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One might question this notion and it actually holds a little bit of irony. The word “luxury” already gives away that whatever the product is, it is a liability. Luxury, by definition, is expensive, usually a delicacy, elegance or refinement rather than a necessity, so what makes luxury homes a good investment if its purpose is to cater to one’s splendor? 

Before we dive deeper, we must go into the core meaning of “luxury real estate” by today’s standards. 

One misconception is that the price tag is what defines luxury properties, it does not. While the price tag is a significant factor, it is not the only one. There are more factors that constitute a luxury investment house.

Luxury properties are primarily defined by their uniqueness and exclusivity, which raises its value more than the cost of the actual materials used and construction. 

For properties like these, one might also consider location – the residence’s proximity to another luxury home, to the community, and to famous and storied parts of a city all add into the value of a luxury investment. This is the case for trophy addresses such as New York City’s Park Avenue and Los Angeles’ Hollywood. 

The proximity to high-end activities also plays a role, such as how near the home and lot is to shopping districts, fine dining restaurants, museums, etc. The view and environment are factors also. Sometimes, people want views of beautiful landscapes like the lakes, oceans, rivers, and mountains. 

Another key factor that defines luxury properties is their features. Luxury homes contain the same features other homes do, but they do it on a much larger scale. Tighter security to the point of exclusion, custom architecture, interior design, foreign furniture, chef’s kitchen, and many more unique features.

All of these traits are what makes a luxury property luxurious, and it’s all of these too that makes their value skyrocket. The aesthetic of looking rich, of course, comes with a price. That being said, here are the benefits of buying a luxury home:

  1. Involves Less Risk

A luxury property type of investment does not carry as much risk as paper investments especially when investing in the long term. Equity and home prices increase over time because they’re physical assets which is unlike stocks that’s held up by a nebulous force and are prone to dropping its value anytime. 

  1. Assured Capital Growth 

Land and property never decreases in value. Instead there is a steady increase called capital growth. You’re always guaranteed that in real estate. That’s because space is becoming more scarce in the physical world, thus real estate prices rise due to the rarity of land area. 

  1. Rental Opportunities

Luxury investment properties are a prime asset to become luxury rentals. If you own a property with several of the characteristics above, then you’re qualified to liquidate your assets as a rental. There’s a huge market for luxury rentals for lease or for a couple day stays.  

Not only that, your property can also be event venues if it qualifies in that category.

  1. Tax Benefits

Tax benefits for luxury properties could exist in the form of deductions on property taxes, lower mortgage payments and interest rates, and depreciation benefits. 

  1. High Resale Value 

If your home has high-value features such as a desirable location, exclusivity, proximity to entertainment and dining areas, or has an interesting history, you’re going to have a better chance of ROI than other forms of assets. 

  1. Effective Inflation Hedge 

We already know that the value of an investment property increases overtime, and can better keep up with inflation. If your money is tied up with an investment property, your funds are going to grow along with it. It’s only going to continue to rise. This helps investors because their property will never be behind inflation. As the cost of living rises, the value of investment property does, also. 

To put it simply, inflation is a benefit or will not harm luxury property investments.

This striking 1924 Spanish home with an income-producing duplex that’s surrounded by lush and landscaped greens. This property serves as your home and a passive source of income if that’s what you’re aiming for. The garage has also been converted to a guest studio with a kitchenette and bathroom.

Exceptional proximity to prime Melrose Avenue; Urth Caffe, Restoration Hardware, Alfred Coffee, Melrose Place and La Cienega Blvd.

Scroll to see more of this property!

This 4 beds, 4 baths, 2,927 sqft penthouse condo unit is for sale at $3,295,000

Reach out to us if you’re interested in this property or want to know if you’re qualified to purchase! 

Photo and listing courtesy of Jacob Zacuto | DRE #01377441 | Zacuto Group

And Jane Schore | DRE# 00980877 | Coldwell Banker Realty

To get in contact with us, click here.

To this property’s listing page, click here.

The Big Story

July sees a huge mortgage rate drop and more inventory on the market

Quick Take:

• In July, the average 30-year mortgage rate declined significantly, by 0.50%, positively affecting affordability. Economists predict that mortgage rates have already seen their peak this year, near 6%, and will stabilize around the current rate of about 5%.

