Los Angeles native Steven Taylor with wife Natalie |
Los Angeles is now the national epicenter of the COVID-19 pandemic, and has been dealing with the Stay at Home order since March. The widespread impact of coronavirus has been profound, but how has Los Angeles real estate been impacted by COVID-19? While many expected the housing market to plummet, there has been a surprising twist: Los Angeles housing has actually been hot in recent months. Homes are selling fast, and real estate experts like LA native, Steven Taylor say credit is partly due to the coronavirus pandemic.
In the last few months,
home sales rose 19% in Southern California. While many lower-income workers are
unemployed and facing evictions, the pandemic has actually left higher-income
employees in good financial standing. These middle to upper class residents are
left in a good position to buy new homes, and the pandemic has only increased
their motivation to do so.
Being stuck at home has
been a major inconvenience to many Americans, including Los Angeles residents.
A large number of families in LA live in multi-family housing units, or small
one-story homes. Now that everyone is working from a home office, homeschooling
their kids, and trying to stay sane, people are scrambling for more space. Lack
of privacy and cramped quarters are motivators for families to sell their
starter homes and move into larger houses as soon as they have an opportunity.
This
burst in buyer motivation has put Los Angeles Real Estate in a good place, even
as we approach the year-mark of the international pandemic. Markets are high,
interests are low, and those who can afford to are taking advantage. Why would
residents who are looking to upgrade stay in a tight apartment? According to Steven Taylor, Los Angeles
native and real estate investor, home-purchase mortgages are up 25% from 2019.
“When it comes to the LA residential real estate market, it’s as if the
pandemic recession is a non-factor.”
Upper-class
families aren’t the only group applying for home mortgages. Los Angeles is full
of millennials who are shopping for homes for the first time. LA is a city of
opportunity, and when it comes to success, age doesn’t discriminate. The tech,
social media, and entertainment industries have put many young people in a
position to invest in real estate. Young home buyers are scooping up properties
fast. Zillow predicts that this could be the best year for residential housing
sales since 2006.
On the other hand,
commercial real estate has taken a hit since March. The majority of those who
are still employed are now working from home, and office space rentals are
steadily declining. The new normal has significantly decreased the demand for
commercial real estate in Los Angeles.
While this could be seen as a negative, it has also opened up opportunities for
investors to transform spaces to create much needed affordable housing.
As we move into the
spring, real estate investors will be keeping their eyes on the numbers. Will
the LA housing market continue to soar? How will commercial real estate adapt
to meet new demands? It is clear that COVID-19 has had an impact on Los Angeles
real estate - the results may continue to be even more unpredictable than
anyone expected.
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