Was buying a home 10 years ago in the City of Angels a good investment? We recently asked the same question about New York City and did a study on that, but this time around, we decided to shift our attention to the West Coast, specifically to L.A. County. Although very different markets, NYC and L.A. County have one big thing in common: extremely expensive homes.
Housing in Los Angeles County is currently in a tough spot, as prices have gotten so high that homes are overvalued due to surging interest rates, limited supply and rising demand. Consequently, the Median home price in 2017 ($570,000) outpaced the pre-recession record set in 2007 ($550,000).
Even though median prices are above pre-recession levels, we got curious to see just how much they have increased since 2008 in some of the hottest cities in the county by looking at a specific set of data: All the single-family homes that were bought in 2008 and later sold in 2017—with no in-between transactions. We looked at the price difference for each transaction and calculated the median profit. Every single city in L.A. County saw some kind of growth, and none of the locations in our study saw prices decrease in the last decade.
Before diving into the story, here are some key takeaways:
- More than 2,100 homes were acquired in 2008 and resold in 2017 in L.A. County;
- Based on these sales, county-wide median prices grew from $419,000 in ‘08 to $595,000 in ’17;
- The City of Los Angeles saw a $161,000 surge in median home prices;
- With just 6 sales, Beverly Hills prices went from $2.2 million to $2.5 million in the last decade;
- Santa Clarita and Long Beach prices rose 25%, while prices in Palmdale and Lancaster grew 40%.
LA County Sales Up 30% from 2008 to 2017
Buying a house in L.A. during the downturn was risky business, as it was in any other region for that matter, but there were some buyers who swam against the current and ended up with a profit when selling in 2017.
Sales were spread out, and almost every city in the county saw its fair share of transaction activity. Overall, roughly 2,100 homes were purchased in L.A. County in 2008 that ended up being sold in 2017. The median sale price for these homes was $419,000 in 2008 and $595,000 in 2017, marking a 30% increase, which translates into a median profit of $125,000—a decent amount, given the circumstances.
By adding inflation into the mix, things are a bit different. The median sale price for the 2,100 assets would’ve been roughly $491,340 a decade ago, which would translate to half the median profit in 2017: $64,662.
Los Angeles City Sees $161K Median Price Increase
As the most spread-out city in the county, it’s no surprise that Los Angeles was home to the largest number of sales: 774. The median sale price for these assets was $440,000 in 2008 and grew $161,000 to $603,500 in 2017, a 37% increase.
The City of Los Angeles still boasts somewhat decent prices when compared to other posh cities in the county, although neighborhoods such as Venice, Bel-Air and Silicon Beach will keep the median home price on an upward trend.
Santa Monica Median Rises 55%, Beverly Hills Prices Go from $2.2M to $2.5M
The cream of the crop in L.A. County (Malibu, Beverly Hills, and Santa Monica) saw some interesting changes over the past 10 years. Santa Monica was home to the most transactions out of the three cities: 23 homes were bought here in 2008 for a median of $700,000, and were sold in 2017 at a median price tag of roughly $1.1 million—a 55% median increase in prices.
The other two cities saw considerably less transaction activity, with 6 deals closing in Beverly Hills and 5 in Malibu. When looking at the 6 Beverly Hills transactions, there was only a 20% median increase from 2008 to 2017, which indicates that prices didn’t increase as drastically as you would expect in this lavish city. The median sale price for these Beverly Hills homes was $2.2 million in 2008 and $2.5 million in 2017.
Prices in the oceanfront cities of Manhattan Beach and Hermosa Beach increased 31% and 48%, respectively. In Manhattan Beach, 15 homes were bought in 2008 and sold in 2017, the area’s median price going from $1.9 million to $2.3 million. The median sale price for the 7 transactions in Hermosa Beach went from $1 million to $1.4 million.
Long Beach, Santa Clarita Record about 25% Uptick in Median Prices since ‘08
Boasting a diverse housing stock within easy reach of both Downtown L.A. and Orange County, Long Beach, the second-largest city in the county, clocked in a 25% median home price increase when looking at the 106 transactions that closed a decade apart. Based solely on these sales, the median price in the city was $389,500 in 2008 and reached $467,500 in 2017.
