By Katy McLaughlin
The property Jordan Mazer bought in December is the classic
Venice beach house in more ways than one.
The $2.225 million clapboard house is close enough to a local
surf break that Mr. Mazer, a 33-year-old human-resources executive
for a videogame company, can run to it with his surfboard tucked
under his arm. Another thing that makes his property emblematic of
the neighborhood: He paid $213,000 less than the buyer in 2018, and
$450,000 less than the buyer in 2016. The home, for which he paid
over $1,000 a square foot, is near the beach but also near the
Venice boardwalk, where scores of homeless people are now
The property market in Venice, once a working-class community
that experienced an extraordinary run-up in prices from 2012
through 2019, is taking a pause. From 2012 to 2019, prices grew by
an average of about 17% a year in Venice, vastly outpacing price
growth in the rest of Los Angeles, according to an analysis by
real-estate website Zillow. Those trends reversed in July, when
price growth across Los Angeles began to outpace price growth in
Venice. Throughout the pandemic, while area home prices rose in
neighborhoods such as Brentwood, Pacific Palisades and the beaches
of Malibu, homes over $3 million in Venice have been a tougher
sell, local agents say.
Price paid per-square-foot for a single-family home in Venice
dropped by 5.7% in 2020, compared with the year prior, according to
the Jonathan Miller, president of appraisal company Miller Samuel
and the author of the Elliman report, a market study. By contrast,
per-square-foot prices for single-family homes in upscale parts of
the Greater Los Angeles area showed an increase of 3.2%, he
Inventory has also grown in Venice. There were 43.2% more
single-family homes on the market in 2020 than there were the year
prior, according to the report. Some agents blame the shift on
pandemic buyers looking for larger homes outside of Venice.
Juliette Hohnen, an agent with Douglas Elliman, said that Venice's
draw has long been its urban-style living, cool stores and
restaurants, all hard hit by the pandemic. That has prodded some
residents to abscond to the suburban ambience of Santa Monica,
Pacific Palisades, and Topanga Canyon, she said.
But a number of local real-estate agents cited another reason
for the Venice market's troubles: the city's growing homeless
"I'm sure a lot of it is the homeless situation, but it is
probably also the overpriced listing situation," said CJ Cole, an
agent with The Agency who has specialized in Venice for over 30
In 2020, Venice, a neighborhood of just over 3 square miles, was
host to 1,981 homeless people, up 57% from 2019. The homeless
population in Los Angeles County rose by 12.7% during the same
period, according to data from the Los Angeles Homeless Services
On March 17, in response to the Covid crisis, the Los Angeles
City Council approved a measure suspending enforcement of laws that
prohibited people from leaving tents assembled during the day, thus
legalizing encampments that have sprouted throughout Venice and
other parts of Los Angeles. Mike Bonin, the 11th-district council
member who serves the Venice area, said homelessness is increasing
across Los Angeles and consequently is also growing in Venice.
"Another reason is there is open space on the beach to sleep," he
"I'm sure the fact that people are living on the street is
impacting real-estate values where it is most concentrated," said
Mr. Bonin. The solution isn't to outlaw tents or encampments, Mr.
Bonin said. Instead, "I want to build more homeless housing and
homeless shelters in Venice," and throughout the West Side.
Klaus Moeller, a co-owner of a Ben & Jerry's ice-cream
franchise in the heart of the Venice Boardwalk, said that as the
encampment has grown throughout the Covid crisis, his sales dropped
by 70% because neither visitors nor local families come to his
"There were always hippies, skateboarders and people smoking
pot," on the boardwalk, Mr. Moeller said. Today, he finds the scene
more menacing, saying he has witnessed drug dealing and stepped
over hypodermic needles on the beach. His employees have been
harassed and assaulted, he said.
Venice's identity as a bastion of luxury and chic was ignited in
2012, when real-estate prices began skyrocketing. Prices
per-square-foot peaked in the first quarter of 2016 at $1,287, said
Mr. Miller. Today, the average price-per-square-foot is $1,050,
said Mr. Miller, noting that it is typical for price-per-square
foot to drift lower when home size grows.
Technology companies such as Snapchat and Google leased
commercial space in Venice, burnishing the area's reputation as the
epicenter of Southern California's tech industry. Developers bought
up small cottages and transformed them into larger, modern luxury
Russ Cletta, a 56-year-old landscape architect, and his partner
Harry Gundersen, a 56-year-old computer visual-effects artist,
moved to Venice in 1992. In 2003, the couple paid $430,000 for a
2,336-square-foot home built in 1909, as part of a larger deal in
which they bought an adjacent lot and cottage (and a friend bought
a lot adjacent to that). The couple spent roughly $300,000 on
renovations of their residence, Mr. Cletta said
The home has dramatically increased in value. Tami Pardee, whose
brokerage is based in Venice, didn't visit the property but, based
on square footage and location, estimated its value at roughly $3
million. If the couple had put the home on the market in late 2017
or early 2018, when Ms. Pardee said that similar homes were in peak
demand, she estimated it might have fetched $3.2 million.
But some of the forces that have contributed to that valuation
have caused the area "to lose some of its funk," Mr. Cletta said.
Abbot Kinney, Venice's famous shopping street, is "too bougey" for
their taste, Mr. Cletta said, using a slang term for bourgeois and
Oliver Damavandi, a real-estate developer, rode the sea change
in the area with an epic house flip. In 2015, he paid $1.425
million for a Venice house he lived in, then renovated "top to
bottom," and sold in 2019 for $4.995 million.
Now Mr. Damavandi wants lightning to strike again, though it may
be trickier. In 2015, he paid $1.53 million for another Venice
property that he has since rebuilt with "lots of Covid amenities,"
including a pool and tropical landscaping.
Mr. Damavandi's second house first came on the market in late
2019 asking $5.8 million. Last February, it was listed with a
brokerage at $5.548 million. He didn't rush to lower the price
because he enjoyed living in the home himself throughout the
pandemic, he said. In late January, he relisted it with a new
agent, Ms. Hohnen, and a slightly lower price, of $5.395
The handful of houses in the $5 million to $6 million range that
sold in 2020 were on the market for an average of 63 days, Mr.
Miller said, making Mr. Damavandi's listing an outlier.
Mr. Damavandi believes his house will now find a buyer as the
Covid crisis subsides. He said the home is near bars, restaurants
and shops, and said it is less affected by the problems of living
in an urban setting because it is gated, has dense foliage and is
designed so the home isn't visible to the neighborhood and vice
Mr. Mazer takes the long view on Venice, believing he got a
great deal on beach property that would cost far more in Manhattan
Beach or Malibu.
"I still believe Venice will be vastly improved in over the next
10 to 20 years," he said. "There's a lot of room for
Write to Katy McLaughlin at email@example.com
(END) Dow Jones Newswires
March 04, 2021 13:00 ET (18:00 GMT)
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