Studio City Real Estate Market Prices, Trends, and Forecast 2023

Studio City Real Estate Market Prices, Trends, and Forecast 2023

  • Peter and Cindy Lorimer
  • 04/12/23

Studio City flaunts a celebrity population and a luxury market full of expansive mountainside estates and mid-century properties. Michelin-star restaurants alongside old-school establishments give the neighborhood a classy small-town energy. When deciding whether to buy or sell a home in Studio City, here’s what to know about local market conditions.

Studio City market prices

Studio City’s real estate prices are on the higher end, with a median price of $1.591 million. High prices are caused partly by limited home supply as the vacancy rate is a minuscule 0.7%. Most properties in the area are studio, two-bedroom, or three and four-bedroom homes and apartments with a mix of homeowners and renters. The average rental rate in Studio City is $4,539, which is higher than 88.6% of other California neighborhoods.

Looking at Los Angeles

Los Angeles’s market prices and trends are similar to Studio City. The median price for a single-family residence is $1.15 million, a 0.2% increase compared to last year. A slight price decline is visible in the sales to list price percentage, which is currently 99.2%. This is likely due to housing supply pressures and the challenges of high-interest rates. Rental rates across the city aren’t as high as in Studio City, ranging between $2,357 and $3,777.

Less buyer demand can be seen in decreasing home sales, down 25.3% compared to last year. Fewer home sales allow inventory to replenish slowly, which is good news for buyers in the area. Active listings in Los Angeles have increased by 47.3% compared to last year, creating more options on the market. Even so, homes are still going quickly, spending a median of 21 days on the market.

County trends

Greater LA County trends may hint at the future trajectory of Studio City. The median price for single-family detached homes has decreased 6% year-over-year. This gives buyers in the area more opportunity to negotiate with sellers or wait for a better deal. Home sales have also decreased, down 33.5% since last year.

Since last year, unsold inventory across the county is on the rise, up 54.5%. The county currently has 3.4 months of unsold inventory for single-family detached homes. Balanced markets typically have four to six months of inventory which the county is inching towards. Homes spend a median of 30 days on the market, a significant increase of 200%. Although market times are still shorter, the extra time gives buyers more opportunities to find the home they want.

Forecast for Studio City

Studio City’s real estate market will parallel greater Los Angeles and the County trends. A driving force of market conditions is high mortgage rates limiting purchasing power. High rates will lead to further decreasing home sales and more rental challenges entering the rest of 2023.

Continued interest rate pressure

High-interest rates across the county add an extra obstacle for buyers interested in Studio City real estate. According to NAR, a monthly mortgage payment in LA County costs $4,286. This is $1,598 higher than last year’s $2,688. High-interest rates reduce how much buyers can qualify for, which limits their search. A buyer in California can expect an average rate of 5.99% for a 30-year fixed loan, while a 15-year fixed loan has an average rate of 5.375%.

Decreasing home sales

With few options and high prices, home sales across Los Angeles and in Studio City will continue decreasing. In fact, the home sales volume decreased from 2018 through 2020, even with extremely low-interest rates. The appeal of low-interest rates took full effect in 2021 when the home sales volume shot up 26%. Since the highs of 2021, 2022 scaled back with a 25% decline.

Compared to 2019, home sales in 2022 were 12% lower. This trend will likely persist through 2023 as buyers turn to renting and sellers decide to keep their properties rather than risk a high mortgage payment. Until supply can match demand, home sales will remain restricted.

Increasing inventory

After being severely depleted in 2021, Studio City's inventory levels are starting to come back. As seen in city and county-level statistics, inventory is still below balanced levels but heading in the right direction. Market conditions will continue shifting out of seller territory as buyers wait for home prices to decrease and inventory to replenish fully.

Low homeowner turnover

Homeowners and renters are moving with less frequency than before due to market trends and the local economy. With a flat homeowner turnover in 2021, an increase isn’t expected until 2025 or 2026. In the past year, the unemployment rate in LA County was 4.40%. This is much higher than the national rate of 3.6% and may impact low homeowner turnover. To return to 2019 rates, the county would have to regain 29,300 jobs.

The turn to rentals

Homeownership is declining across the county, with the average rate at 50.2%. This is lower than the state percentage of 56.6%. A mix of persistently high property prices, tight inventory, and high mortgage rates drive residents in the area to rent.

In response to rental demand, the county increased its construction rates in 2022. Multi-family construction starts rose 12% in the year, while single-family starts increased by 5%. Those in the area should remember that this growth is emerging from the 2021 decline of construction caused by a lack of labor and materials.

Ready to invest in Studio City?

Studio City’s expensive housing market will continue to cool throughout the rest of 2023. Although real estate is expensive, decreasing sales and increasing inventory will push sellers to price their properties lower. Rental competition will continue as well, seen in high rental rates and limited supply. Navigating Studio City’s market is difficult without professional help. When you’re ready to start a search or you’re selling a home in Studio City, contact experienced agents Peter and Cindy Lorimer to guide you through the process.

*Header photo courtesy of Shutterstock

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