Market for high-end real estate in Los Angeles is gaining momentum
This summer has been greeted by an an increase in demand for high-end real estate in Los Angeles, and the booming market indicates that many investors are willing to shell out top dollar for real estate in some of the most coveted Los Angeles zip codes. Both buyers and sellers have displayed a cautious optimism with regard to the future of the economy, which has steadied the gradual recovery of housing prices in the wake of the national housing crisis.
According to Forbes, a report issued by a luxury real estate expert highlighted U.S. ZIP codes with a flurry of activity in the $10 million-plus market and studied listings and completed sales from June 2011 through June 2012. The source revealed that 21 sales priced $10 million or higher took place over the past 12 months in the prestigious 90210 Beverly Hills ZIP code. The source also reported sales of mansions for more than $10 million in other Southern California neighborhoods such as Bel Air, Malibu and Santa Barbara. In Malibu, buyers can currently choose from among 66 listings priced above $10 million, the source reported.
Consumers are most likely to purchase real estate as an investment, and high-end real estate is widely considered as an investment that will not lose value even during an economic downturn. Many prospective buyers are confident that their investment will retain its value and are optimistic about future returns on highly desirable Los Angeles property. Recently, The New York Times suggested that buyers may be more willing to invest in homes marketed and sold as art on account of their historic or architectural significance. However, the source reported that the Los Feliz Ennis House designed by Frank Lloyd Wright sold for $4.5 million - after it was priced by Christie's at $15 million in 2009.
High-end Los Angeles properties appeal to a niche market, and some potential buyers are motivated by owning a status symbol nestled in highly sought-after Los Angeles neighborhoods such as the Hollywood Hills. Luxury home sales have preceded a recovery in the broader Los Angeles real estate market. However, some experts have projected an upturn in sales within the greater Los Angeles metropolitan area based on the increase of upscale transactions.