Friday, April 3, 2015

Huge Resale Housing Shortage in Certain Areas of Los Angeles - Time to Broaden Your Horizons

One area where I've lived and sold homes for sellers and buyers for many years is experiencing an enormous resale housing shortage. In the Los Angeles Realtor world, we call this region Area 19. Most of you know it as Miracle Mile and/or Beverly Center Grove. It actually comprises both. Area 19 is bounded roughly between Melrose Ave. to the north all the way down to Pico Blvd. to the south and La Cienega to the west and La Brea to the east.

Area 19 is pretty damn huge.

Early this morning, when I ran a search for all ACTIVE single family homes for sale in just area 19, the MLS showed only twenty-seven listings. TWENTY-SEVEN homes for sale in one of the
biggest areas of Los Angeles!!! I was stunned. I knew we had a lack of inventory and a lot of buyer demand, but this blew me away. Without hard statistics, I can report to you that there are easily in the high hundreds (maybe even thousands) of people looking right now to buy single family homes in Area 19 at any given point, and especially right now, which is traditionally our hottest and busiest season in real estate sales.

So imagine the competition you face when trying to buy a home in Miracle Mile/Beverly Center-Grove. Apply the economics of supply and demand and you can see why prices are soaring, especially in a region like Area 19 in Los Angeles. Just picture a few hundred people (and that's a very conservative number) going after the twenty-seven homes I found listed as ACTIVE in this region this morning. Things won't end well for everyone minus twenty-seven lucky buyers.

What's a buyer to do? Sit it out and wait? That could be a huge mistake, because this demand will inevitably send eager buyers to other areas where they will finally be successful in buying the home of their dreams. I know this, because many of my buyers have done this. And what impact does shifting their search to other regions have on those new areas? It decreases the supply of homes available in that new, outer area and the demand spreads like a virus and creates shortages in areas where there once were no shortages. I kid you not.

The lesson a buyer should learn from this frustrating and very real scenario is: BROADEN YOUR HORIZONS before it's too late. Stop focusing on one area. Drive around Los Angeles. Learn more about neighborhoods that you have never really explored but are just as convenient for commuting to work and surprisingly wonderful. There will be opportunities in the future for you to live in Miracle Mile/Beverly Center-Grove, if that's a must for you. If that's your dream. For now, if you want to buy a home in Los Angeles, let's widen your search.

Forget West Hollywood, which borders Area 19. West Hollywood only had twenty single family homes for sale on my morning's search of the MLS today. Horrifying. We need to go wider.

Area 41, known as Leimert Park and Park Hill Heights, had sixty-nine active single family homes listed when I checked this morning. This great neighborhood, which is located just south of Rodeo and east of Crenshaw, has seen a huge spike in sales over the last few months, and major home renovations from new buyers. There's a new shopping center going up where the old Ralphs supermarket stood at Crenshaw and Rodeo, and the Metro Line stops at Exposition and Crenshaw, taking you from downtown to Culver City and soon to Santa Monica. This is a huge up-and-coming neighborhood. I just got a young, newly-married couple into a totally remodeled home in this neighborhood for under $500,000. In fact, I've helped a few buyers over the last couple of years buy homes in this Leimert Park, and they are not only thrilled - they have already seen amazing equity growth in their investments. One client purchased a two-bedroom home for just over three hundred thousand a few years ago. Today, his home would sell for more than five hundred thousand.

You can also explore the possibility of looking over the hill in the Valley. With the 170 and 101 freeways and Metro lines, people living in the Valley can be in Downtown Los Angeles or Hollywood just as quickly as folks living on the west side. Sherman Oaks currently shows 106 single family homes listed for sale. North Hollywood has 67. Prices in these areas are not only more reasonable than the west side, they are more stable because there isn't the outrageous demand like there is in Area 19 over the hill.

So do you want a blood bath or a nice dip in a jacuzzi?

Visit Gerry Moylan's real estate website by clicking here