Here we go.... another blog about the tide of the housing market.

Played out phrases get tossed about by people who are hit the hardest in the community and give those who are in it for the long run a bad name; All it took was a period between 02' to 05'  for the under qualified and opportunistic  to contribute in breaking an already fragile market -- many are mortgage brokers who are trying to move on to greener pastures and looking recession proof industry while the people who were lent money they couldn't pay are left with debt and foreclosures. Here we are with rate cuts and soft periods allowing us to examine what really will constitute the next changing of the tide.

 One unique perspective to look at is the order in which Los Angeles reacted to the housing slump. During this recession I have happened across areas in Los Angeles that have found that in certain areas, values have fallen while in others they have come to a balancing point. Historically, the first market to be hit has been condos; Real Estate in Los Angeles suffered a steep decline in 1994 when the L.A earthquake happened. Many investors and home buyers were tentative about purchasing years later for fear that another quake would rattle their investment. A supplementary effect to this time period was that interest rates were at an astronomical level, ranging from 9% all the way up to 19% -- those factors alone can send a market reeling.

I was visiting a close friend up in Burbank a few weeks ago and we got to talking about his professional success, how he is moving up in the company and surviving the L.A commute to and from work. He is commuting 15 miles each way but it takes him an hour to get from point A to point B, and another for the trip home. We started chatting the price of oil per barrel and hitting that 100$ mark and how that was going to effect the economy and how that impacts his next big purchase -- a condo in downtown L.A.

 While these two factors aren't directly related, the price of oil per barrel hitting 100$ and housing costs, they are linked by our economy. As one area slumps, so does the other. The cost to fill up the ol' gas tank hurts in many ways, including transportation costs and processing of building goods which effects the overall profit a company makes in producing and developing a project. This ends up effecting you the buyer.

Gas prices in California are high, the cost of living is down right exorbitant and surviving is getting tough, but there is a light at the end of the tunnel -- While thinking about the great depression and periods of recession within the last 100 years in the United States it is evident that relief can come from many subtle changes in governing infrastructure and international trading changes. The key to success may lie in accepting that this is a hard period for our economy and making smart adjustments with our finances will get us through this downward sloping trend.

During 2007, Southern California and more specifically San Diego and Los Angeles, were hit very hard by the declining market.  This is no secret.  As we watched the whisper of a real estate bubble turn to a national media frenzy the sales of San Diego condos and Los Angeles condos slowed dramatically causing inventory levels to rise, values to drop, and layoffs to occur in the construction and mortgage industries.  The most optimistic of analysts and economists stated in 2005 that there was no bubble and that the market might correct but not crash.  This was true for some markets but not most.  Now these more optimistic analysts are saying that we will continue to see condo and home values decrease for another 6 months to a year and start to see a correction in 2009.  Of course this means that market conditions may not be what we would consider “good” until 2010 or 2011.

Some real estate professionals in San Diego and Los Angeles feel that there is at least an inkling of consumer confidence starting to emerge.  Not so much in the fact that the market will correct soon and become healthy, but that for long term thinkers and condo buyers…now is the time to buy.  There are and will continue to be great opportunities through 2008. 

Think back to a time when you saw something that someone else had or that you wanted so badly.... Did you beg your mother or father to get it for you if you promised to be good? Did you vow to do the dishes for 2 weeks in a row or pinky swear to never fight with your siblings again?

Was is it a bike or a calculator watch? Was it a a pony? Regardless of what it was, it was marketed the right way and it reached its intended audience. That concept in it self is very straightforward; An entity considers their development to be built to the highest standards to serve a purpose. At NewCondosOnline we are the best condominium advertising outlet on the internet, BARNONE! What makes us the best? We reach a targeted market of homebuyers and investors by implementing a wide variety of specific tools that the consumer would use. Google, MSN, Yahoo? We spend more than a MILLION dollars a year in optimizing our web presence! We work with 1300 different developers across the WORLD; Belize, The Dominican Republic, Costa Rica, Washington D.C, New York City.... you name it and we are there. Its something we take very seriously over here and we are only going to step it up from here. 2008 is going to be a very productive year and we are expecting to see another successive year of growth.

So if you're trying to reach your intended audience *HOMEBUYERS* , come see us. We'll get your name out there and help you show off that beautiful development you've been working on.

A staggering number of climatic events are threatening some major cities in the United States in the past 10 years. Atlanta is seeing a depletion of their natural water source and that grim reality is leading to panic around the world as we are beginning to face the facts that our natural resources are not unlimited. We are also seeing an increase in greenhouse gases and harmful carbon dioxide emission especially in large cities including Los Angeles and Washington D.C. It seems like we are digging our own grave by doing this to our atmosphere and earth; what is of more concern is that the earth will see an increase in hurricanes, floods, snowfall, heatwaves and ice storms.

 As gripping and urgent as this situation is, there is hope. Hope because we as a people are taking the proper steps by reducing emissions, greenhouse gases, water consumption, energy consumption and implementing more strict guidelines for the future. This is GREAT news for the potential and current home-buyer because as more strict standards go into place, we see an increase in the quality of a budding condo or  town home development using state of the art technology in making you living as clean and energy efficient as possible.

 We are on our way to reducing the negative effects that have been causing so much harm to our environment. The end result points towards a new frontier of modern living that promises to make the world a better place. 

