The massive growth that drove the luxury apartment market in Los Angeles is starting to slow, but that doesn’t mean prices are following suit.
In fact, the average price for properties over $3 million year-over-year increased 32.4% to $1,993 per square foot in the second quarter, according to a new development market report from Compass.
For condominiums valued at more than $3 million, sales volume increased “by a staggering 25%, with an average net price of $5.2 million,” said Krissen Heathwood, senior managing director of Compass Development Marketing Group, Western Region, Who added that much of the sales volume was attributed to the shutdown in the Century Plaza development. This project presents the renovated historical hotel of the same name, which includes 73 luxury apartments and 400 hotel rooms. The two new 44-storey glass towers contain 363 luxury apartments.
Beverly Hills has led the way in price growth over the past year. Average sales prices for stylish condos in the stylish neighborhood jumped 66% to $7.1 million year-over-year from the second quarter of 2021 to the second quarter of 2022. Two of those sales exceeded $10 million, the report noted.
“The Rosewood Residences, which will open in 2024, is at the heart of a thriving corridor that will be the future of residential real estate around Beverly Hills,” said Ms. Heathwood. “It is located at 9900 Santa Monica in the center of Beverly Hills, adjacent to other pipeline projects, including Aman Residences and One Beverly Hills, which collectively create the most anticipated pocket of real estate in the city.”
The report said the average sale price in West Hollywood rose 22.4% to more than $4.2 million, and prices are expected to rise with the sale of apartments in new projects such as 8899 Beverly, Mandarin Oriental, Pendry Residences and Four Seasons Residences.
The strong price growth is a reflection of the historically limited number of new luxury apartment developments in the city. There are only five projects in the pipeline: Rosewood Beverly Hills and Fairmont Miramar in Santa Monica, One Beverly Hills/Aman Residences, 8150 Sunset and Angels Landing in downtown Los Angeles.
The small number, according to Ms. Heathwood, is typical.
Buyers in Los Angeles place a premium on privacy, security, space, and service, and new developments offer.
“Unlike other large projects, luxury condominiums in Beverly Hills are centered around the unit experience, certainly the project’s location and security profile,” said Ms. Heathwood. “Indoor space and unit size are critical in this market at higher price points, as affluent buyers look for ‘real estate alternatives’ to large luxury homes.”