A roundup of what’s coming to the market.
The Los Angeles real estate market is relatively strong and stable, but unlike New York City, the West Coast city is suffering from an ongoing lack of inventory. “We have not seen enough new construction or an increase in housing stock of any kind,” said UCLA Ziman Center for Real Estate Professor Paul Habibi. He hopes that activity will pick up in the spring selling season, but “regardless of seasonality, inventory has been very low.” The number of homes for sale in the Los Angeles area declined 22.8% last year, according to Zillow.
The number of active listings in the fourth quarter of 2017 in Los Angeles dipped 23.3% compared to the third quarter, from 2,522 to 1,935, according to a recent Douglas Elliman report. For the overall condo market in Los Angeles, “there is a remaining inventory of 1.2 months, down 61% year over year,” said Mike Akerly, vice president, regional manager at Polaris Pacific, which does consulting, sales and marketing for developers of high-density projects on the West Coast and Hawaii. Normally there is a six months supply of inventory. Mr. Habibi, who is also a builder, landlord and developer, remains optimistic about the overall market. “There have been fewer sales, but the deals are happening at a higher price point,” he said. In Los Angeles, 38% of homes now sell above asking price, according to a recent report from Zillow. Almost 18% of homes sell for over $1 million, according to a recent report from real estate data tracker CoreLogic.
“The luxury market has continued to exhibit strong pricing movements,” Mr. Habibi said, and developers are responding by bringing those luxury condos to market. “Downtown has really been a hotbed of development, with domestic developers as well as developers from China and Canada,” he said. “Just look at all of the cranes downtown.” Most downtown condos are now in the $1,000 to $1,200 per square foot price range, Mr. Akerly said. Most buyers fall into two categories, he said. They are either millennials—both singles and couples—or “what I call right sizers who are downsizing from a single-family home.” “Downtown, no doubt, is being saturated by high-end rental and for-sale units,” Mr. Habibi said. “Most of the concentration of high-end housing is happening there—the Arts District is still on fire.” “The big question is whether downtown can absorb all of this inventory,” Mr. Habibi said. Here is a look at some of the most interesting projects expected to hit the Los Angeles market in coming months.
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