Why Does Location Matter for Home Buying in Los Angeles?
Northeast LA (NELA) already is popular for several reasons. But when narrowing down to a specific neighborhood it helps to know what to look for.
Just a few years ago (in 2014), Northeast Los Angeles (NELA) initiated the city’s first bike friendly business district, or BFBD in the neighborhood of Eagle Rock.
The BFBD designation promotes better bike infrastructure on streets (corrals, signage, repair stations) that include Colorado, Eagle Rock and York boulevards and Figueroa Street. Businesses along those corridors hope to benefit as much as retailers in Long Beach and other cities have seen when bikers prove to be consumers.
This is a situation where location – as in the real estate mantra “location location location” – affects real estate values. A bike-friendly environment is a plus with younger buyers who gravitate toward non-motor vehicle transportation for at least a portion of their lifestyle. Northeast LA cities such as Highland Park and others clustered around the Lincoln/Cypress, Heritage Square and Southwest Museum stops on the Metro Gold Line have the advantage of being able to commute to downtown and Pasadena without turning an ignition key.
Aside from transportation questions, there are several other location questions a homebuyer in NELA should consider:
Worst home in the best neighborhood? Historically, your best chance for buying a home that will increase in value is to find the sad little fixer-upper in the pricier zip code (e.g., Mt. Washington). That is still true IF you’re a fixer-upper kind of person. Doing the opposite, to buy the awesome house in a dicey area, might leave you with buyer’s remorse and few buyers when it comes time to sell. But if you want a move-in ready home that stacks up well with the neighbors, expect to pay full price for the privilege.
Businesses within walking distance? Younger buyers are also expressing an interest in a walkable neighborhood, some consulting Walkscore.com to compare different homes and neighborhoods. Some studies show that proximity to Starbucks, Target and Whole Foods is associated with higher value increases over the past two decades. But perhaps what matters most is individual: If you are a bowler, you might love the exercise of a ten-minute walk to a bowling alley. Also, there is research that challenges the notion that proximity to strip clubs and marijuana dispensaries hurts a home’s value (early research in Colorado in particular suggests just the opposite).
Buy low while the neighborhood is on the rise? This mirrors the “buy low sell high” axiom of investing. And there is a lot of truth to it: when a large number of homes are being renovated in a mature neighborhood, it generally speaks to positive price increases. The trick is to get in at the earlier stages of such trends. But there are some things to look for which provide hints: is the neighborhood adjacent to other areas that are hot today? Is the existing housing stock “historic,” meaning 50+ years old and in its original design? Midcentury modern without a 1990s renovation would work, as would a 1910 Victorian with the original gingerbread trim. A collection of independent restaurants, art galleries and hipster coffee shops also are precursors to neighborhood gentrification (hot tip: check out Hermon, Garvanza and Glassell Park).
Concerns about environmental issues? California laws require disclosure of lead and known toxins in the soils. But if a gas station or dry cleaner was in the vicinity in decades past, you might hire an environmental investigation firm to study a specific property.
School districts – and property taxes? Good school districts almost always translate into higher property values. But with them tend to come higher property taxes. Empty nesters might look outside the box if the quality of schools doesn’t affect them personally – but a Starbucks down the street does.
Location does matter – but there are many factors that define what a location actually has.