Turbulent economic conditions invariably lead investors to buy real estate. For a good reason, too, real estate is an effective, long-term investment that can endure a weakening economy.
Now more than ever, investing in real estate is one of the best financial decisions you can make.
Christina is your financial compass guiding your real estate investing journey. Let’s look at a specific example of the real estate market you want to include in your portfolio: the Holmby Hills neighborhood in Los Angeles.
Where Are The Holmby Hills?
This neighborhood is at the center of the Westside region in Los Angeles, a hyper-prime market south of the Santa Monica Mountains and just off the Pacific coast.
Holmby Hills has some renowned neighbors located within the Westwood Community Plan Area. Bel Air, Beverly Hills, and Holmby Hills make up the Platinum Triangle, a name coined because of the Hollywood star power that makes their homes here.
The surrounding area includes other high-value neighborhoods: Brentwood and Comstock, to name a few.
On the smaller side, its southern borders follow along the iconic Los AngelesCountry Club. To the west, it follows Beverly Glen Blvd to N Beverly Glen Blvd, then into Glendale Dr along its northern edge. Eastward boundaries stop around Angelo Dr and Brooklawn Dr.
Holmby Hills Is A High-Value Real Estate Market
There aren’t many neighborhoods like Holmby Hills.
Even in Los Angeles, it’s considered a tight-knit, exclusive community. It’s a hyper niche market within the larger Westside region; small and highly exclusive. As a result, its appeal to accredited investors is high—the exclusive demand makes real estate here all the more valuable.
Population Demographics of Holmby Hills
The most recently taken census of Holmby Hills indicates that around 750 people live there. Holmby Hills is vastly smaller than its neighbors. Neighboring Beverly Hills has a population of around 33,000; Bel Air has about 10,000.
The median age of residents in Holmby Hills is 60. 43% are male, and 57% are female.
Most households are lived in by couples—almost half at 48%. Families with children make up about 16% of the residents in the neighborhood. The average size of a Holmby Hills household is 2.07.
Income Stats of Holmby Hills
This micro-community sits between two of the most exclusive neighborhoods in all of Los Angeles county. As a result, Holmby Hills draws in a significant deal of capital.
Holmby Hills has an impressive median household income of about $142,000. Most of the workforce in the area are considered white-collar workers.
Education Stats of Holmby Hills
The residents of Holmby Hills are some of the best-educated in the city.
The vast majority of people living in this neighborhood have received higher education. 30% of people have a four-year bachelor’s degree, while 40% have a graduate degree. Some smart folks have chosen to make Holmby Hills their home.
The Holmby HillsReal Estate Market
Holmby Hills has every property type you can imagine. Investors have a lot to choose from, from single-family homes to condominiums to multi-room mansions amidst Holmby Hills’ high-value assets.
The exclusivity of these markets can be seen immediately in the median listing prices for homes here: almost 2.2 million dollars.
The home price/sq ft is almost 1,000 dollars—every inch of Holmby Hills is high value.
The majority of Holmby Hills residents own their home, 70%. The rest are rental properties.
Market Trends in Holmby Hills
The median listing price for homes in Holmby Hills is trending down. As of May 2022, the year-over-year change in median listing prices was -63.7%.
However, it must be considered how small the market is and the extreme range in home values here. Currently, the range for homes listed is about 1 million to 165 million.
There are currently 12 homes for sale and nine new listings for rent in Holmby Hills. Competition for real estate in Holmby Hills is currently low. Homes are sold at about 14% lower than the asking price.
Nevertheless, real estate goes fairly quickly in Holmby Hills. This past month, homes were calculated to be on the market for 113 days. The previous month’s calculations determined that housing could be expected to sit on the market for about 82 days.
Over a year, the expected length of real estate to stay on the market is about 51 days.
Now Is An Ideal Time To Invest In Holmby Hills
Property is staying on the market for long. Competition for these properties appears to be getting lower.
Together, these trends indicate a good time to invest in Holmby Hillsreal estate. Buyers have the advantage as selling prices appear to be dropping below the asking price.
Why Invest in Holmby HillsReal Estate?
The high price tag of these properties may give investors pause.
But including Holmby Hills, real estate in your investment portfolio could be one of the best actions you can take for your financial health.
High-value real estate assets help you in a variety of ways. Here are three of the most important ones:
- Real estates hedges against inflation
- Income earning real estate generates high cash flow
- Property has a high appreciation rate
Why Is Holmby HillsReal Estate an Inflation Hedge?
Rising inflation has a destructive effect on your savings.
Inflation describes the weakening of the dollar’s purchasing power. This is seen most clearly as a general price rise across economic sectors.
