Since the end of the economic recession, one of the major drivers of demand for luxury homes has been a plethora of wealthy international investors who are looking for a safe place to earn a nice return, while still in a historically low interest rate environment.
Many of these individuals have pulled away – either temporarily, or on a permanent basis – from the falling oil prices, as well as various economic situations, such as the slowing Chinese economy. This can make particular areas of the U.S. an ideal haven for such investors – especially in vicinities like New York City and parts of Southern California.
Being a primary city for luxury properties, many global investors have been drawn to the L.A. area’s solid track record in the past, along with its substantial potential for growth going forward. Plus, in comparison to some other sought after areas like New York, Los Angeles can offer an additional perk for purchasers – land.
In fact, when comparing some of the most expensive cities across the globe, with the average per-square-foot price being in the high-four to mid-five-figure range, Beverly Hills can provide a significant bargain due to the fact that you can oftentimes pick up the property, along with half an acre of yard.
In addition, while L.A. is a key city for attracting many buyers from overseas, the area has also continued to remain in relatively high demand from local residents, too. So, for those who are selling in this market, now could be a good opportunity to list.
With that in mind, homes listed in the luxury real estate market can take longer to sell than an average home – and, the higher the price point, the more time it could take to find the perfect buyer. But, it could also mean a substantial return.
image credit: LA Times