According to the real estate website Redfin, Los Angeles’ historic West Adams district is now one of the 10 most competitive real estate neighborhoods in the country. And it’s the only Los Angeles neighborhood on the list, ranking with other ultra-hot areas in San Francisco, Boston and Seattle.
In its analysis, Redfin notes that median home prices in West Adams (which Redfin defines, differently from many Angelenos, as being exclusively south of the 10 freeway) are a still relatively reasonable $550,688. But those comparatively low prices tell only part of the tale. There was also a 22.5% increase in home prices in the area in 2016, sales averaged 103.7% of asking price, 68.6% of homes sold above the asking price – in an average 12 days on the market – and 37.9% of sales were all cash (which indicates developer and flipper involvement).
While these statistics may be surprising to many Angelenos, who may still think of West Adams as a former real estate powerhouse that has been down on its luck for the last 50 or 60 years, the Redfin news was not such a shock to people who have been following trends there for the last year or so. In fact, in September, 2016, the LA Times ran a story called “Home prices soar near USC as flippers and developers rush to ‘one of the best neighborhoods left’,” which said:
“…Jefferson Park and adjacent West Adams, largely working-class neighborhoods west of USC, have become some of the hottest real estate markets in the city.
Flippers are active, bidding wars are common and sales prices have topped last decade’s bubble — a threshold surpassed by only certain neighborhoods, including the Westside and gentrifying neighborhoods in Northeast Los Angeles.”
Also, in a much less scientific poll, but one that still captures at least some degree of local enthusiasm, West Adams was also named “Neighborhood of the Year” in the 2015 Curbed Cup popularity poll by the CurbedLA website.
So what has awakened the sleeping giant of West Adams real estate, a market avoided like the plague by both developers and upper middle class homeowners for decades? One word: transit. And, more specifically, the Expo Line. According to the Times’ September story:
“The two booming areas are now linked by the Expo Line light rail. And come 2019, the Crenshaw Line is slated to connect the Expo Line to a station near Los Angeles International Airport.
“Metro has been a big driver,” said Teles Properties agent Robert Rodriguez. “You can walk to the Expo line and go all the way to Santa Monica.”
One can’t help wonder whether other new transit lines will have similar effects in other neighborhoods, even those not so previously disadvantaged as West Adams. For example, with Phase 1 of the Purple Line extension now under construction through many of our Wilshire-adjacent neighborhoods, and the announcement this week of full funding for Phase 2 (from La Cienega to Westwood), will there be a similar effect on real estate values not just along the Wilshire corridor itself (which is already seeing surging development), but in adjacent areas as well?
The answer could be yes. A 1999 study called Impacts of Rail Transit on Property Values looked at this very question in 12 areas around North America and concluded that:
“In general, proximity to rail is shown to have positive impacts on property values. This conclusion is based on several measures of property value such as sales prices of single-family homes, apartment rents, and median home value.”
Areas near the BART system in San Francisco were part of that study, and in that example, the study found that:
“…for every meter a house in Alameda County was located closer to the nearest BART station, its sales price in 1990 increased by $2.29. For every meter a house was closer to the nearest BART station in Contra Costa County, the sales price increased $1.96. According to the models, a house immediately adjacent to BART would sell for close to 38% more than an identical house not near any BART service (35 kilometers away).”
This kind of increase was also supported in a more recent study published in the Journal of Transport and Land Use in 2012. Called The impact of a new light rail system on single-family property values in Charlotte, North Carolina, this study found that:
…before the [Charlotte] rail system began operation, proximity to the future rail corridor had a negative influence on home prices… However, when compared across the four time periods, housing prices have started to react positively to light rail investment during the operational phase.
This seems consistent with what’s been happening in West Adams since the Expo Line opened last year…and it may carry some future import for our Purple Line-adjacent neighborhoods in the near future.
Also, if you enjoy speculating about such things…you needn’t stop with the Purple Line. There are even longer term discussions happening now about possible north/south transit lines and how they could affect our area.
For example, while a Wilshire/Crenshaw destination for the Crenshaw transit line was nixed many years ago, discussions about other possible northward extension paths for that line are ongoing, and most often center on San Vicente Blvd., which still has a large center median (from the old trolley right-of-way) that would provide the necessary width for an above-ground light rail passage. But that’s far from a done deal. And in December, we ran across a differing opinion, from Cal State grad student Scott Frazier and published in the Urbanize.LA blog, which acknowledges San Vicente’s prominence in this discussion…but then goes on to muse that La Brea might be a better choice, even if – unlike an above-ground San Vicente extension – this one would have to run underground:
“It’s rare in the history of Los Angeles’s light rail system that the baseline route for a transit project is also the fastest, the cheapest, and the most grade-separated option. That is, however, the case here. The feasibility study noted that Fairfax and La Brea have constrained rights-of-way (by L.A. standards) that would essentially rule out the possibility of running any portion of the extension at-grade along either route. If you’re a transit rider, breathe a deep sigh of relief. The La Brea route, running at Red Line speeds, would connect the Red Line and Expo Line in 13 minutes, about half the time it would take by car even in light traffic.”
Sound attractive? It will be interesting to see if others, including future real estate buyers, think so, too.