Los Angeles in the winter is thought to be a sunny haven for super models and infamous actors. While many actors reside in L.A, the weather is very, very chilly. I know its cold when the ambient temp gauge on my new BMW M5 is prefaced with a "snowflake" icon. Although the weather is chilly and people are gearing up for the Holidays, the sale and excitement of individuals buying condos and moving to Los Angelesis somewhat staggering. Many of our developments have been receiving more traffic during this "cold" season than in some of our more recent busy months. I have a feeling that is due to several factors, including but not limited to home and condo prices dropping and a new type of buyer moving in.

While the nat'l housing market is expected to tumble well into 2008, the Downtown LA market is faring considerably better, according to a 2nd quarter update by CB Richard Ellis. The study found the average Los Angeles condo sale price was $635,005 (an increase of 1.8% over the prior quarter) By comparison, the average price for a home in L.A. County during the same period was $535,000, (down 1.8% from the previous quarter) Construction of new condos averaged just over 80 units per month during the 2nd quarter, a nearly 100% increase from the previous quarter.  Still, there are only 199 new units available for sale.  The report found that there was a total of 108 units of both resale and new construction sold per month, up from only 57 transactions per month in the prior quarter. "Increasing demand for condominium housing in Downtown LA is beginning to positively affect average prices paid per square foot," said the report. "Downtown L.A.'s recorded condominium sales increased nearly 3% in the most recent quarter." The rental market is also producing at record levels, with occupancy up to 92.9% in Downtown. Another 1,000 units are expected to open in the next six months, with rental rate increases continuing well ahead of inflation.

Source: LA Downtown News

If you have been reading the papers lately than you will know that they have just broken ground on the new 52 story Ritz Carlton Hotel next to the Staples Center as part of the LA LIVE complex. LA LIVE also includes the Nokia Theatre (7,000 seat live concert venue), ESPN broadcast Center & Fun Zone, 15 cinema megaplex, retail shopping, dining, etc. (all being developed by Rick Caruso, the creator of the Grove). This assures that Downtown LA will really be on the map FOR SURE.

Also, another new Los Angeles condo project, the PARK 5, a 72 story luxury residential complex together with a 5 star Mandarin Oriental Hotel will rise from an empty lot on Pershing Square in the heart of the Historic Core Downtown. This project also assures that values in this part of Downtown are also likely to go SKY HIGH!.

I've got listings at all price levels and can help anyone considering a Downtown investment of any kind. Just let me know. Visit my website at:

www.neilmcdermott.com

Or call my office: 323 769 3349. Thank you. Neil McDermott

 

 

 

We all love celebrity condo stories. Developers seem to be flocking to celebrities and giving them discounts to draw more attention to their projects. The latest news comes from Arnold Schwarzenegger commiting to buying a penthouse condo at the new upcoming Ritz-Carlton Residences in LA.

“I right away committed to buying a condominium,” Schwarzenegger said in a speech at a groundbreaking ceremony for the building today. “That's a no-brainer.”

Schwarzenegger was looking at plans today for units in the residential-and-hotel project, which also includes J.W. Marriott and Ritz-Carlton hotels with 1,001 rooms and a 54-story Ritz- Carlton Residences, said Michael Roth, a spokesman for AEG, a unit of closely held Anschutz Co. that is developing the $2.5 billion L.A. Live project.

“He asked for a penthouse,” Roth said. source: OC Register- Orange Country News Source

This looks like a great project and a great addition to the Los Angeles Condo market.  I am sure having the governor there won't hurt the press on this project either. Yippy kay Ay- I am buying a Condo!

Hollywood, California. After the 1920s, and all the movie-making glamour, this region of Los Angeles became infested with crime, prostitution, and drugs. It was a typical old-west boom town, that hit its prime and started to fall back down. Hollywood did not, however, fade away. In the late 80s and early 90s, restaurants and nightlife came back to this area, and some residential developers began to take some interest Hollywood again. The buzz actually checked out and recently, many people are flocking to the area for luxurious new condos and new lofts in Hollywood.

We have all heard of infill development or re-development but a developer in Los Angeles has taken this to a new level.  The developer based in the UK paid $500 million for a former Robinsons-May Department Store in Beverly Hills. He plans to develop 252 luxury Los Angeles Condos overlook a famous country club.  This developer plans to model the complez after a famour condo building in London. A lot of people in the Los Angeles and Beverly Hills area are opposed to the development because a Waldorf-Astoria Hotel is also going up next door along with other new development and people are concerned about the massive amounts of further traffic the development would cause. Los Angeles already has tons of traffic. We actually drove up there the other day for a meeting and it took 4.5 hours to drive 120 miles. The new developments does sound pretty incredible but I can hear all the shoppers crying. I wonder if this is a trend that we will continue to see. In the major cities, with less land being available, I would imagine that we will see this a lot in the future as developers will do anything these days to find the perfect spots to build their condos.

Source: http://news.monstersandcritics.com/

 NewCondosOnline.com is proud to feature some great new projects in downtown Los Angeles.  These great new Los Angeles condos include massive mixed-use developments like The South Collection, Little Tokyo Lofts, Library Court, and Puerta Del Sol.  Like many downtown central business districts, Los Angeles is undergoing large-scale redevelopment which inlcudes rehabing industrial buildings for new urban development as well as new construction like The South Collection by The South Group development company.