When looking at the data for the past ten years it appears that Hollywood Hills, like many affluent areas in Southern California has returned to normal or almost normal. While prices are declining slightly, the major price reductions of a few years ago seem to be over and we may be entering into a period where prices fluctuate slightly but not drastic increases or decreases that we saw a few years ago.
Home Prices In the Past 10 Years
Ten years ago the median price of a home in this area was $673,000. The average rate of appreciation nationwide was 5.6 % a year. If you apply that rate to a hypothetical home in Hollywood Hills, today, that same home should be worth about $1,100,000. Now that was the median price of a home in 2009, but prices have fallen since then and now the median price of a home in the Hollywood Hills is $977,000. This would still not be a bad return or rate of appreciation for someone who actually bought a home in 2001 and still lived in that home today, but somewhere in between, home prices shot up to about $1,340,000.
When Home Prices Shot Up
In 2002, the median price of a home in Hollywood Hills began to rise faster than normal. The median price of a home that year was $790,000, much higher than the $707,000 price that would have been expected with the average appreciation rate of 5.6%. By 2003, home prices had shot up to about $886,000. By 2004, home prices had risen to over a million dollars and they continued to rise until 2007. From there, prices have declined, just slightly in 2008 and 2009 and more steeply in 2010 and 2011.
Where We Are Today
Today, in Hollywood Hills, only 71% of homes are sold for a gain. In 2001 that figure was about 98%. However, the foreclosure rate is low and the number of homes sold has remained fairly stable over time. In November, 2001, 33 homes were sold. The most recent figures show 49 homes sold in July of this year.
Can Prices Go Lower?
Of course prices can always go lower but it seems unlikely that there will be much if any more decline in the Hollywood Hills area. This is a beautiful hilly area in Los Angeles County, close to downtown, the Griffith Park Observatory, Universal Studios, and UCLA. The architecture of many of the homes in the area is truly something to see and tourists routinely drive through the area to view the opulent homes with breathtaking views. People who buy homes in Hollywood Hills generally have median incomes almost twice the national average. They are generally, well-educated people who want and need to live where the action is but want a certain level of privacy and lifestyle.