Median Sale up 18% in Los Angeles Neighborhoods Since January 2009 - Sales Velocity Increasing - Market in Strong Recovery

We periodically like to take a snapshot of the home market and to see how sales are trending in the Beverly Center - Miracle Mile, Hancock Park - Wilshire, Hollywood Hills East, Los Feliz, Silver Lake - Echo Park, Sunset Strip - Hollywood Hills West and West Hollywood neighborhoods.

The charts above and below focus on the percentage of houses in contract, which in our mind is a barometer for sales velocity -- the degree to which available properties are being purchased.

In the over-$1 million sector (above), we can see a defined low in approximately January 2009, during the worst throes of the financial crisis. Since then, the percentage of homes in contract has increased consistently, experiencing a defined bump in March 2010 when more than 12% of homes were in contract. Overall, the over-$1 million market has been on the slow upswing for over a year.

The under-$1 million market shows a similar trend. Sales reached a low point during the winter of 2008 - 2009 and have been increasing steadily since that time. These sales velocity charts tell a story that parallels that of the economy in general: month by month, since the financial maelstrom took its toll, the local housing market has been in recovery.

Pricing trends mirror those of sales velocity. The median sale price in these areas reached a low of around $880,000 during January 2009. Since then, the median sales price has been increasing steadily, attaining $1,040,000 in March 2010. This amounts to an 18% increase in median price in just over a year.

The data for this segment of Los Angeles fail to support the voices of doom about housing. The median sale price in a big chunk of LA is over $1 million and rising, sales velocity is increasing, and the oft-repeated comment that LA is a very expensive place to live is becoming more and more true each day.

Los Angeles Apartment Mkt 1st Quarter 2010: Trophy Hancock Park Buildings Trade at 11.4 GRM While Mid-Wilshire "Bread & Butter" Building Nets 7.5 GRM

The apartment market in West Hollywood, Hollywood, Hancock Park-Wilshire, Mid-Wilshire and Silver Lake - Echo Park during the 1st Quarter 2010 shows buildings trading from 7.5 - 12.6 GRM (and everything in between).

• West Hollywood - 11.7 - 12.6 (B Class, A Class)
  
• Hancock Park - 11.3 - 11.4 (A Class)
  
• Hollywood - 8.8 - 11.4 (B Class, A Class)
• Mid-Wilshire - 7.5 (B Class)
• Silver Lake - 11.2 (A Class)
  

It's noteworthy that A Class buildings in A neighborhoods are selling in the range of 11.2 - 12.6 GRM. (Roughly 5.5 - 8% cap / capitalization rate).

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If you have any questions about the Los Angeles income property market, please contact us by clicking on this link to send us an email or by calling us at (310) 845-6810.

You can also subscribe to our quarterly Los Angeles Investment Property Newsletter by clicking on this link. To see our 1st Quarter 2010 newsletter, click on this link.

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In West Hollywood, 1285 N Sweetzer Avenue sold for an 11.7 GRM. This building has 28 units, 22,804 sq ft of living area, and sold for $6.1 million with gross income of $520,000. 25 x 1 br, 2 x 2 br, 1 x 3 br. This large, well-maintained complex sets the bar for what investors can expect in an A-Class, A-quality neighborhood. It's interesting to note that the largest sale in Santa Monica during the 1st Quarter 2010 was also at an 11.7 GRM.

7703 Hampton Avenue in West Hollywood sold for a 12.6 GRM. This building has 9 units, 6,594 sq ft of living area, and sold for $2,032,000 with gross income of $162,000. 9 x 1 br. The building has no deferred maintenance and low (3%) vacancy.

Two sales in Hancock Park illustrate (1) what returns buyers can expect for a trophy/historic/architectural building; and (2) the consistency of returns in neighborhoods.

