The Agency’s Third Quarter Report for the Los Angeles prime residential markets was released today, and its finding conclude that the demand in the luxury market remains strong with record closings and all-time lows in inventory.
For the first time ever reported, prime single-family home sales exceeded 900 in back-to-back quarters and condominium closings reached their highest peak since the recession, with 820 closings in the Third Quarter, just 10% below the 2007 peak.
The report examines all condominium sales over $500,000 and single family home sales over $1,000,000 in the prime neighborhoods of Los Angeles – stretching from Downtown Los Angeles to Santa Monica and Malibu and roughly from the I-10 Freeway to Mulholland Drive.
While average pricing remains constant for both condominiums and single-family homes, price per square foot continues to increase. Single-family home averaging sales pricing at $796 per square foot is up 10% over 2Q 2013 and 12% over a year ago, while prime condominium average sales pricing per square foot at $555 is up 5% over 2Q 2013 and 10% over a year ago.
The lack of inventory continues to drive pricing. Months of supply for prime single-family homes remains at 3.9 while prime condominiums increased slightly to 3.2. Inventory increased as more resales came to market. The lack of new for-sale development has driven up sales and pricing at existing properties.
Select new condominium properties have come to market with fast absorption, while existing projects continue to raise prices. The Ritz-Carlton Residences at L.A. LIVE is now 90% sold, highlighting continued demand for luxury condominiums.
The buzz of construction can be heard all throughout town. The Agency has found that developers need strategic and tailored new development planning to respond to unique submarket characteristics and demands. Several recent projects have undersold certain homes while overvaluing others – costing time and money.
The Research & Planning Team is a part of the New Development Group at The Agency. Collectively, they are advising on the most important new developments on the West Coast. For information on market intelligence, or for individual property analysis, please contact us.