Sunday, March 9, 2008

West Hollywood Condo Market Round-Up: February 2008

West Hollywood Condo - Median Sale Price 2006 - 2008

(click on chart for more detail)

West Hollywood Condo Market -- Eighteen condos sold in West Hollywood in February 2008, below the monthly average of 32 condos per month recorded in the February 2007 - February 2008 period. The top sale was $1.24 million for a 1,700 sq ft architectural loft at Laurel and Santa Monica Blvd (1037 N Laurel, #20C). All seventeen other sales were less than $1 million.

Three indicators reveal that the West Hollywood condo market continues to trend up, in spite of the woes in the national real estate landscape. 1) The median sale price from February 2006 to February 2007 was $588,500; the median sale price February 2007 to February 2008 was $609,500 -- an increase of $21,000 or 3.6%. 2) The average $/sq ft increased from $566/sq ft in the '06 - '07 period to $570/sq ft in the '07 - '08 period. 3) Sales volume increased from 377 to 386 during the same period. Property values in West Hollywood are more or less marching up in sync with the CPI (Consumer Price Index.)

What will the fate of the West Hollywood condo market be in the next 12 - 24 months?

On the positive side, raising the conforming loan limit in Los Angeles County to $729,750 will dramatically increase the pool of buyers and their buyer power, supporting prices. Additionally, the West Hollywood sub-market remains "hot" -- the area attracts top retailers and companies, and with major upgrades at local hotels, is increasingly attracting business and leisure travelers. Property owners will benefit as the neighborhood continues to improve and evolve into LA's SoHo (with a little Chelsea thrown in.)

On the negative side, the high level of planning and development in the recent over-heated market could lead to an over-supply of product, diluting demand. Major projects are coming online at Sunset and Laurel, Fountain and Havenhurst, Norton and Sweetzer, Hancock and Santa Monica Boulevard; smaller developments dot the city (click here to see a map of properties under development in West Hollywood.) The current recession and the lack of visibility in the economy will also dampen demand.

The positive and negative forces should contribute to a lumpy market in which buyers and sellers are both able to find opportunities -- making for an exciting ride.