Los Angeles is the most overpriced housing market in the country. Prices are falling like a rock and they have a long, long, long way to go...
Look at this chart for a snapshot of Los Angeles versus other housing markets and you will see that nowhere is as overpriced as LA.
Also, check out this article:
Prices will fall to get in line with Home Price vs. Rent and Median Home Price vs. Median income ratios. You will probably kick yourself if you buy a home anytime soon. Renting is your best bet right now, and wait to buy in 2011 or 2012 or even later.
If you bought a condo for $300,000 and next year, you saw an identical condo in that buildingselling for less than $200,000, would you kick youself? You are in a prime position to rent a great place and negotiate a great price for that rental. Save your money and buy in a few years.
But if you are the type to hold onto these properties for future generations, then Evo or Elleven are great choices. Elleven has resales already available and Evo won't be ready for occupation for another 9 months. Equally promising alternatives for future resale value is Eastern Columbia. I'm looking forward to the Brockman building myself.
Nevertheless, keep in mind your time horizon. Holding on for 10 years? go ahead and buy, you will not be out money when selling it back in 10 years. This only applies to Downtown L.A. properties. If you are willing to buy in San Marino, then you should buy now as the prices there will be more insulated from the correction due to the lack of speculation in those neighborhoods.
The L.A. Condo Store
Downtown Sales Specialists
Downtown Los Angeles is an exciting place. As a resident of downtown and a real estate agent I can tell you there are so many different areas, buildings and choices for your son. There are some wonderful buildings that only provide rentals and other buildings are for sale. If you would like to learn more about the different lofts, you can visit:
This website is not driven by a real estate agent or a real estate company.
I have lived in downtown L.A. for almost 3 years now and have seen it change dramatically over time. I would love to answer any questions you may have or address any concerns.
You can reach me at 310-777-2874 or at email@example.com
I hope I can help you and your son.
The Sanborn Team
Prudential California Realty
Evo is now being offered for sale. I'm not sure yet what the status on the other projects is. In this market everything is negotiable. Los Angeles has pockets where real estate is not going down but has actually increased. I cannot give you the statistics at this moment for the downtown area.
I would be happy to assist you in finding your son a downtown loft/condo to move into.
Here is a news article about the South Group, Elleven:
Apart from a few â€œthe world is flatâ€ realtors, everyone realizes that residential real estate prices are falling in Los Angeles County. Those that are expecting a quick turn around from this bubble are dreaming. The last cycle took about 11 years to reach peaking pricing from the previous peak. Here are your Los Angeles County vanilla medians between 1989 and 2000: http://www.laalmanac.com/economy/ec37.htm
Pretty amazing, someone who purchased the â€œmedian homeâ€ for 214,831 sold for 215,900 11 years later. However, this bubble appears even larger that the 1989 run up, as depicted in the following graph: http://latimesblogs.latimes.com/laland/2008/04/where-we-stand.html . Granted prices are falling faster, so perhaps we can reach a bottom faster.
In my opinion this would generally be a terrible time to â€œinvestâ€ in real estate, unless you must buy now (because of a 1031 exchange, for example). All leading indicators are pointing in the same direction as to the Los Angeles market, (i) inventory has increased, (ii) sales transaction volume has slowed dramatically, (iii) lending standards have tightened (pulling thousands of potential buyers from the market), (iv) notices of defaults and foreclosures are at records levels, (v) the economy is slowing (looking more and more like a recession), (vi) literally thousands of high paying mortgage and other real estate related jobs have been lost in southern California over the past year and (vii) the mania which surrounded the real estate market a few years ago has been replaced by a conservative caution steering people to other investment classes. All of these factors will put downward pressure on pricing for some time to come.
The reality is that prices will almost certainly be lower later this year, likely lower in 2009 and possibly even lower in 2010. Real estate cycles take many years to play out and we are at the early stages of a down cycle.
With that said, if you can truly afford the condo with a large down payment and conventional financing and they don't care about prices dropping further, consider the purchase. But you SHOULD NOT purchase with the expectation of future price gains for a long time. If history is any guide, prices will not rebound quickly when the bottom is finally reached.
Best of Luck and congrats on having your son at USC. I am sure he will enjoy his experience there.
There are actually some good deals Downtown right now, but you need to know where to buy, and I agree with condo store in that it depends on your time frame to keep. (I don't think a generation is required)
I am happy to help if you have any other questions.
There is hundreds of years of statistical data available on the price of homes around the world--if you know how to do the math, you can forecast it well. You know how I know?
Because THE ECONOMIST magazine called the peak of the market in 2005. Why? They actually calculate numbers, and do not rely on BS wishful thinking and faulty reasoning like, "People want to live here."
It costs $98 bucks for a yearly subscription to THE ECONOMIST. You might want to try it rather than lose hundreds of thousands of dollars overpaying for real estate like the masses....
By the way, I'm going to be a buyer on the West Side of LA. Love the area. But I'm going to pay PENNIES on the dollar for a great home in a prime location. PENNIES. Not even 25 percent of the peak.