Why Pasadena is a Great Place to Invest in Real Estate

Over the past few years, Pasadena has been one of the hottest real estate markets in the country. However, the economy has changed quite a bit in the past few months. Rising inflation, interest hikes, and fears of a recession are likely to cool Pasadena's red hot market.

While the market is cooling, it probably won't be crashing any time soon. The fact remains that the greater Los Angeles area has an inventory shortage, and that won't change for some time. According to Norada Real Estate Investments, the Los Angeles real estate market will continue to grow. While the historic sales figures are probably over, real estate appreciation is expected to continue.

Los Angeles County presents many cities and neighborhoods to choose from, but Pasadena real estate is perhaps the best suited for investment. Here's why.

 

Prior to the 20th century, Pasadena was a large expanse of ranches and farms. As Los Angeles rapidly grew, Pasadena transformed from an agricultural center into a resort town. Many new arrivals in LA fell in love with Pasadena for its rolling hills and gorgeous landmarks like Gamble House.

 

As Pasadena grew, many new residents wanted to keep the architectural style of old Pasadena. The result is a fusion of old styles with modern amenities. Pasadena's architecture is a major selling point for visiting tourists and prospective residents. So much so that there is a cottage industry of tours focused around Pasadena's beautiful buildings.

As Pasadena was originally a tourist town, it's no surprise that it is full of parks and wilderness areas. Pasadena was originally built to offer an escape from city life, and those roots can easily be seen today. While the resorts of the past have mostly disappeared, the parks and wilderness areas remain. Pasadena has dozens of parks and recreation sites, attracting residents who want easy access to nature.

 

Perhaps the most well-known of these is Hahamongna Watershed Park. This 1300-acre park includes parts of the San Gabriel Mountains, offering residents easy access to hiking trails. The park includes plenty of picnic areas, biking trails, and a 24-hole Frisbee golf course.

 

Eaton Canyon Park Natural Area is another popular spot for nature enthusiasts. It is a bit more rugged than Hahamongna and is more so geared to those who want more of an adventure. This park covers nearly 200 acres and will provide some of the best vistas of Pasadena.

 

In addition to these natural areas, Pasadena is full of parks with manicured landscapes that are within walking distance of most homes. No matter where you end up buying a home in Pasadena, there is probably a park just a short walk away. The open space is a double-edged sword for real estate investors. It makes the area more attractive while also limiting new construction, both of which keep real estate values trending upwards.

Pasadena is chock-full of attractions that keep residents entertained and attract tourists from around the world. Perhaps the most notable art attraction with year-round activities is the Norton Simon Museum. The art museum has international acclaim for being one of the largest private collections in the world. It was founded by an industrialist of the same name and specializes in European art ranging from the renaissance to the 20th century.

 

 

The Rose Bowl is one of Los Angeles' most impressive landmarks, and it is located in the heart of Pasadena. While it is primarily known for being the home of the UCLA Football team, it hosts countless other sporting and cultural events. This includes the Rose Bowl game, which is preceded by the famous Tournament of Roses Parade. Other events include international soccer games, drum corps competitions, concerts, and the monthly flea market, which is known for attracting celebrities.

 

These attractions, and many others, make Pasadena a great place to invest in real estate for short-term rental opportunities that cater to tourists. 

While Pasadena offers plenty of world-class attractions that will keep real estate valuable, its real asset is in the highly educated population. Pasadena is home to the world-renowned California Institute of Technology, better known as CalTech. CalTech is often regarded as one of the best schools in the world, especially for students who wish to study aerospace engineering. The school has produced 40 Nobel laureates over its history. Many students opt to stay in Pasadena after graduating, which ensures there will be plenty of high earners in the Pasadena real estate market.

 

 

Some of these graduates will go on to work at the NASA Jet Propulsion Laboratory. JPL plays a critical role in developing new technology for the space agency. Many of the Martian rovers were originally designed in this Pasadena laboratory. It is fair to assume that Pasadena has the highest number of rocket scientists per capita in the world.

 

As a result of CalTech and JPL, most landlords won't have a problem finding tenants. After these students graduate, many stay in the Pasadena area. Countless tech and aerospace companies have hubs in Pasadena, ensuring that there are plenty of high-paying jobs in Pasadena. This makes Pasadena real estate well suited for both rental investments and long-term holdings.

One of the golden rules of real estate value is "location, location, location." This applies on both a macro and micro level. In Pasadena's case, being so close to Los Angeles is a tremendous asset. Several major freeways run through Pasadena that grant easy access to Los Angeles. Pasadena residents also have fairly easy access to Burbank and Glendale.

Perhaps one of the most important things when looking to buy Pasadena real estate for investment is understanding the neighborhoods. Some neighborhoods are just better suited than others when it comes to property appreciation. These are our recommendations for the best neighborhoods in Pasadena.

Oak Knoll is on the eastern side of Pasadena. It is well known for having grand estates and luxurious homes. However, there are still condos and townhomes available in Oak Hill. Condos tend to cost between $580,000 and $950,000, whereas townhomes can go between $600,000 and $850,000. There is a wide range in single-family home prices and spans as far as $860,000 all the way up to $14 million.

True to its name, Old Pasadena is one of the more historic neighborhoods. It is full of tree-lined streets with Victorian-style homes. Its charming design and architecture make it one of the most popular neighborhoods in Pasadena. Single-family homes can vary a great deal in quality. Buyers can choose from a mid-range house all the way up to high luxury. As such, there is a large price range, typically spanning from $425,000 to all the way up to $8 million.

Downtown Pasadena is the best neighborhood if you favor walkability. Many businesses, restaurants, and shops are within walking distance. Buyers can choose from condos, townhomes, and single-family units. Condos tend to cost between $425,000 to $900,000. Townhomes span from $550,000 to $1.3 million. Finding a single home for under $1 million will be incredibly difficult. Most single-family units cost between $1.4 million and $3.7 million.

South Pasadena typically offers more affordable real estate. Often called "The City of Trees" for its lush growth, South Pasadena will also offer a shorter commute to Los Angeles than other neighborhoods. Home prices in South Pasadena typically range from $575,000 to $1.3 million.

North Central Pasadena is generally considered the most expensive neighborhood in the area. Many of the homes in North Pasadena are easily considered to be luxurious and come with a luxury price tag. Many of the homes are newer and tend to be equipped with the latest amenities. Home prices typically range from $850,000 - $1.5 million.

This neighborhood is located in the northern part of Pasadena. It is sought after for its convenient location to cultural attractions. The Gamble House, The Rose Bowl, and Hahamongna Watershed Park are located within North Arroyo. This is the best place to invest if you want an investment that caters to tourists. Home prices typically range from $725,000 to $2.1 million.

As you may suspect, South Arroyo is located just south of North Arroyo across the Ventura Freeway.  South Arroyo is best situated for those who want larger homes in a quiet setting. Unlike other neighborhoods, it is easier to find vacant lots in South Arroyo should you want to build a new home. The cost of these lots can range from $135,000 to $700,000. Homes can have a huge price range in South Arroyo, typically spanning from $850,000 to $7.4 million.

Whichever neighborhood you want to invest in, it's important to team up with a realtor who knows the area well. That's where The Hairabedian Group can help. Andy grew up in the Los Angeles area and has a deep understanding of the Pasadena market. His family has been involved in LA real estate for decades and even appeared on "Million Dollar Listing."

 

Feel free to take a look at our Pasadena homes for sale. For more information on these listings, you can contact us anytime.