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Home prices grew the most in the past years in these LA neighborhoods

Posted on January 6, 2020 by Anthony Vulin in Beverly Hills, Glendale, Hollywood Hills, Market Update, Real Estate, Santa Monica, Silver Lake, Uncategorized, West Hollywood

In 2015, Chris Pouy’s realtor told him West Adams would be the next “it” neighborhood. Once he checked it out for himself, he didn’t have to be convinced. Central to the Westside and Downtown LA, its streets are lined with tall, bending palm trees and dotted with charming bungalows fronted by grassy lawns.

Pouy owned a loft in the Toy Factory, but the Arts District was getting “bougie,” and he wanted a home in a different neighborhood, this time with a backyard. He put offers in on six or seven houses—and was outbid on all of them.

“I had no idea it was going to be so competitive,” he says.

Then he found a three-bedroom, two-bathroom Craftsman with a swimming pool in neighboring Jefferson Park. It was listed at $599,000, and he remembers thinking: “If I don’t get this one, I might miss my window.” He wrote a letter to the seller and offered to match their highest offer. He scooped it up for $645,000. Today the property is estimated it could sell for $982,000.

“I’m thrilled,” Pouy says. “For me it was an investment, and you can’t really invest in a place in Hollywood or Venice, because those places have maxed out.”

For buyers like Pouy, the investment paid off. Home prices in Jefferson Park more than doubled this decade, with the median surging 184 percent, from $272,256 to $772,500, according to an analysis.

The 15 neighborhoods that saw the biggest price gains between 2010 and 2019. Most of the neighborhoods are in South Los Angeles, including Exposition Park, Vermont Square, Baldwin Hills, Crenshaw, Green Meadows, and Watts. The area south of the 10 Freeway has become increasingly attractive to buyers who have been priced out of Westside neighborhoods like Santa Monica and Venice.

“It’s the centrality. The transit accesses. It’s economic refugees who have washed in from other parts of the city,” says real estate agent Adam Janeiro. “If you had told me Jefferson Park or Leimert Park would routinely see sales prices over $1 million within this period of time, I didn’t anticipate that.”

Janeiro started selling homes in the area after buying his own home in West Adams 16 years ago, focusing on old homes and finding buyers who would appreciate them.

At that time, “real estate was Westside-centric, and I felt like these neighborhoods were really underrepresented.” When he started out, Janeiro said he would get referrals from agents in the big brokerages in Beverly Hills who “didn’t want to go down here,” because the commissions weren’t as big. “Now every major brokerage has someone here,” he says.

A decade ago, it was DIY buyers who had sought out West Adams, Janeiro says, because they wanted the original fabric and had the skills and desire to tackle the restoration of an early 20th century home.

“[Today’s buyers] want soaking tubs and huge crystalline kitchen surfaces. Now I’m representing children of dentists,” he says. “There’s a little less dirt under the fingernails.”

The demand has driven up home prices in a region where rates of homeownership have historically been low due to redlining, and where the population, which is predominately black and Latino, earns about 60 cents to every $1 earned by the average LA County resident.

In turn, rising prices have put “ownership further out of reach” for longtime residents, UCLA researcher Paul Ong concluded in a study released last year.

The other region that saw comparable gains: Northeast Los Angeles, particularly Highland Park and Cypress Park. There were also big increases in South Park and Elysian Valley.

“Once upon a time I could say: ‘Here’s where you can go to find a bargain,’” says Tracy Do, an agent who works primarily in Northeast Los Angeles. Now, she says, “all of these neighborhoods have become destination neighborhoods.”

In 2012, when interest rates dropped and the market kicked into appreciation mode, all of the listings she had held onto during the recession started going into escrow. There’s one house she says she’ll never forget: a three-bedroom, two-bathroom (what Do calls the “magic” bedroom and bathroom count) on Mt. Pleasant Street that she priced at $398,000.

It was a trust sale, and the trustee chose the highest of 73 offers: $542,000—all cash, no contingencies.

She started selling more and more to New Yorkers, especially those relocating from Brooklyn, and to doctors and lawyers, instead of artists and others working in creative fields. Buyers started looking for walkability—not hilltop homes—and appreciated neighborhoods with commercial districts.

Plus, with neighborhoods like Highland Park, buyers could get the same type of Craftsman or Spanish-style bungalow architecture that was similar to Echo Park and Los Feliz, neighborhoods that had already started to gentrify before the recession.

“Highland Park, you know during the downturn, it took the biggest hit in terms of pricing,” Do says. “You have to give credit to all the rehab builders. They came in and bought, gave the homes new systems, nice finishes. When Highland Park bounced back, it bounced back like nobody’s business.”

She’s increasingly telling clients that if they insist on buying in Highland Park or Eagle Rock but can’t afford it, to consider small-lot homes and condos instead of single-family houses.

“Where are the alternative neighborhoods now? That’s tough,” she says. “It was trending to El Sereno, Boyle Heights,” she says. “But for many buyers, the commute is too far.”

Janeiro says he’s “bullish” on “wonderful” neighborhoods that are father south of the 10 freeway, including Chesterfield Square and Vermont Square.

“It’s the same process that I used to have to do with West Adams to show that there was a modicum of safety, that included parking my car across the street and sitting with them in the car after dark, talking to neighbors,” he says.

But Janeiro says he has to remind them “we’re not looking at the pricing of 20 years ago.”

Where LA home prices increased the most

Rank Neighborhood Median sale price 2019 Sales number 2019 Median sale price 2010 Sales number 2010 Change
1 Jefferson Park $772,500 102 $272,256 111 184%
2 West Adams $775,000 121 $310,981 123 149%
3 Exposition Park $643,500 128 $268,735 174 139%
4 Elysian Valley $730,000 43 $313,328 36 133%
5 South Park $450,000 83 $194,216 157 132%
6 Adams – Normandie $795,000 39 $345,013 55 130%
7 Highland Park $797,250 314 $352,055 310 126%
8 Vermont Square $540,000 223 $246,439 308 119%
9 Baldwin Hills – Crenshaw $730,000 175 $334,452 219 118%
10 Green Meadows $415,000 203 $190,695 333 118%
11 Watts $382,000 217 $176,027 372 117%
12 Central – Alameda $435,000 115 $200,671 236 117%
13 Cypress Park $650,000 25 $301,592 32 116%
14 East Hollywood $920,000 86 $428,333 65 115%
15 North Inglewood $560,000 168 $261,107 243 114%

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