Speakers at CCA Housing Forum Tell of Hope for Housing Market
Eric Richardson
[Flickr]
Christopher Thornberg of Beacon Economics presents his opening remarks. To his right, Alan Mark of The Mark Company and Tom Muller of Manatt, Phelps and Phillips, LLP, and Tom Warren of Holland Residential Properties.
DOWNTOWN LOS ANGELES — While Downtown may have a glut of units on the market right now, people are still moving in. That was the message Tom Warren of Holland Residential Properties gave today at the Central City Association's 11th Annual Housing Forum.
Warren was one of four participants in the housing forum panel, which also included Christopher Thornberg of Beacon Economics, Alan Mark of The Mark Company and Tom Muller of Manatt, Phelps and Phillips, LLP.
According to Warren's data, vacancies Downtown should become much more scarce by the end of next year. 4,000 new units were added to the Downtown marketplace in 2008, 2,500 of which were market-rate rental units. While the rate at which those units are being bought or leased has slowed, Warren said that Downtown is still averaging 130 units "absorbed" per month. That's down from 200 per month before the recession hit.
Assuming that number stays relatively flat at 125 units per month, the 2008 / 2009 inventory should be fully absorbed at some point in 2010.
Mark, whose firm handles condo marketing, told the audience that the sales market was starting to show more signs of life. He said that Evo, a building his company represents, had sold a dozen units in the past week at more than $600,000. That's a change from previous months, where sales were concentrated on the lower-priced units.
Thornberg, who spoke on the overall economic picture, cautioned against getting too excited about improving conditions. "Hitting the bottom is a lot different than coming off the bottom," he said. He expects the U.S. economy to be weak for at least another year, but says that California is well-positioned to prosper from foreign trade in the next decade.
Don't expect any new construction in the near-term, though. Multiple speakers told of the lack of available financing for any new projects to break ground. When the capital does return, Mark believes it will be for 3-4 story wood-frame buildings and not high-rises.
The Housing Forum was recorded for airing on LA36, but air times are not yet available.
sheratonhotella
MOCAlosangeles
Buyers are feeling compelled to purchase (still overpriced) homes due to quickly rising mortgage rates and government incentives they would otherwise not be able to take advantage of. There is still far too much unemployment, in combination with large inventory levels, and demanding credit obligations to have our local real estate market truly stabilize.
Ownership for the large majority of Downtown renters will forever be slightly unaffordable. However, the notion that prices have stabilized is wishful thinking. I fully expect prices to drop another 14% within the next 6-9 months. Do keep in mind the numbers are revised quarter to quarter. The economic data the CCA is looking at today is sure to change in the future.