180 S Sycamore Avenue in Hancock Park sold for an 11.4 GRM. This building has 15 units, 12,966 sq ft of living area, and sold for $3.4 million with gross income of $299,000. 3 x 0 br, 9 x 1 br, 3 x 2 br. The building is in a much sought-after Spanish style in the much sought-after Hancock Park neighborhood.
100 N Sycamore Avenue in Hancock Park sold for an 11.3 GRM (vs. 11.4 above). This building has 13 units, 16,588 sq ft of living area, and sold for $3,050,000 with gross income of $269,000. 9 x 1 br, 4 x 2. This historic building qualifies for Mills Act property tax reduction (typically 20 - 50%). LA investors know the value of these prestige buildings (1920-30s), which never go out of style with renters.
Turning to Hollywood, we also find an 11.4 GRM for an A-Class building in an A-Class part of the neighborhood. 6824 Camrose Drive has 10 units, 7,478 sq ft of living area, and sold for $1.5 million with gross income of $131,000. 8 x 1 br, 2 x 2 br.

In urban part of Hollywood, like 7703 La Mirada Avenue, investors can get the best returns -- an 8.9 GRM on current rents. This building has 26 units, 18,201 sq ft of living area, and sold for $2.4 million with gross income of $273,300. 4 x 0 br, 20 x 1 br, 2 x 1 br. A "hands on" owner operator could capitalize on the 24% upside on the building's rents.

Another building offering excellent returns is 4100 West 1st Street in Mid-Wilshire, that sold at a low 7.5 GRM. This building has 23 units, 19,329 sq ft of living area, and sold for $2,185,000 with gross income of $291,000. 19 x 1 br, 4 x 2 br.

3821 Effie Street in Silver Lake sold for an 11.2 GRM. This building has 6 units, 5,310 sq ft of living area, and sold for $1,075,00 with gross income of $96,000. 6 x 1 br. Silver Lake and Echo Park remain a magnet for post-college renters and local investors like this type of small, easy-to-rent, easy-t0-manage complex.

Westside Income Q1 2010: Santa Monica's Allure Untarnished - Side-Lined Capital Seeks the Few Best-Priced, Best-Quality Assets

Multifamily properties in Santa Monica traded in the narrow band of 11.7 - 14.2 GRM during the 1st quarter of 2010. All of these properties were within 1 mile of the beach and offered the best combination of price, quality, and unit mix of those listed.

The short sales and foreclosures that have plagued the local residential market have not much impacted the Westside multifamily property sector. Most owners are well-capitalized and despite the fact that vacancies have crept up and rents have declined, few owners have been forced to liquidate their holdings.

There is great diversity of product on the market. We see the strongest interest in the few non-rent controlled buildings and B-or-better quality buildings in B+-or-better quality neighborhoods. We see the weakest interest in buildings that have below-market rent-controlled units and that are near Freeways or on major streets.

There is a flight to quality and the realization that we may not in our lifetimes see a 7% cap anywhere on the Westside.

1101 Bay Street in Santa Monica sold for an 11.7 GRM. This building has 16 units, 15,788 sq ft of living area, and sold for $3.2 million with gross income of $272,000. 8 x 1 br, 8 x 2 br.
1137 11th Street in Santa Monica sold for an 14.2 GRM. This building has 11 units, 13,913 sq ft of living area, and sold for $3.0 million with gross income of $212,000. 3 x 3 br, 6 x 2 br, 2 x 1 br.

908 4th Street in Santa Monica sold for an 13.1 GRM. This building has 18 units, 7,760 sq ft of living area, and sold for $2.98 million with gross income of $227,000. All units are singles. This is a non-rent-controlled building.
3728 Delmas Street in Palms-Mar Vista sold for an 11.4 GRM. This building has 8 units, 11,045 sq ft of living area, and sold for $2.1 million with gross income of $185,000. 2 x 3 br, 4 x 2 br, 2 x 1 br. This is a non-rent-controlled building, and we think this is the best deal of the quarter.
1257 9th Street in Palms-Mar Vista sold for a 14.4 GRM. This building has 5 units, 4,220 sq ft of living area, and sold for $1.3 million with gross income of $90,600. 1 x 2 br, 3 x 1 br, 1 x 0 br.

