Is It a Good Time to Invest in Studio City, CA, in 2023?

Is It a Good Time to Invest in Studio City, CA, in 2023?

It's a question on the mind of many potential Los Angeles area home buyers and investors — is now a good time to buy? Considering the prior two-plus years of Southern California real estate, one can forgive home shoppers for being skittish about what lies ahead.

The housing market was vaulted into territory never before seen, thanks to historically high levels of demand, historically low levels of supply, and all-time low interest rates. Sellers enjoyed an uninterrupted, 24-month run where they controlled practically every aspect of the market.

Of course, in a region well known for meteoric rises and equally spectacular falls, it was only a matter of time before buyers spotted a light at the end of the real estate tunnel. Just how bright that light shines depends on where you're looking to invest your real estate dollars.

For those with an eye toward a Studio City property, the light is certainly flickering, but you may have to squint to see it. But for those playing the long game, that's not necessarily bad.

A popular market

Studio City real estate has long been a favorite landing spot for homeowners. As one of the most centrally located communities anywhere in the Los Angeles Metro, this gem of a neighborhood occupies some highly desirable real estate.

Situated in the southeastern portion of the San Fernando Valley, the region's major destinations are all within a 45-minute drive of Studio City. That includes Downtown Los Angeles, LAX, Malibu, Santa Monica, Pasadena, and even Santa Clarita.

While its primary notoriety stems from being the home of its namesake studio—the CBS Studio Center—the 6.5 square mile community offers residents one of the most eclectic and seemingly egalitarian lifestyles anywhere in the Los Angeles or Orange counties. Studio City is one of the rare burgs in a constantly starstruck town where the famous, almost famous, and not-so-famous rub elbows as genuine neighbors.

This intermingling of status is prevalent in the housing landscape as well. When not sipping coffee or picking up high-end necessities along the celebrated Ventura Boulevard, the Hollywood elite take refuge in places like Fryman Canyon Estates.

Not too far away, just off Laurel Canyon Boulevard, Silver Triangle deals in more modest, affordable luxury. Here, you'll find one of the Valley's broadest selection of homes, from empty lots and tear-downs to remodeled cottages and opulent, gated mansions. Plus, the majority of the neighborhood is within walking distance of one of the area's best public schools and a number of wonderful shops and restaurants along Ventura Blvd.

Real estate in transition

It's hard to fathom that 12 months ago, we were aboard a non-stop freight train of luxury purchases. The scarcity of inventory, especially in Studio City's upscale market, coupled with shockingly inexpensive borrowing, gave rise to an immovable seller's market — or so we thought.

Similar to forecasts for both the Los Angeles Metro market and California as a whole, expect to see home sales drop over the year's first quarter. It could be a dramatic shift, depending on the interest rates and inventory of homes available.

With the calendar shifting to 2023, mortgage rates for a 30-year fixed-rate mortgage are hovering around 6 percent. That's down from the 6.95 percent from November, representing a nearly 20-year high. A year ago, the 30-year fixed rate was 3.05 percent. The year before that, in December 2020, it was 2.66 percent.

Times have indeed changed.

However, with fewer sales comes an increase in available homes — the flicker of light for buyers. Active listings are up nearly 100 percent year over year across the state, and there's been a notable increase in the number of homes currently listed in Studio City.

The boost in inventory has provided buyers with far more choices than in past months. While the trade-off of lessened buying power is not ideal, there's something to be said for the opportunity to engage with many of Studio City's most notable home styles. The marketplace is seeing everything from Spanish and ranch-style homes to mid-century moderns and custom estates.

The condo market also shows signs of life, with new offerings popping up and staying on the market longer than in previous months. And the rarest of listings this decade — new development — is slowly making a comeback. Presently, there are a handful of 2022 builds available. Although it's not enough to make a dent in the tight supply, it signifies that some normalcy is returning to the market.

Given its widespread appeal, Studio City remains a seller's market heading into 2023. That said, the advantage sellers once maintained is shrinking as more balance returns to the marketplace. Buyers and investors will have opportunities to acquire Studio City luxury real estate.

Opportunity exists

Throughout 2023, the major stumbling block early on for homebuyers will be inflated interest rates and high home prices. The Fed has already stated that more interest rate increases are on the way through the first few months of the new year. After that, its a lot of unknowns.

In addition, home prices will remain elevated for at least the first quarter of the year. However, the bright spot in the above scenario, which will initially squeeze buyers, is that it becomes more difficult for sellers to generate the ROI they became accustomed to over the past three years. As such, home prices may finally come back down as we head further into the year. Rarely do they decrease as quickly as they increase, but any drop is a welcome relief. Overall, California could see a decrease in single-family home sales of over 7 percent, year over year. Median home prices could drop by almost 9 percent should forecasts play out as expected.

As in any market, regardless of who it favors, the right time to invest remains a highly personal decision. Your specific timetable of when you need (or want) to purchase and your willingness to accept certain risks are the primary factors in determining the right time to buy.

Even with the current wave of uncertainty, opportunity exists throughout the San Fernando Valley luxury housing market.

Studio City real estate remains an incredibly attractive investment. It could prove a boon for anyone seeking one of the best communities with the San Fernando Valley and L.A. County as a whole.

The luxury market, in particular, is a bastion for savvy, resourceful buyers. Those with patience and persistence will see the best results in finding the perfect home at the ideal price. And, more often than not, even in times of instability, Studio City is an ideal long-range investment, considering its features:

  • Unique, small-town vibes with tree-lined streets and vast open spaces set amongst one of the most vibrant urban regions on earth
  • Proximity to the world-class amenities of Los Angeles, Beverly Hills, and, of course, Hollywood on the other side of the Santa Monica Mountains and the Hollywood Hills
  • Its own bright, shining Hollywood lights as the home of Universal Studios and CBS Studio City 
  • Unmatched Ventura Boulevard shopping, dining, and entertainment in one of Los Angeles County's most underrated social scenes
  • An abundance of outdoor pursuits highlighted by more than 25 miles of trails, wooded hikes, and gorgeous views of the San Fernando Valley
  • Outstanding educational opportunities for young residents, both public and private, including the highly regarded Campbell Hall and Harvard-Westlake Upper School
A balancing market opens the door to greater supply and stabilizing prices, both of which have been lacking over the past three years.

Cash buyers can make the biggest splash here, though financing still shouldn’t be overlooked. Historically speaking, interest rates remain relatively low. As a deep-pocketed, financially sound investor, there's also the possibility to tap into desirable rates that would prove rewarding to a long-term investment strategy.

Ready to get started?

Ready to test the market, seek out homes for sale in Studio City and find the perfect house or investment property? Or perhaps you're interested in another of Los Angeles County's celebrated communities, such as Century City, Los Feliz, or Echo Park. Regardless of where you find yourself in your current real estate journey — buying, investing, or selling — we can support your efforts. Contact the Iconic Homes team today for guidance in navigating one of life's most essential and valuable transactions. Our experience and expertise in the luxury sector prove invaluable in ensuring you get the most from your multi-million dollar Los Angeles real estate transaction.

*Header photo 12401 Viewcrest Road sold by Iconic Homes LA