With the 38 transactions that closed in Santa Clarita, the city experienced a growth in prices similar to Long Beach: roughly 26%. The median sale price, however, went from $377,000 in 2008 to $492,500 in 2017. With 188 and 157 transactions respectively, Lancaster and Palmdale prices had a similar growth trajectory, going from roughly $197,000 to about $270,000, a smooth 40% uptick.
Our data shows that buying a home in L.A. in 2008 and selling in 2017 was by no means a bad decision. People who bought a home a decade ago managed to turn a profit in 2017, and purchasing a house during those troubling times turned out to be a good investment in the long run.
Check out the chart below for data on each L.A. County city:
| City | No. of Sales | Median Price 2008 | Median Price 2017 | Median Change | Percentage Change |
|---|---|---|---|---|---|
| Agoura Hills | 6 | $457,500 | $665,000 | $160,000 | 35% |
| Alhambra | 6 | $409,000 | $595,000 | $146,000 | 36% |
| Arcadia | 14 | $504,000 | $656,500 | $155,500 | 31% |
| Artesia | 2 | $530,000 | $645,500 | $115,500 | 22% |
| Avalon | 1 | $540,000 | $620,000 | $80,000 | 15% |
| Azusa | 16 | $333,500 | $424,000 | $92,500 | 28% |
| Baldwin Park | 6 | $275,000 | $391,250 | $128,500 | 47% |
| Bellflower | 9 | $299,500 | $477,500 | $120,000 | 40% |
| Beverly Hills | 6 | $2,285,000 | $2,591,500 | $476,000 | 21% |
| Burbank | 29 | $505,000 | $675,000 | $178,000 | 35% |
| Calabasas | 6 | $872,500 | $1,252,000 | $136,500 | 16% |
| Carson | 17 | $335,000 | $457,500 | $94,998 | 28% |
| Cerritos | 8 | $564,500 | $639,000 | $72,000 | 13% |
| Claremont | 11 | $575,000 | $750,000 | $200,000 | 35% |
| Commerce | 1 | $289,000 | $427,500 | $138,500 | 48% |
| Compton | 16 | $235,000 | $365,000 | $114,999 | 49% |
| Covina | 15 | $346,000 | $460,000 | $115,000 | 33% |
| Cudahy | 1 | $200,000 | $220,000 | $20,000 | 10% |
| Culver City | 11 | $485,000 | $772,000 | $217,500 | 45% |
| Diamond Bar | 18 | $483,000 | $680,500 | $167,250 | 35% |
| Downey | 18 | $392,500 | $480,000 | $77,000 | 20% |
| Duarte | 8 | $328,750 | $393,500 | $69,000 | 21% |
| El Monte | 10 | $419,000 | $515,000 | $85,500 | 20% |
| El Segundo | 4 | $472,500 | $618,500 | $166,000 | 35% |
| Gardena | 7 | $325,000 | $387,000 | $90,000 | 28% |
| Glendale | 29 | $560,000 | $685,000 | $137,000 | 24% |
| Glendora | 14 | $396,000 | $509,500 | $136,000 | 34% |
| Hawaiian Gardens | 6 | $184,250 | $324,500 | $95,250 | 52% |
| Hawthorne | 5 | $399,000 | $625,000 | $172,997 | 43% |
| Hermosa Beach | 7 | $999,000 | $1,475,000 | $476,000 | 48% |
| Hidden Hills | 1 | $3,550,000 | $4,065,000 | $515,000 | 15% |
| Huntington Park | 2 | $309,500 | $357,500 | $48,000 | 16% |
| Inglewood | 7 | $273,000 | $436,000 | $167,000 | 61% |
| La Canada Flintridge | 4 | $1,665,000 | $2,850,000 | $567,500 | 34% |
| La Habra Heights | 2 | $692,250 | $803,750 | $111,500 | 16% |
| La Mirada | 14 | $417,500 | $565,000 | $133,750 | 32% |
| La Puente | 14 | $302,500 | $425,000 | $97,000 | 32% |
| La Verne | 7 | $600,000 | $690,000 | $110,000 | 18% |
| Lakewood | 24 | $405,000 | $537,500 | $126,500 | 31% |
