Downtown Drama — Housing Market Cooling, Cracking or Collapse?
As the reports of real estate market cooling appear in more communities across the United States, we are taking a hard look at where we are today, and where real estate might be in the near future. As some prices begin to stagnate or tumble, winners and losers appear as the dust settles. The winners usually turn out to be the home buyers, sellers, renters and landlords who are able to see what is coming early, and then take the right steps to survive, and even profit from every situation. Here’s how the iffy real estate news is already starting to dramatically play out in the initial phase of a Downtown real estate plateau. #dtla #loft #realestate
Many communities across the USA are still reporting white hot real estate markets. Notice that many of them are the remote areas and other portions of the country that were late to the party in benefitting from the dramatic real estate price escalation that started in Downtown Los Angeles around 2012. Desert areas like Arizona and Las Vegas are today still extra hot for two reasons: 1) Remote areas are last in line to benefit from a real estate recovery as the home prices rise to stellar proportions in the more popular areas first, such as Downtown Los Angeles; 2) Urban and suburban residents are cashing out and moving to the desert areas to escape crime and high prices, and to take advantage of the lower home prices in the remote areas.
Bane of Buyers
Downtown Los Angeles has been a primary epicenter of real estate energy since around 2002, when Downtown’s infrastructure began to improve, and builder developers began to convert abandoned buildings into amazing live-work residential lofts under the City of Los Angeles Adaptive Re-Use Ordinance. What L.A. Loft Blog readers know that others do not is that the thriving Central Los Angeles area is among the first to quietly lose a bit of enthusiasm as prices already skyrocketed to surprising heights by 2014, then continued a steep upward climb through 2017. The 2018 numbers are showing the first signs of Downtown real estate weakness as the average home sold prices slid down a bit. The highest property prices slid down, and the lowest property sold price slid down also. The number of prospective home buyers has slid, and the enthusiasm of Downtown home buyers has tumbled. We are seeing signs that initial desperation of loft sellers has already begun.
Shock to Sellers
Several recent prospective home sellers at loft condos in Lincoln Heights have been surprised that their home did not immediately attract offers. One of those sellers actually called the L.A. Loft Blog office to falsely accuse our real estate team of bullying and harassing them after we asked a tough question on the private community chat room: Who gave the listing broker permission to place a large real estate yard sign in front of the condominium building? As with virtually all condominiums, it’s against the CC&R’s to place large yard signs in front of the condo building where I live and help others to buy, sell and lease while carefully adhering to the rules. Breaking condo CC&R rules and unethical activities like misplacement of large signs and lockboxes, defeating MLS rules by repeatedly rapidly listing and re-listing a property to make it appear to be a fresh listing, breaking other laws, and hiring real estate salespersons and brokers with a history of breaking laws and rules are signs of seller desperation.
D.C.-area real estate market is slowing.
LA home prices drop for the first time since January
As promised in the title of this article, we will predict the winners in the dismal game of economics. The winners are inevitably those who have cash at the right time, who buy, sell, or lease at the right time, and who have the foresight and continuing resources to carry through a sensible plan of action. The winners? The big money billionaire investors have already placed their bets that rent prices will soar and soar in Downtown Los Angeles for many decades to come. There have been many thousands of more down-to-earth big winners who own lofts today. They are the smart, creative loft owners. As for the other side of the dice, the biggest losers in real estate are typically those who buy at the top of the market, lose their sole source of income, a price slide, and then feel forced by cirsumstances to sell at a low price. While many renters feel that they benefit by not avoiding the real estate roller coaster ride, renters lose big due to opportunity cost and stagnation of net worth. The average homeowner has a net worth that is an astounding 44X larger than that of the average renter. The wealth effect of homeownership, along with pride of ownership, make it super satisfying for a great many city dwellers to make the biggest investment of their lives in pricey Downtown L.A. real estate.
Time and again, Downtown has survived downturns. Forged through struggle and triumph, DTLA emerges stronger than ever before in one of history’s greatest stories of rise, fall and renaissance. A happy ending is in the cards for L.A. loft lovers.
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Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.