• Homebuyers had more inventory to choose from than this time last year, which indicates that the market is becoming healthier. 

• The economy feels uneasy, but the housing market isn’t showing signs of a major reversal.

Home prices continue to reach new highs even as demand declines

Home prices generally stagnate this time of year, so it’s more challenging to ascribe causation for why price growth has decelerated nationally to economic factors — inflation, mortgage rates, supply shortages, and looming recession — when they coincide with long-term seasonal trends. Historically, prices increase in the first half of the year and flatten in the back half. Prices in 2020 bucked this trend, increasing through October before flattening in the last quarter of the year. Although prices rose much higher in 2021, the historical trend returned. This year has, of course, come with different economic and psychological drivers than 2020 and 2021, especially in the housing market. 

For many, if not most of us, the pandemic brought us largely inside our homes, increasing the desire for larger, nicer private spaces. The mass movement to remote work meant that proximity to an office, usually a primary selling point in major metro areas, mattered less or not at all. Many of us experienced our home spaces, work spaces, and communal spaces becoming one, and realized that the home we usually spent little time in would simply no longer work for us. This need for a bigger space, combined with extremely low-rate financing, a substantial increase in disposable income, and more time to look for a new home created a boom in demand in an already undersupplied housing market. As a result, the median sale price rose higher and faster than any other point in history, up 36% over the past two years according to data provided by the U.S. Department of Housing and Urban Development. For reference, in the eight years preceding 2020, the median home price rose a total of 38%. 

As we know, housing isn’t the only asset to rise since 2020. Nearly everything has become more expensive, and inflation (CPI)*, which has rarely ever risen above 5%, ticked above that mark in the summer of 2021 and has only increased since then. The Federal Reserve, which has a dual mandate of price stability and maximum employment, has one major tool: raising the federal funds rate†. By doing so, the Fed indirectly affects the debt markets, thereby increasing other interest rates, such as mortgage rates. 

In the first half of this year, the average 30-year mortgage rate rose nearly 3%. It’s hard to overstate how significantly that rate increase affects affordability. To hopefully simplify the explanation, we will use a $1 million home that is fully financed for illustrative purposes. For a $1 million home, a 3% increase in interest rates raises the monthly mortgage cost by 42%. It’s fairly safe to say that income hasn’t risen by 42% for most people, which means that many potential buyers are priced out of buying homes, softening demand. For those potential buyers waiting for a correction of the residential real estate market, home prices would have to decline by 30% for the monthly costs to be equivalent — that is, $700,000 at 6% is the equivalent monthly mortgage cost of $1 million at 3%. If the housing market experienced such a large correction, there would likely be much larger concerns in the global economy than home prices. Barring a collapse of the entire financial system, supply would simply be too low for a major correction. Luckily for potential homebuyers, mortgage rates dropped by 0.50% in July, and many economists predict that the mortgage rates will flatten out around 5% even as the Fed continues to raise the federal funds rate. This is partially because the market largely understands and has already accounted for the Fed’s rate hike path, which will continue until inflation begins to meaningfully decline and recession worries wane. 

The economy has felt a little uneasy lately — a classic “will they, won’t they?” when it comes to the recession — but for now, we aren’t technically in a recession because job numbers are too good. Demand for homes has clearly softened, which is fine in a severely unbalanced market. We will likely see less significant price appreciation in the second half of the year due to seasonal norms and higher mortgage rates. The market remains competitive and homes are selling quickly. However, buyers are seeing more inventory than last year, which is good for the market. As always, we will continue to monitor the housing and economic markets to best guide you in buying or selling your home.

The Local Lowdown

Quick Take:

• Like the rest of the country, home prices in Southern California have hit a ceiling after two years of substantial growth, up a total of 29% for single-family homes and 33% for condos.  

• Demand for homes is clearly softening as sales decline despite more inventory.  

• New listings declined in July, a seasonal norm, which means that inventory in 2022 will likely peak at historically low levels.

Is the market balancing? Tentatively, maybe!

