California continues to enjoy rising housing costs, with certain parts of the city experiencing a significant boom. Among these is Koreatown, which has experienced a large number of sales to investment companies over the last few months.
California’s Rising Housing Costs
Home prices in Southern California have been on the rise. In the Los Angeles-Long Beach-Glendale metropolitan area, home prices increased by 6.8 percent when compared to the same time last year and by 0.8 percent when compared to September. These figures are similar to the national statistics, with home prices increasing by the same amount year-over-year and by 1 percent when compared to September.
Due to tight home inventories, housing prices in Southern California are expected to continue to rise into 2016. Overall, home prices throughout the state have enjoyed a largely healthy trend over the last few years. Furthermore, home equity levels throughout the region are getting closer to reaching their pre-recession levels. While this is good news in many ways, the state also has to be careful to monitor the market in order to prevent home prices from becoming so costly that they are no longer affordable to families. Metropolitan areas, which are where home prices have tended to grow the most rapidly, are of particular concern.
According to some economists, home prices are likely to increase by 5.2 percent in October 2016 when compared to this past October. This is largely due to the fact that many markets have experienced low inventories combined with strong demand among buyers, resulting in upward pressure on home prices. These conditions are likely to continue into the New Year.
The Growth of Koreatown
While most markets throughout Southern California are growing, Koreatown is experiencing a significant boom as investment companies look to purchase apartment buildings in the neighborhood. In fact, real estate within the area has seen an estimated $100 million in turnover over the last few months.
In November, M West Holdings purchased Emerald Terrace, which is located at 136 and 160 S. Virgil Avenue, for $66 million. Built in 1970, the buildings house 310 units. The same company also purchased Wilshire Royal Apartments, located at 2619 Wilshire Boulevard, in August. The 193-unit building sold for $32.5 million. San Francisco-based Prana Investments also recently purchased three properties for $16.6 million. These properties included the 47-unit Normandie. The 76-unit Western and a 35-unit apartment located on 8th Street.
Champion Real Estate Company also purchased the 87-unit Ancelle Apartments near 7th Street and Gramercy Drive, while TRG Investments purchased Ashby Apartments for $8.4 million. Located at 808 S. Hobart Boulevard, the five-story building houses 49 units.
Located in the center of the city beneath Sunset and Hollywood, Koreatown offers a convenient location west of Downtown Los Angeles and east of Beverly Hills. The area is known for offering a variety of nightlife, shopping and dining opportunities. As such, Koreatown is transforming into the city’s hottest high-end rental market.
If you would like to learn more about the Southern California real estate market and investment opportunities, contact our team of real estate experts. We specialize in luxury properties in the area’s most exclusive communities.
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(all data current as of 5/29/2017)
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