2016 Will Be The Year The Inventory Returns
For the past 3+ years, the Playa Vista market has been characterized by an extreme lack of inventory. This has been the largest reason prices have increased more than 50% during this time. Bidding wars have led to a “do whatever it takes” mentality, and each time a new, higher priced comp is set. This has been troubling to those who have wanted to move up or down within the community or to those looking to break in.
Good news may be coming to those who want to move. I know this because homeowners call me when they are interested in moving and many now realize that moving within Playa Vista may not be realistic due to being priced out and/or willingness to deal with the typical feeding frenzy whenever a good listing comes up.
Other people, once drawn to Playa Vista for its quiet streets, are now or may soon be interested in moving out of Playa Vista due to an increase in noise and traffic from the new residences and businesses that are opening. Some are maturing families with the desire for a larger yard and quality schools beyond elementary. Areas cited as landing spots are the Conejo Valley and Palos Verdes, two idyllic locations with good schools K-12, and while certainly not cheap, much more affordable than similarly-nice locations in the city. People are trading a longer commute for a more traditional family lifestyle. Homeowners with these needs will use the strong market and lack of competition as an opportunity to cash out.
Additionally, with over 1,500 new apartments in PV, non-owner occupants will have much more competition from vacant properties, and may see better investment opportunities elsewhere. There will also be a few more new home releases in 2016, which will shake loose some resales and interest rates should increase lessening buyer demand slightly.
The largest reason inventory will be back in 2016 is that simply seeing inventory available will create more inventory. With a little bit more on the market, current homeowners will feel comfortable taking a leap of faith that they will be able to find something if they are attempting to move within the community. Others will rush to cash out before it becomes a buyers market. There is plenty of demand in Playa Vista and more coming, probably in 2017, when Google sets up shop, so there’s no need to worry about a huge drop in prices, but possibly a return to normalcy is in store.