Median single-family home and condo prices declined month-over-month but still remain higher than last year across counties and dwelling types. These price movements are within the bounds of normal price variability, but after large price gains, it feels like any downward movement signals a market correction. As mentioned in the Big Story, prices tend to stagnate in the summer and fall months when inventory is at its highest, so we aren’t ringing the alarm bells quite yet. Homes over the past five years have become less affordable, yet demand boomed. With 30-year mortgage rates potentially settling around 5%, fewer potential buyers will participate in the market than they did last year when mortgage rates were at all-time lows.

Supply is still historically low, which will protect prices from experiencing a major downturn. Prices will likely follow a similar trend as last year, holding relatively steady through the summer and fall months. If you’re following home prices closely, as we tend to do, you don’t need to worry about losing equity in your home, or softening demand, or even an official recession — so long as it doesn’t affect your job. The housing market remains incredibly strong in Southern California.

Sales slowdown

Southern California’s housing inventory continued to rise in July, following historical seasonal trends. Inventory tends to peak in July, which appears to be the case this year. The number of homes for sale has trended lower over the past three years and settled at historically low levels. There were over 13,000 fewer homes on the market in July 2022 than in July 2020. Although 2022 has had one of the lowest inventories on record, we were pleased to see that inventory has increased every month so far. With the substantial drop in sales and new listings, down 20% and 16%, respectively, from June to July 2022, the peak inventory levels for 2022 will undoubtedly be the lowest on record.

The decline in sales, despite rising inventory, indicates that demand is softening. We aren’t saying that demand is low, but it’s trending closer to balanced between buyers and sellers than we’ve seen in years.

Months of Supply Inventory inches toward a more balanced market

Months of Supply Inventory (MSI) quantifies the supply/demand relationship by measuring how many months it would take for all current homes listed on the market to sell at the current rate of sales. The long-term average MSI is around three months in California, which indicates a balanced market. An MSI lower than three indicates that there are more buyers than sellers on the market (meaning it’s a sellers’ market), while a higher MSI indicates there are more sellers than buyers (meaning it’s a buyers’ market). Notably, single-family home MSI has climbed significantly over the past four months, reaching three months or more for Los Angeles, Riverside, and San Diego for the first time since May 2020, which was an anomalous month due to the early days of the pandemic. One data point does not make a trend, but we are watching closely.

As your local real estate experts, we feel it’s our duty to give you, our valued client, all the information you need to better understand our local real estate market. Whether you’re buying or selling, we want to make sure you have the best, most pertinent information, so we’ve put together this monthly analysis breaking down specifics about the market.

As we all navigate this together, please don’t hesitate to reach out to us with any questions or concerns. We’re here to support you.

– Dominic Pietrangelo, LIC #01860025

Check out this one-of-a-kind dynamic 2-story top-floor North/East corner penthouse condo with soaring ceilings and private rooftop deck in West Hollywood’s premier neighborhood.

This unique flex-space is currently being used as a 1 bedroom with an extra den/TV Media Room, a separate office, & a loft with its own bathroom. It could easily be converted to a 2 or 3-bedroom condo depending on the buyer’s needs.

Scroll to see more of this dynamic unit!

This 2 beds, 3 baths, 1,529 sqft penthouse condo unit is for sale at $1,299,000

Reach out to us if you’re interested in this property or want to know if you’re qualified to purchase! 

Photo and listing courtesy of Allie Joel Riley | DRE #01398467 | Compass

And Michael Collins | DRE# 00963037 | Coldwell Banker Realty

To get in contact with us, click here.

To this property’s listing page, click here.

The school season is coming up and as parents, we want to make sure that our children are prepped and ready for this school year. So, we made a checklist for you to follow to assure that your school-goer is in tip-top shape externally, and internally! 

[ ] Buy clothes and supplies – Go through clothes to get rid of items that don’t fit or are too worn out and get a school supply lists, but check for items you already have, then buy the things you still need.

[ ] Label everything – Putting labels on everything reduces the time and effort you have to use into finding them. Saving you more time to prepare your kids lunches! 

[ ] Get on a routine – It’s important for your kid to have an established routine. Writing out your daily routine and rehearsing them with your child would get them to develop the routine faster. 

[ ] Create a lunch and snack station –  A lunch and snack station is for you to be organized and not always running around the kitchen. 

[ ] Encourage independence in kids – Your kids are growing every day, and they mature each grade level they step on. Encouraging your kids to be independent early on in life promotes confidence and self-esteem as well as motivation and perseverance in school.

