Sherman Oaks Real Estate Faring Better Than National Market

Despite all of the unique factors that have impacted residential real estate over the past several years, the truism that all real estate is local still applies.

Fortunately for Sherman Oaks residents, this truism, and the key factors in gauging home values weigh in the community’s favor.

Sherman Oaks has good school districts, a shortage of land for new home development, and high-paying jobs in the entertainment and pharmaceutical industries – two job sectors that maintained momentum through the recession, said Matt Epstein, a real estate broker with Prudential California Realty.

Even with all these things going for the local housing market, it has not been unaffected by short sales and foreclosures, which are not expected to burn off for another two years.

So, where does that put us?

In good shape, compared to what national economic indicators, like Standard & Poor’s Case-Shiller Home Price Index, which provide averages on the health of housing markets across the country, are indicating.

“Unfortunately, these reports, all these indexes they paint with one brush,” Epstein said. “The market is dependent on what is happening in the local marketplace. Sherman Oaks is different than Sun Valley, Thousand Oaks or Calabasas.”

A significant difference between Sherman Oaks and some surrounding markets is that “you can’t remanufacture land,” Epstein said. “Most of the homes were built here before the housing boom, because we are in a high demand neighborhood. In Calabasas, the area had not been built out, so they constructed a lot of tract homes and the area got overbuilt.”

While Case-Shiller reported a 0.8 percent drop in housing prices nationally, and compared today’s housing market to that of 2002, Economist Christopher Thornberg said in Los Angeles, a more apt comparison would be 2009.

 “We are in equilibrium right now, which is not a bad thing,” Thornberg said.

 Homeowners are still reeling from the shock of being in the hyper-inflated market that existed from 2003 to 2006, but what goes up, must come down.

From the boom to the bust, the housing market fell off by 80 percent, Thornberg said. The drop in values expected by Thornberg over the next few years—a 20 percent drop—is minor in comparison.

Two years to a real recovery in the housing market appears to be the standard logic among local real estate experts.

As when compared to the rest of the nation, Sherman Oaks also fares better when compared to other California markets.

Housing values in Sherman Oaks only dropped from 10 to 22 percent from boom to bust, said Josephine Rossi, a real estate agent with Prudential California Realty.

“If you are anywhere within Encino, Sherman Oaks or Studio City – compared to the rest of the nation, we are in pretty good shape,” Rossi said.