Echo Park is the only neighborhood on the eastside of L.A. where homes are now selling for less than they did a year ago, according to a review by the Boulevard Sentinel of 10 eastside neighborhoods tracked by Redfin.com
From March through May 2018, monthly home prices in Echo Park have declined year-over-year, with the largest dip, 4.6%, occurring in May (the latest data available).
What gives? Are Echo Park’s falling prices a sign of what’s to come in NELA neighborhoods?
The answer is ‘probably not.’ NELA continues to show solid, if not astronomical, growth. Eagle Rock, El Sereno, Glassell Park and Highland Park all had year-over-year price growth in the low double-digits. Atwater Village and Silver Lake were also solid. Los Feliz was on a tear, up 35% compared to last year, with a median sale price of $1.7 million.
Glenn Shelhamer, a real estate agent with the Shelhamer Real Estate Group and writer of the Silverlakeblog.com, doesn’t see the upward trajectory of NELA prices changing anytime soon. “We have a serious inventory shortage and everything is still very competitive,” he said, citing by way of example the $1,350 price-per-square foot record set in June in Mount Washington.
But what then explains the price drops in Echo Park?
For one thing, most of the home price appreciation in Echo Park in recent years has been in locations bordering Silver Lake. As those homes have been snatched up, the inventory in the older, more central pockets of the neighborhood has proven to be a harder sell.
“Buyers are incredibly picky when spending this kind of money,” said Rob Kallick, broker/owner of local real estate firm, Take Sunset. They want what he calls “quality inventory,” or polished, turnkey homes that are not near the 101 freeway, on top of Dodger Stadium or on San Francisco-grade hills – three characteristics of Echo Park real estate that are hard to escape.
Baxter St. in Echo Park is a prime example of undesirable housing stock at the core of an otherwise hot market. Baxter is one of the steepest hills in the city (now one-way to reduce the number of crashes). Baxter is also jammed with homes on small lots. The combination of the steep grade and the small lots makes home renovations very expensive, which has kept flippers and other potential buyers at bay.
Another factor that keeps the lid on real estate prices in Echo Park is that there are many two-to-four unit rental buildings subject to rent control. Tenants in those apartments tend to stay put, which deters the redevelopment of the property into higher end houses-for-sale. Echo Park has one of the highest renter populations in the county, at 76%, according to the L.A. Times Mapping L.A. project.
For reasons that are unique to Echo Park, the neighborhood is experiencing a downturn in home prices. But other eastside neighborhoods, largely unaffected by Echo Park’s challenges, are still testing new highs.