If you have any questions about income properties, please contact us by clicking on this link to send us an email or by calling us at (310) 845-6810.

You can also subscribe to our quarterly Los Angeles Investment Property Newsletter, by clicking on this link. To see a sample of the newsletter, click on this link.

Beverly West Residences on Wilshire: 35 DeLuxe Condos with Unobstructed Views by the Team that Brought You Burj Khalifa, Tallest Building in the World

Beverly West Residences at Wilshire and Club View Drive is nearing completion and will have a model unit open within a month.

Updated September 1, 2010: Beverly West is open for business.  If we were the Guide Michelin, we'd give Five Stars to the generous, custom 4,000 sq ft lower floor and 8,000 sq ft penthouse units.  We toured the amazing 14th floor model unit, took in the sights (and fairways) from the 17th floor unit, and saw how great private elevator access to your unit truly is.  See more pictures and read our full description by clicking on this link.

Beverly West distinguishes itself by offering: 1) Vistas over golf courses and views, views, views; 2) Entry and egress off Wilshire; 3) Intimate building with only 35 units; 4) Top design by Pasadena-based Keating/Khang; 5) Customization of every aspect of interior finishes.

The building is not for your ordinary buyer. Of the building's 35 units, only 4 are less than 3,500 sq ft (3rd and 4th floor 2 bedrooms with approx. 1,800 sq ft). Floors 5 - 16 have two 3-bedroom units per floor of approx. 4,000 sq ft. Floors 17 - 21 are single 4-bedroom penthouses of 8,000 sq ft. Prices for a mid-level unit are more than $5 million.

The competition is clear. The Century (140 units) offers a Century City location and Robert Stern design. The Carlyle (81 units) offers a Wilshire location and Fendi Casa interiors. Each building is impressive in its own right.

But for those who dream to peer over the fairway and to see the majestic mountains and towers of Los Angeles, come to the Beverly West -- you'll found an idyllic place to call home.

Beverly West
1200 Club View Drive 90024

Emaar Properties

Silver Lake / Echo Park Market Sizzles - Median Price Up 125% Since March 2009 - Home Inventory Down 67% - Updated Homes Sell at $500 - $550/sq ft

The Silver Lake / Echo Park market was one of the first neighborhoods that we fell in love with when we moved to Los Angeles. We had moved from Lower Manhattan, and found that the bohemian - creative - edginess of New York had a parallel life in this eclectic neighborhood wedged between Los Feliz, Hollywood and Downtown.

But don't be fooled by the hip, casual atmosphere. The real estate market is highly competitive and has tightened considerably since the slackest days of the foreclosure crisis. We were honored to have been interviewed on the subject by the Los Feliz Ledger, a newspaper we love and admire:

“I represent some older clients who live in that area and it’s been bohemian for 80 years when the movie studios were first out there. I think it always attracted that kind of person. The [home] prices… are stratospheric. But profile buyers young or old like that vibe,” said Adner, the real estate agent.

As the trendy youth continue to set up camp in Silver Lake, Adner predicts the trends in real estate will only go up.

“If the trend continues, home prices are going to go up quite dramatically… like [homes] near [the] Beverly Center. Silver Lake always was and is officially now the east village of Los Angeles,” he said.

Consider these bewildering statistics about the Silver Lake / Echo Park market comparing March 2009 data to March 2010 data:

• 60% increase in # of houses under contract
• 44% decrease in # of houses for sale
• 67% decrease in residual inventory
• Median price March 2009: $340,000 (market was almost exclusively foreclosures)
• Median price March 2010: $768,500 (125% increase!)
  
• Months supply of inventory March 2009: 5.9
• Months supply of inventory March 2010: 3.3

Month-to-month data can be deceiving, but the overall trend is apparent: Silver Lake / Echo Park continues to be the best quality - best located - most affordable - most sought-after neighborhood in the Beach-to-Downtown corridor. Below are highlights of some sales in 2010.

