Most are in the San Gabriel Valley or on the Westside
In some corners of the Southland, it’s as if the housing crash never happened.
Home prices in a dozen Southern California ZIP Codes have passed their peaks during the housing bubble, according to research firm DataQuick. Most are either in the San Gabriel Valley, a magnet for buyers from Asia, or on the Westside, where the technology industry is booming.
Across the region, home prices remain far below their peaks despite an explosive run-up in the first half of 2013. But nominal prices in some affluent neighborhoods have entered uncharted waters.
The return of bubble-era pricing could foreshadow a spillover effect, experts said. As buyers get priced out of prime areas, they may look to adjacent neighborhoods — juicing demand there and pushing up prices.
Four prime areas are on Los Angeles’ Westside, in Venice, Palms, Mar Vista and Culver City. Buyers from the area’s burgeoning technology industry — known as Silicon Beach — have fueled price increases, along with broader gentrification.
Despite steep prices, experts don’t see a bubble forming in these areas.
“There are important, fundamental reasons that prices moved up,” said Stuart Gabriel, director of UCLA’s Ziman Center for Real Estate.
The neighborhoods are near job centers, the urban core and, often, good public schools, Gabriel said. The areas have also recovered faster because prices there simply didn’t fall as steeply as in other areas during the crash. And each has unique factors driving the current price growth.
On the Westside, the arrival of hip cafes and other amenities catering to tech industry workers has, in turn, attracted others to these areas.
In rapidly gentrifying Venice, the median price in the fourth quarter of 2013 was $1.34 million. That’s nearly 3% higher than during the bubble and 84.4% more than the bottom during the crash.
That spillover is welcome news for current owners looking to build home equity. Some have cashed in, selling to developers who have built larger, new houses with affluent buyers in mind.
But not everyone benefits from the surge in prices.
“It’s not good news for the police and firefighters and teachers and nurses — the people who do important work in our communities but cannot afford to live in our communities,” UCLA’s Gabriel said.
Source: LA Times