The Pacific Palisades, Calif., Ultra-Luxury Market: What You Need To Know

Located west of downtown Los Angeles, Pacific Palisades is an affluent neighborhood that effortlessly combines luxury with the welcoming embrace of a tight-knit community. Renowned for its seclusion and cherished sense of privacy, it exudes a small-town charm that has attracted some of the world's most illustrious Hollywood stars to make it their home.

In addition to being top-of-the-line luxury living, Pacific Palisades is also filled with life, fun, and outdoor activities to keep you active and engaged. It has a Mediterranean climate and abundant natural attractions, including lush parks, hiking trails, and an extensive strip of coastline. Residents here have easy access to upscale amenities, including eclectic shopping spots and high-end restaurants serving diverse cuisines worldwide.

Known for the highest caliber of luxury homes, Palisades is ideal for investment property or vacation homes. The neighborhood's luxury real estate offers a range of options to suit everyone's tastes and preferences. You can choose from pricey single-family homes on private lots with enormous specifications and impressive architecture or extravagant, large estate-style homes nestled in the hills with great views of the ocean below.

If this grandeur location interests you, the local real estate experts at Sam Palmer share all you need to know about The Pacific Palisades to help you make informed home purchase decisions.

Pacific Palisades is famed for its multimillion-dollar properties and luxurious homes, offering stunning ocean views and natural attractions. The beachfront neighborhood is brimming with luxury homes that command some of the highest prices in California. Residences close to the ocean are especially in demand and fetch premium prices due to their exclusivity and beach access. Here are some of the things to know about the Pacific Palisades real estate market:

As one of the most affluent neighborhoods in L.A., Palisades commands some of the nation's highest housing prices, making it a preserve for the wealthy few. With the median prices averaging $3.9 million, this premium neighborhood is a hot market that promises high returns for any investor willing to make a move. Despite these sky-high prices, the demand for luxury homes in the neighborhood has been growing amid a low inventory and high cost of building.

Like the rest of the country, the mortgage rate in Palisades has been on an upward trend. As of September 2023, the interest rate on a typical 30-year fixed mortgage was 6.08%, up from 2.96% in 2021. This increase is attributed mainly to the Fed's hike of base rates in a bid to tame runaway inflation. Usually, higher interest rates can dampen the market, with high home prices discouraging buyers and sellers from transacting. However, Pacific Palisades is still strong despite increased mortgage rates, with the market experiencing some notable activity. Currently, the Pacific Palisades is a buyers' market with several homes to choose from. If you intend to purchase and hold on to a property for at least three to five years, this could be a great time to move.

Pacific Palisades property taxes are generally lower than the average L.A. County property taxes. As of 2023, the average property tax rate in the area was 1.49%, lower than L.A.'s rate of 1.64%. Lower tax bills mean homeowners have lower monthly housing costs, making it easier to qualify for mortgages and afford homes. This can stimulate demand for real estate, particularly among first-time buyers and those with limited budgets.

According to the U.S. Census Bureau, 29,465 people live in Pacific Palisades, a notable increase from the last census. The average individual income is $131,278.4, making this area one of the most affluent in L.A. With a growing population, high demand for housing, and low inventory, home prices in the area will likely remain high in the coming months.

Once you decide to buy an investment or vacation home in Pacific Palisades, next up is choosing the neighborhood to live in. This lovely enclave has several neighborhoods with unique styles, feel, and price ranges. You will find great schools, beautiful views, and top-tier amenities throughout these communities. The main neighborhoods are:

• The Alphabet Streets: This is one of the most popular areas in the Palisades, comprising mostly flat residential areas. The neighborhood is within walking distance of the shipping district of the village and other amenities, including schools. Popular with young families, this neighborhood offers homes worth around $1 million for a 900-square-foot bungalow. You will also find new homes in the range of $3.0 million or more.
  
  
• The Bluffs: This neighborhood is located south of Sunset towards the beach. It is a flat residential area that enjoys terrific ocean breezes and easy access to bluffs overlooking the ocean. The upscale neighborhood features Via de la Paz Bluff and the El Medio Bluff residential properties, comprising small bungalows and pricey custom homes.
  
  
• Castellammare: This charming seaside neighborhood resembles the Amalfi coast in Italy with stunning ocean views, beautiful Italian street names, and tiny winding streets to create a permanent vacation feel. Homes in the neighborhood range from small villas to new European-style estates.
  
  
• The Highlands: The Highlands is one of the newest neighborhoods in the city. It started as a series of track homes built in the hills above Sunset. It is among the few areas in Palisades with condos and townhouses. Many homes here are large in square footage and are affiliated with the exclusive Summit Club. This neighborhood is especially popular with families and celebrities, owing to the many gated streets.

A range of factors make this neighborhood one of L.A.'s most expensive places. Top among these is its central location. Pacific Palisades is located on the west side of Los Angeles, with easy access to stunning coastlines and picturesque mountain views. Other reasons why Palisade is so expensive include:

• Privacy and seclusion: Compared to other cities in L.A. County, Palisades offers more privacy and seclusion, making it a favorite residential neighborhood for high-profile individuals, including A-star celebrities, CEOs, and business tycoons who love a feeling of seclusion and close-knit community vibes.
  
  
• The affluence: The high demand for luxury properties in the neighborhood has increased real estate prices. With more Hollywood stars flocking to the area for perfect mansions, Palisades remains affluent. Some famous people living here include Ben Affleck and Jennifer Lopez, Adam Levine, Steven Spielberg, Tom Hanks, and Billy Crystal.
  
  
• Limited supply: There is an acutely limited inventory in the neighborhood, owing to its geography, that limits the amount of available land for development. As a result, prices of the existing homes keep rising with increasing demand.
  
  
• Top-rated schools: Pacific Palisades is home to some highly-rated schools in L.A., such as the Palisades Charter High School. This school was ranked among the top public high schools in the U.S. Affluent families with school-age children are often willing to pay a premium to be part of the neighborhood. 

Pacific Palisades, celebrated for its opulent lifestyle and the peace of its coastal surroundings, effortlessly combines the upscale charm of Los Angeles with the serenity of its coastal locale. This city has earned its esteemed reputation over the years thanks to its numerous multimillion-dollar properties, luxurious homes, and breathtaking views. If you plan to buy or sell a home in Palisades, contact Sam Palmer today. Leveraging his extensive expertise and deep understanding of the local real estate market, he can assist you in finding your ideal home that aligns with your requirements or in securing premium prices for your current property.