Will Echo Park Real Estate Prices Rise or Fall in 2012?

A steady pricing trend seems to be in Echo Park’s real estate future. Echo Park’s residential real estate market reflects both national and regional economic conditions. In an area where there is a strong job market, typically one can expect a strong real estate market. 

Per S&P/Case-Shiller Home Price Indices, the fourth quarter of 2011 saw nationwide declines in housing prices of up to 1.2 percent when comparing October to September’s sales, the latest figures available. Overall across Los Angeles, also per Case-Shiller research, residential real estate prices have declined 39.6 percent from their peak in September 2006.

Auction notices for foreclosed homes in California surged 63 percent in November over October’s figures reports the Los Angeles Times recently, although the hardest-hit cities cited were Stockton and Modesto. Both foreclosures and short sales impact housing prices; banks determine loans based on the comparable prices of area property sales.

As with their national and statewide counterparts, property values locally have been hit by these distressed sales and the overall downturn in the economy. However, Echo Park’s reputation as a gentrifying neighborhood and central location are factors that continue to attract home buyers.

Let’s Do the Numbers

Per the MLS (Multiple Listing Service), the last six months of 2011 indicates that 27 percent of residential home sales in Echo Park were categorized as distressed and composed of 8 percent short sales and 19 percent sales of bank-owned properties or foreclosures. (These trends vary slightly depending on how Echo Park’s boundaries are categorized).

In 2010, those figures were double, with 52 percent of home sales categorized as distressed; 18 percent were short sales, and 34 percent were sales of bank-owned properties.

“Echo Park was hit hard by the sub-prime mortgage fallout,” says Jamie Adner, president of the Adner Realty Group at Keller Williams Realty. Buyers who bought with little or no money down found that they could no longer afford their mortgages.  Adner believes most of that inventory has since moved through. 

Interest Rates Are Close to Historic Lows

Interest rates for 30-year loans are now below 4 percent. “For buyers, if they can take advantage and get a loan, this is the ultimate time to buy, and they should be looking now as interest rates are at 50-year lows,” contends Adner.

Because of Echo Park’s proximity to Silver Lake, one of the hottest real estate markets in Los Angeles, there continues to be a bit of “a trickle down to Echo Park,” notes Adner.  “Echo Park is an up-and-coming neighborhood within the shadow of the second largest city in U.S.; good properties go quickly,” he adds.

Here’s a longer look from the Echo Park Patch .