Will the credit squeeze affect LA revitalization? (short sales, lofts) - City-Data Forum

TrojanDLA · 08-16-2007, 10:34 AM

Talking to a few developers and agents in downtown L.A., I've been told that they expect at least 9500 new units to be available over the next 10 months and developers are submitting new permits for further development with the expectation that 30,000 new residents will be buying into downtown over the next several years. Of course, this discussion was about 2 months ago. Much in the mortgage market has changed since then, and specifically, loans are difficult to procure without a substantial downpayment.

Do you all think that changing credit conditions is going to ground the revitalization of Downtown to a halt? I'm seeing pricing pressures already at the resale level, and was wondering if this is going to have an impact on the long pipeline of lofts/condos in the works.

The mayor's recent initiative to allow an "easier" path for developers to produce residences has spurred a jump in construction permits, so maybe we'll see some more affordable units in addition to the $500,000 one bedroom lofts being released presently.

JackSparrow · 08-16-2007, 11:04 AM

It depends on TRUE NUMBERS. And what I mean by that is exactly how many people cannot swing their mortgages after their ARM's adjust. The real numbers will answer your question. I don't have the statistics in front of me, but if it's in the "worse" of the projections, yes- it will affect revitalization, because it will affect EVERYthing. But I suspect the numbers will be milder, and at worst could slow development, but not much else.

$0.02

TrojanDLA · 08-16-2007, 11:40 AM

I guess we can expect to see quite a few short sales after this winter's reset extravaganza.

JackSparrow · 08-16-2007, 12:06 PM

Potentially. It would be a good time to scoop one up if you're in the market. Prices are down some from 6 months ago, but up overall for the past year to date according to my research in the area I am looking into- if that makes sense. I'm still going to wait until next summer for my own personal reasons; but I am tempted to buy now on a unit that I have seen drop in the middle of a price-rising neighborhood. I think the owner wants to unload it, and therefore the price drop. I have time...

Sorcerer68 · 08-17-2007, 02:00 AM

I'm waiting with dripping fangs. We'll be there soon enough. I've had some fun with pre-forclosures...