Friday, February 3, 2012

Westside Los Angeles Home Market Defies Gravity; Median Price Up 25.4% in Past 12 Months in Beverly Hills, Beverly Hills Post Office, Brentwood, Pacific Palisades, Santa Monica and Westwood; This, Despite Prices Dropping 1.3% Nationwide in Past Year

Median price of a Westside Los Angeles home rose 25.4%  in the past 12 months
While gloomy housing data saturates the Internets, what has been happening in the Westside Los Angeles home market?   Guess what folks, median price has been going up.  A lot.  

Median Home Price

Westside Los Angeles can be sliced and diced in many ways, but we included the following neighborhoods in our sample:
  • Beverly Hills
  • Beverly Hills Post Office
  • Brentwood
  • Pacific Palisades
  • Santa Monica
  • Westwood
From January 2011 to January 2012, the median home price in Westside Los Angeles increased from $1,485,000 to $1,862,000, a 25.4% rise in median price in 12 months.  

Quite a contrast to the 1.3% price decline in median price nationwide as reported by the Case Shiller Index.  

But remember, the Westside Los Angeles real estate market is unlike the market nationwide.  

The median sale price for a home nationwide in December was $169,000one-tenth the price of the average Westside home.
What does this mean? 

Increase in median price is due to many factors, and this 25.4% rise doesn't mean that the average home increased 25.4% in the past year.  
However, the implication is that Sellers can list their properties without worries that we're in a "real estate depression", and Buyers can purchase homes without panicking that they've assumed an enormous risk that will lead to their financial undoing.

The Months'  Supply of Inventory declined 13% from Jan 11 to Jan 12

Months' Supply of Inventory

From January 2011 to January 2012, the months' supply of inventory declined steadily from 9.3 months to 8.0 months -- 13%.  (Months' supply of inventory is a measure of how many months it would take to sell all the homes currently on the market.)

What does this mean? 

A six months' supply of inventory indicates a balanced market between buyers and sellers.  The 8.0 months' supply of inventory recorded in January 2012 means this is still a Buyers' market.  

Nevertheless, the overall trend is Buyers are losing market power, and the market is shifting in the direction of a Sellers' market.

What to do on the Westside this year?  Should I Buy, Should I Sell, Should I Rent?

Yes.  Yes.  And Yes.

The reality is that Westside homes are expensive and there is still a lot of uncertainty in the market.

Our message is, it's a fine time to buy, sell, or rent.  

And the message behind the message is: Fear Not.  Everything is actually OK out there in the streets.  The carnage is behind us.

We expect the market to gradually improve, month by month, as many of the structural real estate problems work their way through market

If you have questions about Westside Los Angeles real estate, please give us a call at (310) 845-6810 or email us by clicking on this link.