In the last two years, Los Angeles has witnessed exceptional growth in the luxury residential market. In fact, prices for the luxury housing market have soared to an all-time high in LA. When it comes to luxury real estate properties in the U.S., the most recent data shows that Los Angeles has left behind even Manhattan, which is famous for its sky-high real estate prices.
Let’s further dive into the boom of the LA luxury residential market and how you can be part of it:
LA Luxury Residential Market is Living Up to Its Name
Real estate experts understand that “City of Angels” is living up to its name in the luxury residential market. As a hub of the film and entertainment industry and a symbol of glamour and wealth, LA continues to drive the prices of its luxury residential properties.
Now, many factors come into play that increases prices for LA luxury residential market. LA, the second biggest U.S. city, gets a lot of traction due to the warm climate throughout the year. The direct coastal locations paired with a boulevard shopping experience and palm trees make up for an all-around luxury living lifestyle.
Of course, like other American cities, LA has its fair share of governing and administrative issues. But the demand for luxury real estate properties in LA is at an all-time high. In fact, demand for luxury residential properties significantly exceeds the current supply. On average, a luxury residential house is valued at $10 million in Los Angeles.
Strong Position of LA Luxury Residential Market
The high-end properties in LA performed stronger in Q3 and Q4 2021. As of now, there is a bidding war going on around LA’s luxury housing market that continues to bring more investors and buyers into the fold. Since the pandemic crisis, there has been a strong narrative around the high-end housing market.
The fact is that high-net-worth individuals have more opportunities and mobility to leverage LA’s high-end residential properties. In fact, 1 in 4 luxury residential houses is sold 10-20% higher than its original market price. If this trend continues, supply will be able to meet demand in the next 5-6 months.
The price surge for LA’s luxury residential properties is no longer a passing trend. Data proves it is a long-term effect of internal and external elements like increased demand. And the increased demand for LA’s high-end residential properties is the direct result of the housing boom that magnified and segmented the market and continues to create more interest for potential buyers.
Prestigious Locations Retain their Market Value
As far as luxury residential locations go, prestigious Westside spots are in high demand. Los Angeles pairs an urban lifestyle with direct scenery of mountains and sea. Mostly, potential buyers are looking for high-end residential properties with exceptional features like spas, bars, and wine cellars.
On average, this caliber of luxury residential property is sold for around $90 million in Bel Air. In Los Angeles, one square meter of a luxury residential property costs around $19,859. Key driving forces that continue to increase the price of high-end residential properties in LA include utmost privacy, substantial space, and direct routes with main roads.
Current forecasts indicate that the demand for high-end residential properties in LA will exceed supply in 2022. Consequently, it would further drive the prices of luxury residential properties in Los Angeles. Also, expect top-tier real estate properties in Bel Air and Beverly Hills to retain their market value and become stronger in the coming months.
Continuous interest from potential buyers paired with dynamic market segmentation will continue to increase the prices of the luxury housing market in LA. If the international demand for high-end residential properties comes back, prices will inevitably increase again.