Los Angeles luxury homes saw double-digit price growth in the first three months of 2017 compared to a year earlier, as the types of homes selling increased in size and number of amenities, according to a report Douglas Elliman published Thursday.
The median price of a luxury single-family house has increased nearly 17% since last year to $9.7 million, according to the report prepared by appraisal firm Miller Samuel. High-end Los Angeles condos also saw a jump in median price of 8.9% to $2.45 million—making the West Coast entertainment hub one of the only major cities in the U.S. where luxury outperformed the rest of the market.
More:Read More About the Luxury Los Angeles Market on Mansion Global
Douglas Elliman defines luxury as the top 10% of the market.
Jonathan Miller, chief executive of Miller Samuel and author of the report, chalked up much of the double-digit growth in luxury single-family house prices to a change in the size and quality of the mansions sold in the first quarter rather than big-time price appreciation.
Indeed, there were some indications that the market for mansions was moving a bit slower than before despite the price gains. It took the average mansion two weeks longer to sell in the first quarter of 2017 compared to last year, up to an average of 112 days on market.
Sellers also were willing to drop prices further in order to sell. The average home took a 7.2% price cut from the original listing price, compared to a year ago when that figure was closer to 4%.
"Inventory is moving just a little bit slower, but it’s not slow," Mr. Miller said.
Luxury condos are relatively new product in flat Los Angeles, where sprawling estates in the posh suburbs have traditionally housed the rich and famous. But a new crop of developments have seen luxury condos move quickly, and price growth shows that the market has adopted the new style of living without pause.
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Meanwhile, the high-end beachfront market of Malibu also recorded double-digit price growth, according to another report by Douglas Elliman released Thursday. In the first quarter of 2017, the median sales price for single-family houses increased 14.3% to $2.8 million from last year, according to the report.
In the Venice-Mar Vista area, which has recently become known as Silicon Beach for the flood of tech companies that have sprung up in the area, inventory is incredibly tight, pushing days on market to a matter of several weeks, according to an additional report by Douglas Elliman released Thursday. For houses and condos, the average seller got a 1%-2% premium over their asking price.
"The boom in the waterfront in job growth and the shortage of supply are just wreaking havoc," Mr. Miller said. "This is a really tight market."