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
Looking at Los Angeles
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.
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
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.
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.
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*Header photo courtesy of Shutterstock