[ ] Use a calendar or planner – Check the school calendar to make sure you are aware of all the important dates: social events, registration, meet the teacher, etc.

[ ] Get on a Housekeeping Routine – having a home cleaning routine is important for lots of reasons, but the most important is that it provides order and structure in your house. Your kids will feel a sense of accomplishment and keep your home nice and clean. It’s a two-in-one deal! 

[ ] Prepare the kids for the first day of school – Adjust schedules so that internal clocks are ready for an early school wake up after so long. 

[ ] Set goals – when you set goals for your kids, it obligates them to take action, regardless of the obstacles they may face. That’s an attitude that will get them through hard times in their school years. Practicing early on will condition them to keep moving forward.

[ ] Get bags, clothes, & lunches ready the night before – Get everything they need ready the night before they go to school. No one likes panicking early in the morning to beat the bus. 

The bottom line is making a checklist will save you from unnecessary preparations and give you and your kids a sense of stability while preparing for this new chapter in their lives. It helps you stay more organized, and at the same time assures you that you will not skip any important steps in the process.

Landon Pacific’s listing spotlight for this week is this condominium at the Pendry Residences, which is a collection of homes designed to meet discerning eyes and high standards. This unit welcomes you with your own private vestibule as you step out of the elevator. High ceilings and white oak floors lead you to the great room and a gracious size terrace to take in the mesmerizing view of the DTLA skyline and city lights.

The seller loves the building/staff/amenities and hotel access to the Britely, Sun Rose, live music and performance venue, spa, restaurants, and rooftop pool, as well as the proximity to other upscale restaurants and bars.

Scroll to see more of this stunning unit!

This 2 beds, 3 baths, 2,393 sqft home is priced at $4,525,000.

Reach out to us if you’re interested in this property or want to know if you’re qualified to purchase! 

Photo and listing courtesy of Lytel Young  | DRE #01710150 | Corcoran Global Living 

To get in contact with us, click here.

To this property’s listing page, click here.

Planning a trip, going on a business trip or just plain passing through Beverly Hills? Beverly Hills offers a large variety of adventures or simply filling your free day with activities, shopping and sightseeing. And the best part of it all is that there’s always something new to discover in the world’s most famous zip code. 

But of course, there are the things that you just cannot miss out on once you’re here. These don’t-miss spots are great to visit during one perfect day in Beverly Hills.

Check them out! 

  1. Shopping down Rodeo Drive

First on our list is the fabulous Rodeo Drive. Your trip in Beverly Hills will not be complete without having checked this off your bucket list. Shopping and Rodeo Drive are two things that go hand and hand. It’s a two-mile long street neighboring luxury, fashion and entertainment stores like Gucci, Dior, Tiffany & Co., and many more. Famous landmarks that you should also consider visiting are the Beverly Wilshire Hotel, the statue “Torso”, and the House of Bijan. 

  1. Take a photo in front of the Beverly Hills sign and Lily pond

Another photo-op that wouldn’t complete your Beverly Hills trip is in front of the Beverly Hills Sign and Lily Pond in Beverly Gardens Park, between North Canon Drive and North Beverly Drive.

  1. Experience lunch at Spago L’exterieur

Everyone, and we mean everyone who’s dined at Spago L’exterieur would say the same amazing things about the place. It’s a 6,500-square-foot transparent tent-like outdoor garden, which happens to be an extension of one of the most iconic and popular restaurants in the city, primarily, Spago, a legendary award-winning restaurant co-owned by celebrated chef, Wolfgang Puck, that sets the restaurant-standard for all others. 

  1. Withdraw a cupcake from the Sprinkles ATM

This adorable contraption is located just outside of the famed Sprinkles bakery. Get ready to indulge your sweet tooth 24/7 at the world’s first cupcake ATM. It’s like a sweeter and yummier version of its cash counterpart. This high-tech touchscreen machine grabs your favorite cupcake and dispenses it in seconds. You can count on your cupcake ATM to have the signature red velvet cupcake in stock and other rotating selections of daily offerings.

  1. Book a tour with Beverly Hills Trolley Tours 

The Beverly Hills Trolley tour takes you through a 40-minute tour through downtown Beverly Hills and see famous sites such as Rodeo Drive, the Beverly Wilshire Hotel and Mulholland Drive.