This rise in prices is damaging enough to your financial health as is. But the real damage inflicted by inflation is on your savings; as the dollar weakens your money, your savings account withers effectively away.
When interest is outpaced by inflation, your retirement funds are in serious trouble.
Real estate investment opportunities use the rising prices of inflation to your advantage, allowing you to not only endure these turbulent economic moments but thrive in them.
How Do Holmby HillsReal Estate Investments Fight Inflation?
The rising prices seen during inflation give income-earning real estate assets the potential to continue generating profit.
Inflation results in higher prices across almost every economic sector, including rent. Property owners generally raise the rental payments on their assets as inflation rises. Landlords face rising prices in ownership expenses that warrant a corresponding rise in rent.
Because rental properties move dynamically with the forces of inflation, they give their investors a financial asset that can withstand the weakening power of the dollar.
Protect Your Finances Against Inflation With Holmby HillsReal Estate
Holmby Hillsreal estate has a unique opportunity during this inflationary period. The listing prices of homes sold in this high-performing neighborhood are lower than normal. This means that investors have an advantage over property buyers.
Our strategy at Christina is based on finding the most optimal moments to buy into the high-value property in the most niche, exclusive neighborhoods in Los Angeles, California. Now may be the best time to get into Holmby Hills we’ve seen for a while.
Why Does Holmby HillsReal Estate Have A High Cash Flow?
Cash flow helps investors keep steady access to capital. There’s gross cash flow, which refers to the total financial transactions that go into and come out of a financial asset. Net cash flow describes the total balance of those financial assets.
Income-earning properties are almost guaranteed to have a high net cash flow.
When rental agreements are written, the rental income earned from the property necessarily must exceed the expenses going into the property. Otherwise, the property would lose the property owner’s money.
With few exceptions, income-earning real estate assets will reliably produce a high net cash flow from their properties due to the nature of their rental agreements.
Why High Cash Flow Gives You A Financial Advantage
The reliability of a high cash flow from real estate means that investors gain access to a steady income stream.
Furthermore, that monthly cash allows investors to use that money more immediately. Whereas returns from stocks and bonds can be large, they don’t provide investors the same steady stream of income that high cash flow assets do.
Real estate can pay out faster than other asset classes, equipping investors with the capital to make more financial decisions.
Holmby Hills Net Investors A High Cash Flow
Rent varies across the few properties being leased in Holmby Hills. Even the lower range of rental properties can net investors a rental income in the tens of thousands of dollars.
The month-to-month cash flow from rental properties, even for a short period like AirBnB rentals, can make Holmby Hills rental income some of the most lucrative in the city.
How Does Real Estate Appreciation Help You?
Appreciation describes a financial asset’s increase in value over time. High appreciation is an attractive feature of a financial asset—it assures the investor that its value will likely increase over time.
Real estate is one of the best asset classes available to investors who want a high investment appreciation rate.
Since the 1960s, the property has increased steadily yearly, with almost no exceptions. Even when property values dip, they invariably bounce back stronger than before. The sales price of homes trended downwards for a year after the 2008 financial crisis.
Since then, they’re the sales price of homes has doubled.
Why Does Holmby HillsReal Estate Appreciate So Well?
An annual baseline inflation rate of about 2% is healthy for the economy. Long-term assets like real estate benefit from this incremental increase in value as sales prices tend to rise with inflation, helping them consistently appreciate.
Furthermore, real estate is likely to appreciate due to its inherent scarcity as an asset. Land cannot be created; its limited supply means that the more land development, the more scarce it becomes.
The increased scarcity translates to a necessarily higher demand for property. If more land is being developed to meet demand, the shrinking supply will drive up property values due to the law of supply and demand.
Want to learn more about real estate market fundamentals? Consult our educational material.
Holmby HillsReal Estate Has High Potential For Appreciation
Development is almost non-existent in Holmby Hills. The supply of housing units in this already exclusive neighborhood is more likely to decrease as more properties are acquired by investors.
Holmby Hills is a perfect example of how scarcity drives value. As one of the most exclusive, niche neighborhoods in Los Angeles, the shrinking supply of property here means it’s virtually guaranteed to appreciate.
Break Into This Exclusive With Real Estate Professionals
Over our four decades of real estate experience in California, our team at Christina has learned how to navigate L.A.’s most niche neighborhoods. We’re here to help you access one of the city’s most exclusive real estate markets. Let’s get started.
Sources:
Holmby Hills Neighborhood Guide | ZeroDown
Holmby Hills, Los Angeles, CA Real Estate Market | Renter.com
Average Sales Price of Homes Sold For the United States | Economic Research