When we think Westside real estate, it’s difficult not to conjure up the logo of Pence Hathorn Silver (PHS), accredited in 2016 as Santa Monica’s leading real estate team. In a recent feature in Digs Westside Magazine, PT Founding Partner John Hathorn and Associate Partner Charles Pence, both founders of PHS and Partners Trust’s top-producing Santa Monica office, speak extensively about the future of the Westside housing market, the significant development that’s happening there and the area’s most sought-after locale in an article titled “State of the Westside.”
Hathorn and Pence report that the Westside market is eager to buy—even if the property is still under construction. The real estate duo discusses the popularity of Mar Vista, where virtually everything under development is selling quickly, in addition to the voracity among buyers for new modern builds in Santa Monica, Brentwood and Pacific Palisades. According to the article, there are more than “$114 million worth of active listings for properties built in 2016 or later,” whereas “$196 million worth of new construction homes have closed.”
While remodeling is a massive trend in today’s market, Hathorn and Pence weigh in on the downside —one that’s laced with setbacks and expectations that aren’t always met. They share that the phenomenon of flipping and receiving top dollar is driving buyers and sellers; however, in actuality, both buyers and sellers may want to seek out move-in ready properties, as the process is far easier and more enjoyable. Once renovations are instigated, homeowners often find that infrastructures are crumbling, fireplaces are unsafe, windows are not energy efficient, and they are ultimately tasked with renovating to code. Subsequently, costs begin to soar, making a teardown and rebuild the more cost-effective alternative.
Designed to satisfy real estate agents’ developer-client needs, the value on teardown properties is immense. According to the article, “A house that was 25 years old and not updated used to be considered a fixer-upper, and now, 10 to 15-year-old homes that are perfectly livable are being viewed as lot value and priced at land value.” In the last 7 years, lot value has increased by more than 100 percent. Incredibly, as the value of the structure drops, the value of the property increases.
According to Hathorn and Pence, both wealth accumulation and interest in land value are up, and when combined with the transitory market in which young buyers are purchasing homes for now—not forever— westside real estate is transforming. The duo says, “When we first started selling, it had to be the perfect house. Today, if buyers can check enough boxes—such as the right number of rooms and the right neighborhood and proximity to things they like to do—they’ll buy the home.” Buyers are more decisive nowadays and with new builds, a new approach to home-buying and an array of options, the Westside Los Angeles real estate market is changing favorably and fast.