  1. Roam around Franklin Canyon Park 

Franklin Canyon Park is located between the San Fernando Valley and Beverly Hills. The park consists of 605 acres of chaparral, grasslands, oaks forests, lakes, and hiking trails. If you’re having fun walking, make sure you go visit the Sooky Goldman Nature Center, the Sam Goldman Amphitheater, and the Eugene and Michael Rosenfield Auditorium.  

  1. Tomoka Spa

After all those eating and walking around, it’s time to treat yourself to a mani/pedi, a soothing massage, or full body rejuvenation from one of Beverly Hills’ world-class spas that offer the very best in pampering services. Tomoko Spa offers treatments that replenish the body and soul. The experience is pure relaxation and bliss. 

Landon Pacific’s listing spotlight is this Hover House 3 situated on the historic Venice Canals of Los Angeles. This was built in 2008, representing the third in architect Glen Irani’s series of Hover Houses which focuses on maximizing outdoor living environments. This is possible by structurally “hovering” the building envelope above the land to create space for outdoor living environments.

This 3 bedroom, 4 bathroom, 2 office, and 3 story home features ground-to-roof canal-facing glass flooding the living space with light and offering show-stopping canal, mountain, and city views from the living areas and secluded rooftop deck.

A property just steps away from the beach, moments from Abbot Kinney, great restaurants, shops, and all the Venice has to offer!

Scroll down for a tour of this outstanding property!

This single-family home is priced at $4,195,000.

Reach out to us if you’re interested in this property or want to know if you’re qualified to purchase!

Photo and listing courtesy of  Jesse Weinberg  | DRE #01435805 | Jesse Weinberg 

To get in contact with us, click here.

To this property’s listing page, click here.

The majority of Americans now believe in the value of real estate as an investment. According to an annual survey from Gallup, not only is real estate viewed as the ideal investment for the ninth year in a row, but more Americans than before have voted on it. 

This Gallup Poll graph which started in 2011 clearly indicates the continued rise rise of positive opinion people have about real estate as an investment.

Inflation is high, but Americans certify that owning your own home is still a powerful financial decision to make. 

So, how can an investment in real estate benefit you during high inflation? Because inflation has reached its highest level since the 1980’s, it’s more important now more than ever to recognize the financial benefits of homeownership. When inflation rises, it means that all prices of goods, services, housing costs and more are increasing. If you buy at a certain inflation rate, you’ll lock in that value in your monthly housing payments, effectively shielding you when prices start to increase again. 

If you resort to being a tenant, you won’t have the same benefits. Danielle Hale, Chief Economist at says, “Rising rents, which continue to climb at double-digit pace… and the prospect of locking in a monthly housing cost in a market with widespread inflation are motivating today’s first-time homebuyers.” 

Does a house increase in value during inflation, too? Yes. Another thing you should also realize is that your house is an asset that typically increases value over the years, even during inflation. Mark Cussen, Financial Writer for Investopedia notes, “There are many advantages to investing in real estate… It often acts as a good inflation hedge since there will always be a demand for homes, regardless of the economic climate, and because as inflation rises, so do property values…”

Buying a home is a big and powerful decision. It’s clear why many people view it, especially Americans, as the best long-term investment, even in the midst of a worldwide inflation crisis. If you want to better understand how buying a home could be a great investment for you, let’s connect today.

Landon Pacific’s listing spotlight is this magnificently remodeled mid-century modern in the famed Bird Streets. This home underwent a meticulous and thoughtful renovation maintaining the architectural integrity of this gem that floats above the Sunset Strip in one of the most desirable locations in the world.

The idyllic atmosphere covered in the most beautiful stones, roman clay covered rooms, herringbone floors and soaring angled ceilings is the ultimate Los Angeles dream home. This home boasts a world of opportunity for the right buyer.

Keep scrolling for a tour of this property!

This single-family estate is priced at $5,690,000.

Reach out to us if you’re interested in this property or want to know if you’re qualified to purchase!

Photo and listing courtesy of  Stefani Schmacker ‘Stolper’ & Kevin Stolper | DRE #01957452 & #02006447 | The Beverly Hills Estates

To get in contact with us, click here.

To this property’s listing page, click here.

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