By FRAN FLANAGAN and LIZ JONES
The big story in real estate in Pacific Palisades in 2022 is the strength of the highest end in the market—a strong indicator of what lies ahead. With 13 sales over $20 million in the Palisades and 36 sales over $10 million—representing 22% of all sales transacted—the Palisades has solidly earned its place as a “go-to” luxury neighborhood on the Westside.
The number of sales actually dropped slightly from 2021, even though the average price per square foot and average price rose dramatically. Most of that can be attributed to fewer houses on the market, or what is called “lack of inventory,” and subsequent high demand/low supply.
A measure called ULA passed in November, which will impose a city tax of 4% on the sales of properties over $5 million and 5.5% on properties that sell for over $10 million. This could be the most significant development we have ever seen impacting our clients. The law will go into effect April 1.
In the Palisades, never has the demand been so high, the capability of buyers so strong and the inventory so low that prices in the Palisades actually rose in 2022. Despite higher interest rates and gloomy news from other markets, the local data provided in closed sales 2022 speaks for itself: In the face of instability and volatility, owning luxury real estate has become a smart, stable investment.
In the last 10 years, the Palisades has become decidedly upscale, due in large part to Palisades Village (with tenants like Bottega Veneta and the forthcoming Saint Laurent), construction of major large new homes and younger, more affluent buyers moving in.
So here’s the mix: Outside forces, such as ULA, increasing costs, upscaling of the Palisades, fewer homes on the market, there’s bound to be some adjustments. Experienced agents know how to navigate a complex market. Properties that are priced well will continue to sell. Buyers are waiting.
Submitted by Fran Flanagan and Liz Jones, Luxury Estate Directors with COMPASS. For more information, visit flanaganjones.com.
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