Home sales are on the rise in L.A.’s wealthiest neighborhoods, but the prices on those sales are barely moving.
Those are the findings of a report on fourth quarter sales in downtown Los Angeles and several of the cities’ West Side neighborhoods by residential real estate brokerage Douglas Elliman.
The numbers paint a picture of a fairly healthy real estate market, but one in which sellers have lowered their expectations, according to study author Jonathan Miller, of appraisal firm Miller Samuel
Indeed, the gap between listed sale price and closing price in fourth quarter sales was 7.5 percent – the largest gap between listing and sales price in eight years.
“Buyers are not budging, and sellers are capitulating to market conditions,” Miller said.
There were 1,387 total residential sales in downtown Los Angeles plus west side neighborhoods including Beverly Hills, Bel Air, Holmby Hills, Brentwood, Century City, Westwood, Malibu, Santa Monica, Pacific Palisades and West Hollywood in the fourth quarter of 2019. That’s a 11.2 percent jump from 1,247 sales in the fourth quarter 2018 in those same L.A. submarkets.
The median sales price, meanwhile, inched up less than one percent last quarter to $1.51 million from $1.5 million a year prior.
The average price per square foot did increased a little more – 5.2 percent from $1,030 to $1,084 – though the average number was perhaps skewed by record-setting sales, including Lachlan Murdoch’s purchase of the Chartwell estate for $150 million ($6,000 a foot).
Those record-setting sales are reflected in the eye-popping numbers from the Bel Air/Holmby Hills sub-market, where the median sales price leaped 26 percent from Q4 2018 to $3.6 million last quarter.
But other submarkets hewed closer to the overall trend of more sales but not an accompanying jump in prices.
For example, in Brentwood, 39 homes sold in the fourth quarter compared to 32 in Q4 2018, but there was an accompanying 21.4 percent plunge in median sales price to $2.9 million.
Malibu, meanwhile, saw 55 homes sell in the last quarter compared to 42 in the 4th quarter 2018, but just a 3.4 percent increase in median sales to $3.0 million.
What is happening on L.A.’s west side is playing out in other wealthy markets across the country including the Hamptons, Aspen, Miami Beach, and Greenwich, Connecticut, according to Miller.
“We see a relatively healthy economy and low mortgage rates,” Miller said. However, buyers are hesitant to immediately snap up homes.
The trend, Miller said, is a “subtle but consistent change in the market’s direction.”