7 Main Points How Covid-19 Has Impacted Hollywood Hills Real Estate Market
Volatile times seem to have taken a toll on many businesses and industries over the last 3 months. However, one area that has seemingly remained stable is the housing market – specifically in the Hollywood Hills area. A small decrease in the average cost to purchase a property in the area provides attractive deals to many investors and one-time home buyers. Here’s what the market is telling us:
1. A decrease of about 5% in housing prices
Supply has continued to meet demand, so far. Buyers are still ready to purchase homes in the Hollywood Hills area despite Covid-19 uncertainty – further proving the market’s resilience. Forecasts say cost will remain healthy for California sellers and buyers, as people are attracted to living in highly populated areas within the Los Angeles area. Interestingly, Google Trends reflects an increase in search terms related to buying and renting in California.
2. Interest rates remain low
Traditionally, low interest rates stimulate buyer growth as it costs less in the long term to borrow from lenders*. Going into June 2020, we continue to see rates stay relatively down in the area. This has brought more buyers to the table as attractive lending is a top indicator of the right time to buy. Luxury realtor Luis Pezzini deals exclusively in the Los Angeles area and anticipates interest rates will remain low for the next 1-2 years.
*Pricing and lending rates subject to individual lenders and banks
3. Houses priced at $10 million and up are slower to sell
Homes with a range of different prices are selling. However, the higher end of the spectrum is seeing slower selling speeds than more ‘affordable’ homes. Understandably so as these homes are more exclusive and harder to afford. However, the slight drop in the cost to purchase in the Hollywood Hills area is making it an investment many are interested in.
4. Opportunity within California’s market resilience
It’s all about what the future holds for investors and buyers this spring. Many places are seeing a steep drop in the housing market but California, more specifically in the Hollywood Hills area, may see a booming 2021. Why? The nation and the world alike have seen arguably the worst economic hit in the last decade, but the median housing cost still remains above $600K in California markets. See below:
5. Could be an optimal time to rent out
Renting has traditionally kept buyers interested in similar market positions – specifically when we’re experiencing slightly down housing prices as well as low interest rates. Hollywood Hills purchasers that are looking to rent out may expect to break even and go positive relatively faster than if they were investing in higher priced markets with high interest rates (opinion). However, be aware of the current economic climate which inevitably affects housing demands. Agents are seemingly optimistic though as businesses reopen and the economy begins to re-stimulate.
Mortgage payments relative to housing prices are falling. This has led to better affordability in the Los Angeles area. According to the California Association of Realtors, affordability grew 3.2% in Los Angeles.
7. Market Recovery
According to realtor.com’s Weekly Housing Trends Report, the week ending on May 23rd had more real estate listings than prior weeks. This is a positive sign for the markets as we begin to slowly see the economy opening back up. A quote from the report reads “Median listing prices have regained momentum and growth is now approaching pre-COVID levels. New listings are down just 20 percent as more sellers return to the market compared to the last several weeks.” Seller confidence is also slowly resuming pre-covid levels. These are all positive signs as we head into June.
In closing, the housing market in the Hollywood Hills area remains stable as buyers are buying and sellers are still willing and able to sell with closing prices on the rise. If you are looking to buy or sell in the Hollywood Hills area Pezzini Luxury Homes is always here to help and would be excited to work with you.
Reach out to us here.
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