No matter what’s happening in the wider economy, both domestically and globally, it seems that the Los Angeles luxury property market remains a law unto itself, with continued strong growth shown in property sales in the first six months of 2016.
Figures published by LA real estate service Sotheby’s International Realty show that while while the various districts of the Southern California mega-city switched positions in the race for the title of top luxury market, the area as a whole showed a healthy level of activity.
Sotheby’s produce a quarterly report summarizing both the raw number and the monetary value of property sales across the whole of the Los Angeles and Southern California area, focusing on high luxury properties, which it defines as homes with a realized selling price of $3m or more.
Around a hundred such home sales are featured in each report, spread across highly sought-after districts including Beverly Hills, Santa Monica, Hollywood Hills, Malibu Beach, and the Pacific Palisades.
The latest report, released on June 16th 2016, showed that Brentwood led the way in overall sales numbers, with 31 properties sold in the previous three months, 7% up on the previous year, while Santa Monica showed the strongest growth with sales up 50% year on year.
Analysts put this dramatic surge down to the increased amount of amenities being developed in the Santa Monica area, which has helped turn the district into a self-sufficient location that retains a small neighborhood atmosphere, while still being within relatively easy reach of the city itself. The strong performance in Brentwood was attributed to the arrival of new inventory on the market, which provided a release valve for pent-up demand.
In terms of pure wealth, it seems that Malibu Beach is the area most coveted by purchasers, with an average sale price falling just shy of $9.5m in the three months leading up to the end of May 2016. This is nearly a million dollars ahead of the perhaps more internationally famous Beverly Hills, and a full 20% more expensive than the average selling price of the princely properties of Bel Air – an area that only six months earlier topped the sales price league with an average of over $11.2m.
The buoyant performance of the luxury end of the Los Angeles property market is in stark contrast to less exclusive sectors in the area, which saw a fall of 2% in sales volume over the back end of 2015. This comparatively poor performance lower down in the market has been put down to a general economic malaise combined with high property prices, neither of which appear to have been any obstacle to the higher end.
A further boost to the LA luxury market in 2016 is likely to have come from new regulations introduced in New York and Miami, requiring the identities of property speculators to be revealed for each sale in those cities. The lack of these new laws in Los Angeles is predicted to further increase its popularity among investors valuing discretion.
In any case, whether it’s private sales or property speculation driving the growth, it’s clear that Los Angeles and Southern California as a whole is the place to be for players in the luxury property market.