Everyone knows that real estate is expensive in Los Angeles. And everyone knows how hard it is to get a home loan these days. So you would think that real estate agents are sitting glumly at their desks waiting for phones to ring, drumming their fingers, watching their bank accounts dwindle.
Not in South Los Angeles, where property is selling in some areas. Leimert Park-based real estate agent Heather Presha (pronounced Pre-shay) said that homes on the market in her neighborhood and neighboring areas of Baldwin Hills/Crenshaw, View Park, Baldwin Village, Hyde Park, and Jefferson Park are getting 40 to 50 offers each. Open houses are filled to capacity with prospective buyers. “It’s so competitive now, I haven’t made an offer on a home in six months that hasn’t had multiple offers,” said Presha.
Reasons to buy in South LA
Real estate agent Natalie Neith, who specializes in historic homes in South L.A., echoed Presha’s take. She said there are three main reason buyers are looking at South L.A. Firstly, these neighborhoods have preserved a lot of older architecture. Some of them need fixing up – Neith just sold an historic fixer-upper to a former writer/producer for the TV show “House” – but many are move-in-ready.
|Population by ethnicity, 2010 Census (Source: Mapping LA, LA Times|
Secondly, these neighborhoods are located in the center of Los Angeles. The 110, 10, 405, and 105 freeways are roughly the eastern, northern, western, and southern boundaries, respectively, of South L.A. Almost 1 million people use just the 10 and 405 freeways daily. That central location starts to make a lot of sense if you’ve endured the clogged east-west and north-south commutes in L.A.
And finally, there is price. Buyers who are finding themselves priced out of suburban neighborhoods in the San Fernando Valley and other desirable areas of L.A. are finding they can get a lot of house for the same amount of money in parts of South L.A. Or the same house for a lot cheaper. For instance, a home that would sell in Silverlake for around $750,000 might go for $337,000 in Leimert Park, according to Presha.
Prices are beginning to inch back up after the low prices of the last several years. For example, as listed on the real-estate website Trulia, a small post-war courtyard bungalow in Village Green, an historic neighborhood in Baldwin Hills, sold for almost $400,000 at the height of the market in the late 1990s. The list-price had fallen to $185,000 in April of this year. The same bungalow sold for $195,000 this May.
Getting a loan
With interest rates at historically low levels of 3% or less, it’s a good time to buy if you can get a loan. Neith said if you’re buying an historic property – one that is in an Historic Preservation Overlay Zone, or HPOZ, or one that is outside an HPOZ but designated historic – then you may qualify for significant property-tax reduction under the Mills Act. The Mills Act allows tax reduction of 50 percent to 75 percent for ten years after purchase. Owners can apply for renewal after the ten-year window. However, all money saved under the act must be used for historical restoration. The West Adams area alone has at least six HPOZs.
But even with good interest rates, Presha warned, it’s still a seller’s market. Buyers need to be prepared to provide a deposit of at least 3% of the final price, and sellers aren’t likely to cover fees or closing costs. But Presha also cautioned against being too pessimistic about one’s hopes of getting a home loan. She said prospective buyers, many of whom are single women and young professionals, who have enough money to put down for deposit often significantly underrate their chances of being approved for a loan.
Are these neighborhoods safe?
Conventional wisdom says that neighborhoods in South L.A. are unsafe. And there’s no doubt that these areas suffer their share of crime. LAPD Southwest Station Senior Lead Officer and community liaison Sunny Sasajima says it depends on how you look at the numbers. (Southwest Station patrols the neighborhoods of Adams-Normandie, Baldwin Hills, Baldwin Village, Baldwin Vista, Crenshaw, Exposition Park, Jefferson Park, Leimert Park, Union Square, University Park, Village Green, and West Adams.)
