Understanding the Northeast L.A. Housing Market

Are real estate prices still climbing like crazy in Northeast L.A.? The short answer is yes.

But, the real question is, how long will it last, and should you wait to buy a home, or is it time? Read the article below, and you tell me... I will be comparing stats from 2015 to 2016, and breaking it down neighborhood by neighborhood.

I’m an MBA, so I love the numbers and tiny details. But today, I’m going to keep it super simple and only look at three numbers:

  • Number of New Listings
  • Number of Sales
  • Median Sales Price

“What is the median price?”
If you’re looking at 100 homes that have sold, take the sales price right in the middle (#50) and use that number, that’s the median. Sometimes average prices can be affected by one or two really big sales that throw off the numbers. This is best for when we want to get an understanding of what’s happening with “most homes”.

When it comes to Los Angeles real estate, every single neighborhood is doing something completely different, so let's start with a wide lens, and then zoom in:

L.A. County.

  • # of New Listings: No Change
  • # of Sales: Up 3%
  • $ Median Price: Up 6%

In laymen’s terms, there are the same amount of houses for sale, but more people looking for them. Increasing demand. This makes sense that the sales prices are increasing.

The City of Los Angeles.

  • # of New Listings: No Change
  • # of Sales: Down 4%
  • $ Median Price: Up 9%

This is interesting, and something we'll see in other specific neighborhoods: demand goes down, yet the median sales price is up.

Prices are rising and the number of sales going down could be for a number of reasons: more bad listings that just don't sell, affordability, buyers moving into other cities (Beverly Hills, Pasadena, etc.)

Northeast L.A.

  • # of New Listings: Down 3%
  • # of Sales: No Change
  • $ Median Price: Up 11%

The supply is down and demand is holding steady, obvious for prices to go up as much as they did. Let’s get some context about these sales prices:

  • $567,000 in 2014.
  • $629,000 in 2015.
  • $702,000 in 2016.
  • $780,000 in 2017?

It's not crazy to assume prices will go up that much--not at all. This trend just keeps going up nice and steady, and has for years and years...

Can you stand to lose out on $80,000 in value by waiting another year? Ask yourself these questions:

  • Are you still saving?
  • How much do you need?
  • Do you know how much you need?
  • More importantly, what’s going on with interest rates? Did you know they’re rising?

Now for the specific neighborhoods in Northeast L.A.

Silver Lake.

NELA's "golden boy".

  • # of New Listings: Down 5%
  • # of Sales: Down 3%
  • $ Median Price: Up 12%

Just like clockwork. This neighborhood has been at LEAST 10% appreciation each year for a very long time, and no signs of slowing down.

But if you're worried about the "real estate bubble", by all means, keep waiting. Sometimes these bubbles take 20 years to burst 🙂
***heavy sarcasm***

Highland Park.

Some people call it, the Next Silver Lake (to the dismay of people in Silver Lake), and the people in Highland Park hope it's true. Either way, the market is incredibly strong.

  • # of New Listings: Down 1%
  • # of Sales: Down 3%
  • $ Median Price: Up 9%

In addition, the days on market keeps getting shorter, and bidding wars are still commonplace.

If this really is the "next Silver Lake", there is a LOT of room for Highland Park to grow in the future. Last quarter, the median price was $710,000. Silver Lake was $1,017,000.

If this is Highland Park's future, are you going to be a part of it?

Eagle Rock.

Highland Park's big brother. Inventory is drying up pretty quickly making it hard to find a home.

  • # of New Listings: Down 11%
  • # of Sales: Up 6%
  • $ Median Price: Up 11%

The number of listings is WAY down which is a big deal.  Again, no surprise that the lower supply has fueled demand and pushed values up, but interestingly, even with skyrocketing values and less supply, the number of sales keeps increasing.

Homeowners: Sell your house already!

Mount Washington.

This neighborhood made headlines last year as one of the most popular neighborhoods for Los Angeles real estate.

  • # of New Listings: Down 5%
  • # of Sales: Down 12%
  • $ Median Price: Up 3%

Decreasing demand can come from several reasons, but I am leaning towards one in particular: Increasing List Prices!

In the last 3 years, the average List Price has jumped by 36%... which is a lot. No surprise that days on market has increased by 25%, meaning it's taking longer to sell homes. The list prices are "outrunning the market".

Selling expensive houses comes with challenges, but just know that whenever the average list price starts to get out of hand (which it is), the final sales prices usually go the opposite way... that means down...

I can feel you rolling your eyes at me.

Glassell Park.

This neighborhood doesn't get a lot of press, but it really should. Right next to Mount Washington, great views, a little more affordable, and a solid neighborhood value.

  • # of New Listings: Down 4%
  • # of Sales: Down 17%
  • $ Median Price: Up 14%

This neighborhood breaks all the rules, and values continue to climb. One reason... Sellers in Glassell park know to price a home! (You hear that, Mount Washington?)

Here’s the best part:
Sales prices are up 24% over the last three years. In fact, that's nothing out of the ordinary for Glassell Park. This neighborhood is a workhorse for home values. If you bought a house in 2010, your home value has just about doubled.

No awards, no fanfare, no viral articles or blog posts... just really solid real estate.

El Sereno.

Everyone's talking about it. This is the hottest neighborhood in Northeast L.A. right now.

  • # of New Listings: Down 2%
  • # of Sales: Up 9%
  • $ Median Price: Up 15%

There's a lot of demand in this scalding hot neighborhood. Over the last three years, sales prices are up 30%, and 46% from four years ago.

Just incredible.

The really interesting part? There's nothing to do in El Sereno yet! No restaurants, no places to grab a drink, only one little coffee place. But, as soon as that happens, you better hold onto something!

Median sales price in El Sereno last year was $490,000. It will probably be close to $550,000 in 2017. That means the typical homeowner will earn $60,000 in value just by paying their bills.

 

If you are a homeowner... this is great news because you are building wealth… But if you’re thinking of moving, just remember that the home you want to buy is appreciating just like yours. So time is of the essence!

If you are a buyer... it's time to put your name on something so you can enjoy these increases, too.

  • What can you afford?
  • How do you deal with down payments?
  • How do you buy a house?
  • Where do you start?
  • ... you start with me, so don't waste another day.

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