Los Angeles has been a company town since silent movie makers came in search of California’s golden sunlight. The entertainment business has long been the driver of a significant portion of our town’s economy—and has provided streams of qualified (usually well-paid) buyers for homes. A couple of decades ago, with titanic media company mergers shrinking employee head counts and production slates and/or budgets being downsized, “the business” wasn’t as stimulating as before to local real estate markets. But over the last decade—and specifically the last few years—the company town aspect of L.A. is, once again, booming—and is one reason housing prices locally have steadied their course through a number of mini-market shifts.
Google’s January announcement that it would take over much of the failed Westside Pavilion shopping center, proved technology is not only a NorCal economic stimulator. That announcement heated-up demand for houses in West L.A., as prospective landlords snatched-up potential “rental” homes for the giant’s incoming employees. The average single-family home sales price in West L.A. sits at $1,270,000, a 5% increase over this time last year.
Another example: Companies like Amazon and Netflix have agreed to rent entire buildings before construction has even begun on some, setting off a scramble in recent years to erect billions of dollars’ worth of new offices and production facilities to accommodate them. The explosive entertainment business growth has heightened desirability for housing in these neighborhoods; primarily Hollywood, Culver City and Playa Vista (where a median-priced condominium currently sells for $1,08,250, up 16% over last year).
Netflix is all-in on Hollywood (close to this week’s featured listing at 1924 Canyon Drive), helping transform the once-blighted ’hood. “One square-foot of Netflix (and there are hundreds of thousands) creates additional demand in the surrounding area,” says a real estate developer. “There is a massive multiplier effect” made up of demand for housing for their workers and their service providers (who want to be near the big players). Hollywood’s median price for a condo is currently up 4% over this time last year, at $740,000.
Amazon Studios has locked-in more than 600,000 square-feet (so far) in Culver City, where, on average, a condo costs $588,500. Apple Inc., which is set on creating its own content, and HBO have also agreed to move into new buildings being erected in Culver City, a historic movie-making town that has seen an economic renaissance in the last decade, enhanced by the Expo Line light rail connecting it to downtown and Santa Monica.
It seems as though California’s golden light is once again shining brightly on Los Angeles’ real estate markets.