The big news in California and the especially hot Northeast Los Angeles real estate market this year: welcome back. Welcome back to the mid 00’s. Home prices in Los Angeles County now equal or exceed those seen at the high-point of the market in 2006/2007 in most parts of town. Historically, home prices in California go up for a while and then they go down for a while. Every time they go back up the peak of the market is higher than the previous one. We are seeing that happen right now as property values and sales prices are hitting new highs in many neighborhoods.
The real estate market on what we loosely call the Eastside of Los Angeles last peaked in 2006/2007, crashed hard in 2008/2009, then “bounced along the bottom” from 2009 until the economic recovery started in late 2012. Prices started rising in most neighborhoods at the end of 2012 and have continued their ascent throughout 2013 and 2014.
2015 Real Estate Market Outlook
Will prices continue to rise in Los Angeles? Have they peaked? Is it a bubble? I’m not psychic, but all of the signals I see indicate prices will continue to rise in every Northeast Los Angeles neighborhood from Silver Lake to El Sereno, Echo Park to Eagle Rock, and everything in between. In an effort to figure it all out and put it all in perspective, here are the stats on 11 Eastside Los Angeles neighborhoods along with my perspective. Here are the ‘hoods in alphabetical order:
Atwater Village home prices are 46% higher than they were at the bottom of the market in the dark and already-forgotten days of the Great Recession. The low point was 2012 when the average sales price per square foot fell below $350, now we are close to $500. The average sales price of $672,630 in 2014 was the 2nd highest of any of the 11 neighborhoods in NELA, right behind Silver Lake and higher than Echo Park. Like most neighborhoods on the Eastside, fewer homes were sold in Atwater Village in 2014 than in 2013. Not because fewer people wanted to buy or were able to buy, that’s for sure. There is still a distinct lack of inventory of homes for sale in Atwater Village and throughout Los Angeles.
Atwater Village is the most undervalued neighborhood of the 11 mentioned here and the one with the most potential for property value appreciation over the next few years, in my opinion. Why are homes in Atwater likely to appreciate more than those in other neighborhoods? Mostly because of what will happen at the water. The long-ignored Los Angeles River is being reimagined as an inviting public space with parks and other amenities along its banks. Given that the project is executed well, the L.A. River path may just be Atwater’s equivalent of the Runyon Canyon trails or the Silver Lake Reservoir jogging path. Expect big things here and in Elysian Valley, A.K.A. Frogtown, once the riverfront transformation occurs.
Cypress Park is one of the more affordable NELA (Northeast Los Angeles) neighborhoods. Although the gentrification in the neighborhood is not as visiblre as in neighboring Highland Park, it is happening and the 17% year-over-year increase in price-per-square-foot is among the highest of the areas surveyed here.
Like Atwater Village, Cypress Park will benefit from the L.A. River’s parkification via the significant amount of riverfront parkland expected to be included in the project. With its central location close to Downtown Los Angeles and comparatively affordable prices, Cypress Park homes will continue to increase in value in 2015.
The average price of a home sold in Eagle Rock grew by 15% in 2014, 16% in 2013, and are up a whopping 45% from their low point in 2011. Average sales price per square foot numbers are slightly lower than the peak of Eagle Rock’s market in 2006, but the average selling price has never been higher. 10 homes in Eagle Rock sold for $1 million or more in 2014. There had not been a million dollar sale in Eagle Rock since 2011. Wow.
I expect prices in Eagle Rock to continue to rise in 2015 in line with the increases in the surrounding neighborhoods.
If you own a home in Echo Park its value has almost certainly increased since you bought it. The average price an Echo Park home sold for in 2014 was 26% above 2013’s numbers, and prices have risen more than 60% since their bottom in 2011. Only Silver Lake saw a bigger dollar amount increase in the average home sales price in 2014.
While Echo Park home prices have risen dramatically in the past three years, there is still room to go and prices will continue to climb in 2015. With an average sales price about $400,000 less than in neighboring Silver Lake, Echo Park is the first choice for those priced out of Silver Lake.
El Sereno’s average home sale was 13% higher than 2013, yet prices still remain below the peak years of 2006 & 2007. A very low supply of homes on the market in El Sereno continues to frustrate buyers looking to buy.
Prices will rise in El Sereno in 2015. Neighborhoods such as University Hills, Hillside Village and the Short Line Villa Tract are where great homes at low prices can still be found.
Glassell Park ranks number 6 of the 11 Eastside-ish neighborhoods included in this analysis when looking at average sales price – 5 neighborhoods are more expensive, 5 are less expensive. Sitting firmly in the middle of the pack with an average price of $562,153, Glassell Park gives us the median average. A crippling lack of homes for sale characterizes the current market in the neighborhood. The 24% drop in the number of single-family homes sold in 2014 represents the largest percentage drop of all.
Prices are bound to rise in Glassell Park in 2015, if any comes are put up for sale. Neighborhoods such as Sagamore Park are more than ready for their close-ups.
Exciting changes are happening at a good clip in Highland Park these days. The neighborhood’s rapid gentrification is the talk of the town and the subject of major media coverage on a daily basis, it seems. All of the attention has given Highland Park another boost to its already high profile with potential homeowners and investors alike.Highland Park is one of two neighborhoods surveyed that posted double-digit percentage growth in all 3 categories (Montecito Heights is the other one)
2015 will bring more new residents and higher home prices to Highland Park. More and better neighborhood amenities and the comparatively-low prices will continue to attract more home buyers than there will be sellers.
Lincoln Heights is the least expensive neighborhood of the 11 surveyed. The average price for a home is around $350,000 in Lincoln Heights, which nearly gives a buyer a lower monthly principal and interest payment than a comparable rental property would cost.
75% of Lincoln Heights residents are renters and there are usually fewer than 50 homes sold in the neighborhood annually. What few properties do come on the market appeal to many buyers and investors alike, prices will inevitably continue to rise.
montecito HEIGHTS & Monterey Hills
Montecito Heights and Monterey Hills combined to sell about 5 homes a month in 2014. Montecito Heights, in particular, is a real gem of a neighborhood with its own quirky sensibilities and unique features. The word is getting out, the area is in high demand, the number of homes sold, the average sales price, and the average price per square foot all posted double-digit percentage increases in 2014.
What will 2015 bring? Prices will continue to increase.
High buyer demand and low seller supply drove prices up again in Mount Washington in 2014. House values in Mt. Washington are back up at 2006/2007’s levels.
All signs point to continued property value increases in Mount Washington for the coming year. The wave of gentrification is heading East.
The real estate market in Silver Lake shifted into overdrive in 2014 as home prices hit their highest prices ever. John Lautner’s mid-century modern masterpiece Silvertop became the most expensive home ever sold in Silver Lake, selling at more than $1 million over its asking price of $7.5 million. More than 70 homes sold above $1 million in Silver Lake, with most of these being in the coveted Moreno Highlands area. The average price of a home in Silver Lake is now more than $1 million.
Can home prices in Silver Lake go any higher? Yes, and I expect we will see prices to continue to climb higher in 2015. Silver Lake has an undeniable appeal for creatives. People living West of Western have discovered the neighborhood’s amenities and are beginning to realize the quality of life can be much better on the Eastside. Expect more of the same in 2015.