Is Now The Time to Buy Real Estate In Southern California?
Is now the time to buy in Pasadena, Silverlake, Los Feliz, Northeast LA?
How much have home prices gone up?
What type of home will be ensure my investment?
Do I have to overpay to get into a home?
What a wild ride 2020 has been. The global pandemic ground real estate to a near halt in mid-March and April, but then the market came back with a vengeance.
Those without outdoor space scrambled to find some, renters vacated creating voids, work from home became a vast reality and the simple fact of being trapped in one’s home for an extended period of time made people realize that they absolutely hate where they live. Despite what the media says there has not been the mass exodus like the media likes to portray. Los Angeles out migration was up by 40% to the tune of 13,000 move-outs.
The pause in sales, an ultra-low interest rate and newfound demand created a wave of buyers in a market that was already experiencing a shortage of inventory. 2019 had 50% fewer homes on the market in California and 2020 saw another drop of 45% in inventory.
We all know the economics class adage of supply and demand and we saw it happen. A bulk of listed homes received multiple offers, sometimes as many as 40 offers for one single property and with multiple offers a bidding war ensues and accepted offers going for $100,000 over list price were happening.
Despite all of this, these stats are purely allegory, it is the data that tells the true tale (and we all know how much I love my data).
How Much Have Prices Changed?
The media loves to tout housing value spikes and LA as a whole is up 14.8% year over year, but you are not buying a home in “all” of LA. You have to get granular to see the data as it pertains to you. Remember, home values in Malibu are far different than that in Altadena and the market is too.
Looking at sold data for prices, areas and types of homes I specialize in, $800k - $1.75M, Pre-1945 single-family homes in Pasadena, Los Feliz, Silverlake, Altadena, Northeast LA etc, there was actually a 1.8% drop in the average sales price. Granted there is less inventory, but there isn’t a dramatic spike in sales prices.
Pre-War Homes Under $1.75M
Looking at all single-family homes (means not including condo or townhouse) in these same areas, removing the price points and pre-war filters and we see some different numbers. All homes saw a 4.6% increase in value when compared to this same time period last year.
All Home Sales: Pasadena, Altadena, NELA, Silverlake etc.
Newer move-in ready homes saw the bulk of increases, as did luxury properties over $2 million. Neighborhood values should be looked at on a micro-neighborhood level. If you want to know the data surrounding the area you are looking to buy in, just ask.
What type of home is the safest to buy?
As always, there are solid investments to be had. Older homes that need remodeling is always a wise investment (see, my specialty goes beyond my passion for historic architecture) and the current climate is no different. A recent John Burns Home Value Index predicts home values in Los Angeles to continue to grow over the next three years (8% in 2021, 5% in 2022, 3% in 2023). So home value will continue to grow, remodeling will boost value if done properly.
Do I have to Overpay to Buy a Home Now?
Navigating the waters of competing offers and bidding wars is the biggest challenge, but one that a great realtor can guide you through. There are specific strategies to making offers competitive and ways to ensure you do not overpay while in escrow.
As an agent I work tirelessly to make sure my clients are buying the right house for the right price. The work it takes to make a compelling offer is vast and is not always about the highest price. Think about it, if a home receives 40 offers, there are 39 agents that had their offers rejected. You want an agent that will get your offer accepted.
My experience with Pre-War homes gives me a better handle on their value and what is involved when it comes to the condition of these homes.
The Pasadena and LA area real estate market is highly competitive, but with mortgage rates lower than they have ever been, now is the time to seriously consider that investment. Let’s be honest, the stock market isn’t going to put a roof over your head or relieve your stress.
Looking to Buy or Sell a Pre-War Home? Drop Me an Email for a Free Consultation.
Michael Robleto
REALTOR®-Compass Real Estate
213-595-4720
Michael Robleto is a Los Angeles based REALTOR® that specializes in Historic Pre-War residential properties and those with architectural merit. Michael uses his vast knowledge of historic homes, residential construction and modern day marketing to predict and solve the many problems that arise in real estate transactions. His client accolades of insight, prompt communication, integrity and hard work support the fact that he is not your average agent.
Michael leverages his personal passion for historic architecture to provide his clients the unknown insight on the pros and cons of older homes. Michael, the son of a contractor, a California native, grew up in an older Bungalow home and has spent 23 years in Southern California admiring the unique architecture of the region. Michael brings 20+ years of negotiation and sales experience to his seven year career in residential real estate. He often writes on homeownership strategy, historic residential architecture and related topics which can be found on Facebook, YouTube, Twitter and Instagram under the common profile name of his blog; BungalowAgent or at www.BunaglowAgent.com/blog.
Michael is a committee member and frequent volunteer for the preservation efforts of Pasadena Heritage and the LA Conservancy. When not working you can find Michael on hiking trails statewide with his faithful German Shepherd Axel.
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