By Redfin agent Josh Ritnimit
Most of our San Gabriel Valley real estate markets seem to be keeping pace with the general balancing trend seen across the Southland and the nation. Home price appreciation is cooling and more inventory has returned to the market. Arcadia, however, is exceptional.
The Arcadia median home price was nearly 45% higher in July than one year ago. At the same time, there were almost 60% more homes on the market, which is a huge inventory increase by any measure. This is strange indeed, as one would expect such a dramatic rise in inventory to ease prices, at least somewhat. But in Arcadia, so far, there has been no relief.
Some of the state’s finest schools, a close proximity to Downtown L.A. and Arcadia’s idyllic suburban setting have long made it the neighborhood of choice for families who can afford it. But one factor that is less pronounced in other parts of L.A. has rendered Arcadia the real estate juggernaut of the San Gabriel Valley: foreign buyers.
In the 12-month period ending in March 2014, $92.2 billion was spent on U.S. real estate by foreign buyers, according to the National Association of Realtors. This marks a 35% increase over last year. Chinese buyers accounted for 24% of total foreign sales and made most of their purchases on high-tier, California real estate, such as is found in Arcadia.
Many of these foreign buyers are undoubtedly settling in Arcadia. From my experience, a lot of them are tearing down older properties to build custom homes. To give some perspective on the building activity happening in Arcadia, compare it to Pasadena, a city with three times Arcadia’s population. As of June 2014, there were a total of three single-family residential building permits pulled for Pasadena, according to the Census Bureau. There were 29 in Arcadia!
It’s difficult to say what influence this foreign investment in Arcadia real estate will have on the greater culture and economy of the San Gabriel Valley. But the real estate data don’t lie: Arcadia has become a powerful magnet for affluent homebuyers near and far and it’s just getting started.