A new client inquired about the income unit market for the nearby cities in Los Angeles. Here are the updated city reviews and our thoughts on each area.
Beach Cities: Manhattan & Hermosa are very pricey in general and would strictly be redevelopment or pure appreciation plays. We've helped investor's purchase in South & North Redondo and still recommend those areas, but there aren't any residential units for sale under $1MM currently. El Segundo is also climbing in prices, but hasn't fully advanced to "beach cities" status for many prospective tenants. 12.8% value increase 2015. Projected increase 2016: 4.1%
Torrance & Lomita: South Torrance is very strong with good schools and high demand for rentals. North Torrance & Lomita are popular with "blue collar" tenants but those areas are not ready for redevelopment on a large scale. 3.1% value increase 2015. Projected increase 2016: 1.5%
Lawndale: Very popular with wealthy Manhattan Beach residents who want to invest nearby. Had strong appreciation in the last 3 years. 7.3% value increase 2015. Projected increase 2016: 2.9%
Palos Verdes: Typically "trophy" properties and only a few areas where they've been zoning approved. Strong schools and solid appreciation. Cap rates usually on the lower side. Mainly 4 unit or larger apartments. 5.4% value increase 2015. Projected increase 2016: 2.1%
San Pedro: (LA City Rent Control) One of the last water frontage areas in Los Angeles to not have a huge price jump. The city has a large selection of apartments and often some room to negotiate on purchase price. Low ranking of the high school and larger percentage of rehab facilities have held values back. We recommend purchasing "above Gaffey" for low vacancy, however better cap rates are available closer to the harbor. 3.6% value increase 2015. Projected increase 2016: 2.2%
Wilmington & Harbor City: (LA City Rent Control) - Stronger cap rates. Some pockets of higher crime and weaker schools have held these neighborhoods back. Our clients with units in west Wilmington say they have very little vacancy due to high demand. 2.2% value increase 2015. Projected increase 2016: 2.3%
Would you like to know what units are selling for in these cities? Just give us a call.
- Josh Toering, REALTOR with Charlemagne Intl Properties