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5 Things to Know about the Mt. Washington Real Estate Market

Mount Washington real estate is hot right now. Great views, cheaper than most hillside neighborhoods in L.A., wonderful architecture (mid-century modern, craftsman, and Spanish), and increasing values make it very popular.

Let’s talk about what this means for buyers and sellers.

1. If you bought in Mount Washington last year, you have doubled your money.

Quick real estate math… Let’s say you bought your home in March of 2015. The average sales price that month was $730,000. Fast forward 12 months, and the average price in March 2016 was 840,000.

So back in 2015, assume you paid $730,000 and put 20% down which was $150,000. Your home’s value went up by $110,000 in one year, which means you just made a 75% return on your investment. That’s almost double your money. That beats the hell out of Wall Street!

lease know, I am not misleading you, or picking perfect numbers to make a point. These are actually conservative numbers. In fact, there was an even bigger increase if you use the median sales prices, 699k and 830k.

2. Get ready for sloppy listings this summer.

In Mount Washington, we have been seeing “hot and cold” value appreciation every other year:

  • 2011 - Average price, $440,000 - The bottom of the market

  • 2012 - $450,000 - 3% increase

  • 2013 - $575,000 - 25% increase

  • 2014 - $620,000 - 7% increase

  • 2015 - $750,000 - 20% increase

  • 2016 - The average sales price so far is $750,000.

This leads me to believe we’ll see a slow year (compared to a giant 20% increase in 2015).

Here’s why: After a giant year in 2015, we’re going to see a lot of sellers jumping on the bandwagon to sell. Unfortunately, a portion of those sellers might be a little unreasonable with pricing and getting the home ready to sell. This results in alternating “hot and cold” markets.

If you are seriously considering buying real estate in Los Angeles, and you aren’t talking with an agent yet, you are losing money.

We’ll probably see longer days on market and a few price reductions which is good for buyers, but this comes with a cost. Even though the homes are move-in ready, most will need repairs. As a seller, if you are smart and reasonable, time the market correctly, price accordingly, and get your home in “selling condition”, and listen to your agent, you will reap the rewards.

3. Values are not done appreciating in Mount Washington.

Even with the hot and cold micro-markets, Mount Washington real estate is red hot with popularity, so I estimate we’ll see a “modest” 10% increase from last year in average sales prices. But also, developers have been busy constructing giant hillside homes, and my guess is we’ll see the first $2 Million listing this year.

In just one year, you made a 75% return on your investment. That’s almost double your money.

If we can look at more prominent Northeast L.A. neighborhoods as a “real estate crystal ball” (like Silver Lake), even after their rapid increases in value, they regroup and increase again. They’ve gone through these kinds of “pricing paradigm shifts” three times already since the late-1990, and they have plenty of room to grow.

4. Get ready for fierce competition in the buyer’s market.

If you haven’t heard, there is a housing crisis out there, and it’s hard to find a home you can afford, and like!

In fact, if you’ve been looking at homes for a while, I bet you’ve seen the same people at all the open houses you go to. When this process takes months, buyers get frustrated. When buyers write strong offers way over asking price and still lose, they get even more frustrated.

That’s when the “Bully Offers” start to come in. Ever see a house that has been on the market for 45 days, gets one offer and sells for 10% over asking price? You know someone was tired of losing offers and went in for the kill. The Bully Offer is a great move if you’re motivated enough.

5. If you can’t afford a home, move to the next hot neighborhood.

The great thing about Northeast L.A. (Mount Washington, Highland Park, Eagle Rock, etc.) is that there are a bunch of neighborhoods in many different price ranges and different phases of “up-and-coming”.

If you get in early enough, you can watch the prices rise like homeowners saw in Mount Washington last year when they doubled their money in 12 months. The longer you wait, the more expensive these homes get. After this summer, you might find yourself priced out entirely. We call this a “disappearing price range”.

Final Thoughts

If you are seriously considering buying real estate in Los Angeles, and you aren’t talking with an agent yet, you are losing money.

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