First Half Observations of the Playa Vista Market
We have reached the halfway mark in 2018, which is unbelievable. Are years getting shorter? It has been an unremarkable, albeit steady, year so far in Playa Vista with modest price gains and still low inventory. New construction at The Collection, Jewel, and Seabluff continues to trickle out giving buyers options, but condo and single family resales have been down from 81 in the first half of 2017 to 57 in 2018 according to the MLS.
The biggest surprise has been that Jewel has actually sold some homes in the $4M range. Yes, they are beautiful and large, but still for $4M+ you can get a seriously nice house with land in a great LA neighborhood. Well, who would fault someone for wanting to get the best in Playa Vista? But $4M, though? Granted, the highest sale belongs to an NBA player with a $7M+ salary. This makes more sense.
Another revelation – original Playa Vista homes are officially dated. Once felt to be too new to need updating, Playa Vista homes are now frequently undergoing remodeling and updating and mid-2000’s vintage homes that have not been updated are experiencing slower sales and lower prices. Phase II’s fancy finishes let buyers know what they could have, so granite countertops, brown cabinets, old carpets, and worn hardwood floors are just not cutting it anymore.
In terms of rentals, individually-owned condo/homes have been in high demand, especially larger sized homes. The opening of thousands of new apartments in the past couple of years have put pressure on condos in 2016 and 2017. With mostly smaller size units and many renters discovering some of the disadvantages of apartment living vs. living in a predominately owner-occupied community, larger individually-owned units (1,500 SF and up) have seen a rise in rents of 7% in price/sf and 14% in overall price in the 3 months ending June 30, 2018 from the same time in the previous year.
The biggest question is how long will this continue? With Google expected to open up their Spruce Goose hangar offices in the fall, demand will be impacted. Additionally, real estate, which is typically cyclical, has been appreciating strongly for over 6 years and Playa Vista has outperformed most other areas during that time. Some properties have more than doubled in price since the bottom of the market. Some would say that the “Google-Effect” is baked into the prices and what goes up must come down, so now would be a good time to sell. That might be true, but with the great community you are living in and relative shortage of housing in Los Angeles, prices will always go up in the long term and the quality of life is second to none.