Los Angeles Luxury Homes Have a Strong Spring

Los Angeles luxury home prices soared to record numbers in the second quarter of 2015 with the median sales price for a single-family home surpassing $5.9 million, ($5.912,500) according to the latest report from Douglas Elliman Real Estate. The new median represents a 13.7 % increase compared to the second quarter of 2014 and a 20.1% jump in price since the first quarter of this year. Jonathan Miller, president and CEO of Miller Samuel, a New York-based real estate appraisal and consulting firm whose company prepares the Elliman reports, attributes the increase to an overall strong economic outlook. “This isn’t a function of twenty or $30 million sales that are skewing everything higher across the board,” Miller said. “This is about inventory moving along, sales rising and the economy improving. It’s not that the prices are spiking, it’s just them grinding higher, flirting with records and breaking through.” More: A Beverly Hills Home with a View He considers the Los Angeles scenario especially impressive because it comes without the aid of normalized credit.“Lenders remain afraid of their shadows,” he observes. “There’s even further upside down the road as credit normalizes." There were 164 sales of single home luxury properties during the quarter, an 8.6% increase from the same quarter in 2014--and an increase of 39% compared to the first quarter. The average price per square foot rose 9 % from $1179 in 2014 to $1285. Demand for luxury property is also getting stronger. High-end homes saw faster sales periods with the number of days on the market dropping 18.5%, from 108 in 2014, to 88 in 2015. Many of LA’s exclusive and high-end neighborhoods were at or near record prices across the board and some like Santa Monica, Pacific Palisades and Beverly Hills saw increases in sales. “I’m not enamored of price records because you have the whole question of affordability,” Miller said. “The cities showing rising sales like Los Angeles, are in better overall shape, that’s the big takeaway.”

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