Don’t feel like reading? Check out Ed’s tip in video form:
In this week’s episode, Ed fills us in on the Los Angeles housing market. First thing to keep in mind is that the LA market, as a whole, is made up of over 8 different cities. Ed and his partner, David, focus their attention on the west side- Venice, Santa Monica, Brentwood, Beverly Hills, Bel Air, Pacific Palisades as well as up in Malibu- a sector of the LA market that, he says, is very, very strong.
However, as any realtor knows, with a strong market comes even stronger concerns.
If you are a realtor entering into a new market that is doing well, there can sometimes be the fear of a “real estate bubble”- or a run up in housing prices due to demand. Ed says that there is not that sort of fear in the LA market. From a buyer’s point of view, there is always the concern that they will buy the home and if the market crashes the following year, they’ve overpaid and could enter into a negative equity on their home. Again, Ed doesn’t believe this will happen. “It’s not as if the prices in the markets that we’ve worked with have increased to a level where it’s not sustainable.”
Here’s one reason why the LA market is doing so well right now:
As places like Silicon Beach and the Venice market start to emerge, there are a lot more companies paying their employees higher salaries. The influx in buyers with more buying power, however, is not driving the price up to a ridiculous level. In fact, Ed and his partner have noticed that there’s been a period over the last two months where there’s been very little inventory (i.e. properties) coming to the market and there are still a lot of buyers in the market.
Hold onto your seat. Ed shares a few numbers that might shock you:
“In LA, you can get a 10 year mortgage up to $4 million for a 3 ¼ % a year APR.” The cheapest money Ed’s ever seen in his real estate career. With a happy forecast for those looking to buy and realtors looking to sell, Ed closes with the cherry on top of the LA real estate market:
If you’re able to borrow up to $4 million, you don’t need a big down payment to buy an incredible LA home. Hear that Ken and Barbie? Bigger closest space.
Are you a realtor in LA? What’s your take on the market? Let us know in our Facebook Group, Future of Real Estate.