| Lancaster | 188 | $197,250 | $268,500 | $76,000 | 39% |
| Lawndale | 7 | $435,000 | $549,000 | $99,000 | 23% |
| Lomita | 5 | $415,000 | $460,000 | $74,000 | 18% |
| Long Beach | 106 | $389,500 | $467,500 | $100,749 | 26% |
| Los Angeles | 774 | $440,000 | $603,500 | $161,000 | 37% |
| Lynwood | 6 | $269,500 | $382,000 | $110,000 | 41% |
| Malibu | 5 | $7,750,000 | $8,000,000 | $350,000 | 5% |
| Manhattan Beach | 15 | $1,950,000 | $2,360,000 | $614,000 | 31% |
| Maywood | 1 | $355,000 | $460,000 | $105,000 | 30% |
| Monrovia | 9 | $580,000 | $615,000 | $93,500 | 16% |
| Montebello | 5 | $342,000 | $410,000 | $68,000 | 20% |
| Monterey Park | 7 | $540,000 | $703,000 | $163,000 | 30% |
| Norwalk | 23 | $323,000 | $435,000 | $115,000 | 36% |
| Palmdale | 157 | $196,500 | $275,000 | $79,000 | 40% |
| Palos Verdes Estates | 4 | $1,575,000 | $1,648,250 | $73,250 | 5% |
| Paramount | 8 | $220,750 | $304,500 | $91,000 | 41% |
| Pasadena | 47 | $490,000 | $680,000 | $150,000 | 31% |
| Pico Rivera | 9 | $390,000 | $450,000 | $100,000 | 26% |
| Pomona | 32 | $275,000 | $392,500 | $110,000 | 40% |
| Rancho Palos Verdes | 15 | $875,000 | $1,175,000 | $282,000 | 32% |
| Redondo Beach | 16 | $861,500 | $1,172,500 | $294,500 | 34% |
| Rolling Hills Estates | 1 | $745,000 | $890,000 | $145,000 | 19% |
| Rosemead | 1 | $436,000 | $785,000 | $349,000 | 80% |
| San Dimas | 12 | $392,500 | $515,000 | $112,500 | 29% |
| San Fernando | 8 | $242,500 | $377,500 | $125,000 | 52% |
| San Gabriel | 3 | $740,000 | $1,096,500 | $356,500 | 48% |
| Santa Clarita | 138 | $377,000 | $492,500 | $98,000 | 26% |
| Santa Fe Springs | 3 | $330,000 | $432,000 | $125,000 | 38% |
| Santa Monica | 23 | $700,000 | $1,075,000 | $387,000 | 55% |
| Sierra Madre | 2 | $1,062,500 | $1,285,000 | $222,500 | 21% |
| Signal Hill | 4 | $352,000 | $364,500 | $54,500 | 15% |
| South Gate | 7 | $280,000 | $405,000 | $130,000 | 46% |
| South Pasadena | 2 | $720,000 | $1,158,000 | $438,000 | 61% |
| Temple City | 8 | $578,500 | $802,000 | $208,749 | 36% |
| Torrance | 38 | $507,500 | $627,500 | $114,998 | 23% |
| Walnut | 13 | $600,000 | $750,000 | $219,000 | 37% |
| West Covina | 17 | $385,000 | $540,000 | $115,000 | 30% |
| West Hollywood | 21 | $615,000 | $905,000 | $190,000 | 31% |
| Westlake Village | 6 | $930,000 | $1,204,500 | $185,500 | 20% |
| Whittier | 29 | $350,000 | $500,000 | $114,000 | 33% |
| La County | 4 | $1,665,000 | $2,850,000 | $567,500 | 34% |
Methodology:
We gathered data on all the single-family homes that were purchased in Los Angeles County in 2008 and sold a decade later, in 2017. Only assets that were bought in 2008 and sold in 2017 with no in-between transactions were selected. We calculated the median sale price for these properties in each city in the county. We obtained the 10-year price change by calculating the median price change of all the transaction. Inflation was calculated on the BLS website.
The post How Much Did Home Prices Increase in LA County since the Downturn? appeared first on PropertyShark Real Estate Blog.
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