According to the L.A. Times’ “Mapping L.A.” project, over the week from July 4 – 10, 2012, Leimert Park – Officer Sasajima’s beat – saw eighteen crimes: sixteen property crimes (including burglary) and two violent crimes (robbery and aggravated assault). Leimert Park had a population of approximately 12,000 as of 2008 (the figures used by “Mapping L.A.”). According to “Mapping L.A,.” that gives a ratio of 14.6 crimes per 10,000 people. Leimert Park “averaged 3.5 violent crimes and 16.5 property crimes per week” over the last three months.
But compare that to Koreatown, an area that has a slightly safer reputation. Situated just a few miles to the northeast of Leimert Park, Koreatown is much more densely populated, with a 2008 population of approximately 100,000. During the same week, Koreatown’s crime ratio was much lower: 2.9 crimes per 10,000 people. But there were thirty-six actual crimes that week: twenty-eight property crimes and eight violent crimes (robberies, aggravated assaults, and rape). According to “Mapping L.A.,” Koreatown “averaged 10.5 violent crimes and 36.8 property crimes per week” over the last three months. Regardless of ratio to population, that’s a lot of crime in one week.
When asked about the issue of crime, Neith said, “It doesn’t make sense for me to sell unsafe neighborhoods.” Her business depends on word-of mouth referrals and repeat customers, both buyers and sellers. And that goes for Presha, too.
Both Neith and Presha stressed the importance of block-councils and neighborhood cooperation to the sense of community that prevails in West Adams and Leimert Park, their respective home neighborhoods. “[West Adams] is like a small town in a big city,” Neith said.
On the upswing
Recent improvements in South L.A. have made it a much more attractive prospect for homebuyers. The recently-contructed light rail Expo Line, which follows an old rail-line cut, is part of what Neith said is an overall feeling of good things happening in the neighborhoods along it. Even those who don’t use it think it’s “part and parcel of progressive improvement in Los Angeles.”
The second phase of the Expo Line will extend it out to the Veterans’ Administration Hospital on the Westside. As well, a line is planned to run north-south from Exposition and Crenshaw to the Green Line station at Aviation/LAX. The Crenshaw Line is not expected to open until late 2018, but Sasajima says he’s already hearing a lot of interest in the community about the project.
An unexpected and early side-effect is that Sasajima is losing leverage to get commercial property owners to make crime-fighting improvements to their properties, such as installing more lighting and cutting back trees. “Property owners are sitting on their hands, waiting for Metro to buy them out and begin construction,” he said.
One business that thinks South L.A. is a good investment is the top-rated restaurant Post and Beam, which opened near the Baldwin Hills Crenshaw Plaza mall in 2011. With a star chef who also happens to be a local boy made good—Chef Govind Armstrong grew up in Inglewood—Post and Beam serves a locally-sourced menu driven by ingredients, many of which are raised in the restaurant’s own organic garden. It would be perfectly at home in the moneyed environs of the Westside. Yet it’s filled to capacity weekly by Baldwin Hills locals hungry for quality food and quality places nearby to spend their money in. Real estate agent Presha said, “It’s what we deserved.”
The long-awaited Marlton Square project, which has been in planning stages for almost thirty years, is also finally underway. Demolition of the ramshackle buildings which had been on the site for decades has been completed. In June, Kaiser Permanente announced that it would be the anchor tenant of the project, bringing in much-needed medical services and economic stimulus to the area. The project will also include entertainment and retail businesses.
Other improvements in the Leimert Park-Baldwin Hills/Crenshaw-West Adams areas include the arrival of grocery chain Fresh & Easy at Crenshaw and 52nd Street and major renovations at the Baldwin Hills Crenshaw Plaza shopping mall.
There’s a sense of gathering momentum in these parts of South L.A. Will they bring gentrification? Some worry about being priced out, but real estate agent Presha said, “Everybody wants the basics of a good life”— more and better shops, more accessibility, more options.
Leimert Park, West Adams, Baldwin Hills/Crenshaw. Don’t believe the negative hype. Things are happening, and these neighborhoods are ready. Home buyers are taking note.