Luxury market rebounds in some LA submarkets, while median home sales hit record

Non-luxury, single family home sales hit record $1.6M median price

TRD LOS ANGELES /
Oct.October 24, 2019 08:00 AM
A 24,000-square-foot home in Beverly Hills Post Office
A 24,000-square-foot home in Beverly Hills Post Office

Though several of L.A.’s poshest neighborhoods have rebounded from earlier this year to command higher prices, softness in the single-family luxury market remains, with fewer sales and declining inventory.

Meanwhile, the non-luxury market in Greater L.A. is hitting on all cylinders.
In the non-luxury market from July to September, the median price for single-family sales in Greater L.A. rose 1.6 percent year-over-year to $1.5 million, a record.

The number of overall sales in Greater L.A. over the past year declined 3.6 percent to 1,543, while the days on market was 58, up from 54 over the same period, according to the latest market report from Douglas Elliman.

“While reaching a new overall price record (in the non-luxury market), sales continued to slip,” said Stephen Kotler, chief executive officer of the western region for brokerage firm Douglas Elliman.

The luxury market paints a different trend.

In the third quarter, 80 luxury homes sold, a 2.4 percent decline from the same time last year. But the quarter saw a steeper 8 percent decline from the second quarter, when 87 luxury homes sold.

However, the median sales price in the luxury market, which Elliman defines as the upper 10 percent of all its listings, rose 8.8 percent year-over-year to $9.4 million, and less than 1 percent (0.4 percent) from its second quarter median sales price of $9.32 million.

The number of days on market fell 14.9 percent from the second quarter, but was up 8.1 percent from a year-ago period.

“The seller is becoming more realistic about pricing, so you see the demand is pretty strong in some submarkets,” Kotler observed.

He cited stronger sale prices in the Beverly Hills Post Office and Malibu areas as cases in point.

In September, a 24,000-square-foot home in Beverly Hills Post Office built by developer Max J. Fowles-Pazdro and London & Regional Properties sold for $43 million, according to the Wall Street Journal.

That’s just $3.5 million below its initial asking price when it hit the market in April.

Kotler said that Malibu had experienced a slowdown in expensive home sales last year with the threat of fires in the pricey coastal city and nearby Palisades. Last year’s historic fires in Malibu burned nearly 100,000 acres of land and destroyed over 1,600 structures.

The fires damaged the luxury real estate market and figures reported earlier reflected this trend. “There was a big slowdown in the overall market last year,” Kotler said.

From July to September, the median sales price for luxury home sales in the Malibu Beach area shows “aspirational buyers” dipping their toes back in the market, Kotler said.

While 12 luxury homes sold, a 45.5 percent decline from a year ago, the median sales price was $9.9 million, up 135 percent from the $4.2 million median sales price a year earlier.

Kotler also pointed at newly built condominiums in the Greater L.A. luxury market as showing strong demand in the third quarter versus the second one. The median sales price for newly built condos rose 17.1 percent in the third quarter to $2.2 million versus $1.9 million in the second quarter.

He attributed the spike to selling condos at the West Hollywood Edition, built by Witkoff Group and New Valley Group. New Valley is run by Howard Lorber, chairman of Elliman.

The 13-story luxury hotel and condo development is on the Sunset Strip off Doheny Drive, at 9040 Sunset Boulevard. The project marks Witkoff Group CEO and founder Steven Witkoff’s first development in Los Angeles.

Kotler said that the number of sales closed for newly built luxury condos in L.A. rose 56.1 percent in the third quarter with 89 deals, versus 57 seen in the same 2018 period.

“L.A. is having a moment,” Kotler said. “The quality of living is great.”

Trends
“While reaching a new overall price record, sales continued to slip.”

  • Median sales price set new record, exceeding the last record set in the prior-year quarter
  • Listing inventory rose year over year for the sixth straight quarter
  • All price trend indicators rose year over year for the second straight quarter
  • The number of sales has declined annually for the sixth consecutive quarter
  • Luxury single-family listing inventory has fallen year over year for three of the past four quarters
  • Luxury condo median sales price expanded annually for the fifth consecutive quarter

Key Trend Metrics (compared to same year ago period)

  • Median sales price rose 1.6% to $1,549,000 [record]
  • Number of sales declined 3.6% to 1,543
  • Days on market was 58, up from 54
  • Listing discount was 5.6%, up from 3.2%
  • Listing inventory increased 6% to 3,283

LA SUBMARKETS

MALIBU/MALIBU BEACH

  • Malibu single-family sales and listing inventory have declined year over year for three straight quarters
  • Malibu Beach condo median sales price rose year over year for five straight quarters

VENICE/MAR VISTA

  • Venice condo price trend indicators declined as sales surged year over year
  • Mar Vista single-family listing inventory fell sharply for two straight quarters, restraining sales

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