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August Heats Up Residential Market in L.A.

September 9, 2010

(Courtesy Photo* Residences in Silverlake, where mutiple offers are commen.)

Home sales and home prices in Los Angeles County climbed in August, bucking a national trend.

Home sales rose 7 percent in August compared with last year and were up 8 percent from July, according to data provided by HomeData of Hicksville, N.Y.

The sales increase came in spite of a 27 percent plunge in nationwide home sales in July after the expiration of federal tax credits that had pumped up the market.

Meanwhile, home prices hit their highest mark since November 2008, climbing slightly to $355,000 from July’s $350,000. Prices were up 7.5 percent versus the past year.

“These figures are certainly good news,” said Stuart Gabriel, director of the UCLA Ziman Center for Real Estate. “They suggest the housing market in Los Angeles has found a bottom and is slowly moving up.”

Most local economists and real estate analysts had expected the housing market to remain soft through the end of the year given the loss of tax credits. But reduced prices and record-low interest rates have drawn buyers.

“For those households that can afford to buy – who have steady jobs, significant savings or are able to qualify for loans – this combination of low interest rates and house prices has not been seen for decades,” Gabriel said.

Indeed, buyers are flocking to desirable L.A. neighborhoods.

“We are seeing houses in Silver Lake that are on the market for $750,000 or $800,000 receiving multiple offers,” said Michael Nourmand, president of Nourmand & Associates Realtors in Beverly Hills.

Among other communities that saw at least a doubling of sales last month compared with August 2009 were Glendale; Hollywood; Santa Monica; Westchester; and South Los Angeles, where several ZIP codes saw year-over-year price increases of at least 40 percent.

On the higher end, sellers have finally lowered their prices enough to attract buyers, according to Betty Graham, president of the greater L.A. region for Coldwell Banker.

Nourmand said a lot of Chinese investors have been scouring the Beverly Hills area for homes, largely supplanting European investors that had been prominent in the region.

© 2010 Los Angeles Business Journal | (323) 549-5225