You can call them hipsters or, as the U.S. Census Bureau defines them, the “creative class,” but however you prefer to acknowledge this large segment of the Los Angeles community they are beginning to put their mark on the L.A. housing market.
According to a story in Businessweek, “hipster-flipper” shops with names like Better Shelter and ModOp Design “are bringing an artful take to the renovation game” in Los Angeles. What they are doing is entering formerly run-down segments of Los Angeles and refurbishing the homes there with that hipster flair.
“There’s an inexhaustible supply of hipsters in L.A.,” said real estate developer Steve Jones. “You saw the same thing happen in Brooklyn. The hipsters pushed out until they got to the water.”
Rather than the quick and cheap flips that are pervasive in real estate, L.A.’s creative class is making serious upgrades to homes that match their aesthetic. Jones said that has changed the face of Los Angeles real estate.
“What the market had been offering in terms of renovated homes was bad laminate flooring, granite countertops—the Home Depot school of remodeling,” Jones told Businessweek. “There had to be a buyer who appreciated better design.”
The U.S. Census Bureau defines L.A.’s creative class as people who work in the fields of tech, business, media, entertainment, law and health care. They earn in average of $81,000 a year and make up 34% of the workers in Los Angeles.
What’s really got the real estate world buzzing is these buyers are paying big money for homes “with a suitcase full of money.” One real estate professional told BusinessWeek people are paying over 10% of the asking price—all cash—and with no contingencies.
In fact, almost one-third of home sales in Los Angeles were all cash during the first quarter of the year. The median price of these purchases was $351,000.