Now that we can see the beginning of the post-pandemic era on the horizon, that begs the question: Is it a good time to buy real estate in Los Angeles? The short answer is yes. While the process of searching and buying a home may be slightly different today (think virtual viewings, mask-wearing, and social distancing), the benefits of buying real estate in the City of Angels remain the same. Keep reading to learn four reasons why it’s indeed a great time to buy real estate in Los Angeles.
Real estate is a good investment.
Pandemic or not, real estate is a strong investment. Yes, the market fluctuates, but historically it’s always swung upward even after a downturn. After the 2008 financial crisis, for example, the median price per square foot of a single-family home in Venice began to dip but is now worth almost double today. In other words, the real estate market is resilient. If you invest early and are in it for the long game, real estate investments typically pay off and are an excellent hedge against inflation.
Home prices are going up.
Currently, LA’s home prices are on an upward trajectory, and they show no signs of slowing down. For instance, Santa Monica house market trends show that value has gone up over the last decade. In 2010, Santa Monica homes sold for under 2 million but in 2020 sold for upwards of $3 million. And, overall home sales in Los Angeles during Q4 of 2020 were up compared to Q4 of 2019. If that’s not proof that it’s a good time to buy, we don’t know what is.
LA is always cool and desirable.
Los Angeles has always been a cool, alluring place to live, and that’s not going to change anytime soon. If 2020 has taught us anything, it’s that life is precious, and we owe it to ourselves to pursue our dreams. If you’ve been dreaming of putting down roots in LA, there really is no better time than now. Or, if you’re already a local, take this as an opportunity to do some self-reflection and perhaps relocate to a more suitable area or neighborhood in LA that aligns more with your values. Maybe being close to the beach soothes your soul, or wide-open spaces are more your vibe. Now is the time to live in your dream location.
And don’t be afraid to expand your search slightly outward to the outskirts of LA. You can find some great deals. LA has an abundance of beautiful pockets that makes buying in some of the hottest areas accessible, even if your address is just outside the neighborhood limits. This is especially for you if you’ll continue working from home post-pandemic. You can now choose to live wherever you want without dealing with a dreaded commute.
Interest rates are historically low.
One of the biggest reasons that make now a great time to buy real estate is that interest rates are historically low, so borrowing is more accessible. Low-interest rates don’t just mean paying less interest. It also equals more buying power. You can either have a more affordable monthly payment, which is great in LA where the cost of living is high. Or, you can stretch your budget and afford a higher home sale price.
Interest rates are also low for home improvement loans and refinances. So if you’re willing to buy a home that needs some love, you can get a great deal in an area you wouldn’t otherwise afford and fix it up yourself exactly to your liking.
Don’t sleep on this opportunity. Mortgage rates will likely start going up again sometime soon.
The bottom line
No matter what is happening in the market, deciding to invest in real estate is a personal decision. Buying a home is a long-term commitment and a considerable expense and jumping on the bandwagon just because you don’t want to have FOMO (fear of missing out) isn’t reason alone to do it.
If you do decide it’s the right time for you, consider your life after the pandemic and if the home will still fit your needs then. Selling your new home too quickly means you likely won’t gain much equity and may even lose money on the sale.
Before leaping into home buying, ensure that it’s the right decision for you and your family. Our real estate partners here at Halton Pardee can help you transition wherever you want to go. They are experts on all things Los Angeles real estate and can help connect you with real estate partners nationwide if you want to buy elsewhere.