2039 Micheltorena Street, a 5 bedroom, 5 bath, 3,643 sq ft Spanish pool home on a 12,588 sq ft lot (with this killer view!) sold for $1,350,000, and was the only home to sell for over $1 million.

Some of the better properties in the area are selling for a lofty $550/sq ft. 2667 Lake View Terrace, close to the Silver Lake reservoir, sold for $971,000. The house has a scant 2 bedrooms, 1.75 baths, 1,762 sq ft on a 5,837 sq ft street-to-street lot.

What a difference a couple of years makes. This home at 2533 Ivan Hill Terrace (one of five homes built by BUILT) was originally put on the market in 2006 at $1,075,000, then lowered in 2007 to $979,000. Cut to a couple years later and the houses became short sales and this one was listed at $675,000. Selling price was $750,000. With 3 bedrooms, 2.5 baths and 1,500 sq ft of living area, the house sold for $500/sq ft.

Now, to illustrate how strong the demand is even for the most diminutive properties, let's jump to a little home, off the beaten track, in a quaint Echo Park neighborhood. 1818 Berkeley Avenue has 2 bedrooms, 1 bath, and 550 (!) sq ft of living area on a 2,400 sq ft lot. Asking price? $299,000. Sale price: $325,000. Days on market: 14. This real estate market is anything but "laid back."

751 N Fairfax Avenue - Lofts at Cherokee Studios Brings Sophisticated Pugh + Scarpa Design and "Green" LEED Platinum to West Hollywood

There's a lot to fall in love with at the Lofts @ Cherokee Studios, an eco-friendly project at 751 N Farifax Avenue in the West Hollywood area.

Twelve unique floorplans have been carved out from this site, ranging in size from a 1,197 sq ft 2 br - 1 ba lower floor unit to a 2,275 sq ft 3 bd - 2.5 ba two-level penthouse unit.

Updated September 2, 2010: Adner Realty Group is pleased to announce that we are representing the first buyer in escrow for this esteemed project!   There are still 11 great floorplans to choose from.  Prices have been lowered across the board, and range from $549,000 - $999,000.

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Adner Realty Group has its finger on the pulse of the Los Angeles condo market. If you have questions about Cherokee Lofts or other buildings, please call us at (310) 845-6810 or email us by clicking on this link.

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All units surround a central courtyard, which has a network of intersecting walkways.

What is not visible at a first glance is the astounding list of green features, which includes:

• High-efficiency air filtration, double walls with two layers of sound insulation, 20kW solar electric array by Kyocera, electric car charging capabilities for every unit, high efficiency tankless water heaters, high efficiency Variable Refrigerant Flow Heating and Cooling System by Mitsubishi ... (the list goes on!)
  

One of the two penthouses (#6) shows off the Forest Stewardship Council (FSC) certified oak flooring and kitchen tiles made from recycled skateboards (very cool, never seen anything like it).

Kitchens and bathrooms feature Erin Adams Design and Walker Zanger tiles giving each unit and each room a signature look. Ranges are from Bertazzoni and all other appliances are high-end stainless steel. (Unit #7 shown here).

A second penthouse unit (#8) showcases the great design of Pugh + Scarpa Architects, who thought about how to maximize light and create open, well-ventilated spaces.

The lower floor of Unit #8 showcases additional living area, which is considered the third bedroom.

Bathrooms are high-end and are separated from the bedrooms by a sliding glass panel.

Although the front of the building faces busy Fairfax Avenue, units facing the rear look westwards, offering some great views of the hills.

The capstone to the project is the "living" green roof with drought-resistant landscaping.

Lofts @ Cherokee Studios is an incredible work of contemporary design and environmentally-friendly living. The only trade-off is that it's located on a major thoroughfare. For those undeterred by living on this axis, this project is certain to rank as a long-lasting standard of quality living in the West Hollywood area.

Lofts @ Cherokee Studios
751 N Fairfax Avenue
Los Angeles, California 90046

Sold by deasy/penner and partners