The market for luxury Pacific Palisades homes for sale is hot right now, and many people are looking to secure the most sought-after properties in the area. However, there are a few things you should know as you get ready to make your purchase. Owning luxury property has plenty of benefits, but it’s also not for everyone. This article will help you determine whether or not this is the right step for you.
1. Not all expensive homes are luxury homes
Depending on who you ask, you’ll get several definitions for luxury homes. Some agents consider luxury homes priced in the top 5-10% of the market. However, there’s more to a luxury home than simply a higher price. Luxury homes are known for their unique amenities, their prime location, and their superior materials. It’s not uncommon for luxury homes to have features you won’t see in other homes, such as home theaters, designated workout rooms, and spacious outdoor gathering places with pools and built-in kitchens. A luxury home must offer proximity to top area attractions and the best dining and shopping options. Finally, while most home constructions will simply use whatever materials are cheapest or easily accessible, luxury homes go above and beyond to use the best materials around. These materials are known for their aesthetic appeal and for their long-term durability.
2. You’ll spend more to own the home
Because of the higher price tag, luxury homes often require jumbo loans in order to purchase. Before a lender can issue a jumbo loan, they will need to perform a more extensive background check. You may have to make a larger down payment and likely need a higher credit score. If you’re purchasing luxury real estate as a second home or investment property, there may be tighter restrictions or requirements as well. If you’re considering shopping for luxury Santa Monica real estate, you should speak with a lender as soon as possible. This will give you a better idea of what you’ll have to do to get pre-approved for a loan before you can begin looking at properties.
In addition to paying a higher price to purchase the home, you’ll need to set aside more money to care for the home. Luxury homes generally cost more to own because of higher property taxes and insurance. In addition, if you don’t plan to live in the home full-time, you may want to outsource some duties to others. Maybe you pay for a professional lawn care service or hire a property manager to assist with upkeep and repairs while you're away. Depending on the neighborhood you purchase a home in, there may be large HOA fees that you need to pay. Many luxury home buyers are some of the most qualified buyers on the market, so higher fees won’t be a major deterrent, but it’s still something to be aware of.
In addition to paying a higher price to purchase the home, you’ll need to set aside more money to care for the home. Luxury homes generally cost more to own because of higher property taxes and insurance. In addition, if you don’t plan to live in the home full-time, you may want to outsource some duties to others. Maybe you pay for a professional lawn care service or hire a property manager to assist with upkeep and repairs while you're away. Depending on the neighborhood you purchase a home in, there may be large HOA fees that you need to pay. Many luxury home buyers are some of the most qualified buyers on the market, so higher fees won’t be a major deterrent, but it’s still something to be aware of.
3. They are less susceptible to market variances
Like many cities in California, housing prices in Pacific Palisades have seen peaks and valleys over the past year. During the summer, home prices were as high as they’ve been in the past several years. Recently, prices have begun to fall, and most real estate experts predict that 2023 will bring about a slowdown. That said, nobody expects things to be as dire as they were in 2008. Furthermore, homes in the Pacific Palisades area regularly command prices above asking, and many homes receive multiple offers. This means that you should be ready to make a competitive offer when you find a home you like. Lastly, these market trends reflect what’s currently happening with all home transactions. Luxury homes are often less susceptible to changes in the market, especially in an area like Southern California. Because of the proximity to one of the largest cities in the world, Los Angeles, as well as the pleasant climate and convenient beach access, people will always want to live in the area, and qualified buyers will continue to emerge regardless of what the economy is doing.
Work with a qualified real estate agent
Claire O’Connor is one of the most trusted real estate agents in the entire Los Angeles area. Her clients rave about her expert negotiating skills, which she uses to serve her clients in each transaction and help them secure the best deals. Claire loves the Los Angeles area, and she has helped countless others like you shop for luxury Santa Monica real estate. When you decide it’s time to begin seriously shopping for homes, or if you have a property to sell, give Claire a call.
