "deals" in Los Angeles housing?
It depends on what your housing budget is.
Topping the list is a market that is really only feasible for high net worth individuals. As we noted earlier, Beverly Hills was the most expensive neighborhood we analyzed in 2017 when it came to median sale prices.
However, despite homes going for $3,630,750 in 2017, final sales were 4.44% under the asking price on average.
Of course, with high priced luxury homes, the difference between what a seller is looking for versus what a buyer is willing to pay is most often measured in hundreds of thousands of dollars versus tens of thousands of dollars. This leeway can lead to sometimes paying a good deal under asking price.
Next, on the list, we move from one of Los Angeles’s highest-priced neighborhoods to one of its lowest priced ones. Due east of Dodger Stadium and across the Los Angeles River is Lincoln Heights.
Historically, crime rates may have kept buyers away from this eastside neighborhood, but signs point to the neighborhood starting to transition. Hip coffee shops and craft beer destinations have started to move in. There are fixer-uppers available for under $500K, so now may be your time.
Rounding out our top three buyers neighborhoods was the Hollywood Hills. Long known as the desired residential neighborhood for celebrities and soon-to-famous actors and musicians, the neighborhood actually offered some deals to those that could stomach the $1.3M median sales price in 2017.