But with downtown rents nearing $2,000 on average, according to REIS Inc., landlords don’t have much of an incentive to flip their units for sale, experts said. One potential new condo source could come from conversions of units that became rentals after the bust. A six-month supply is considered a balanced market, in which neither sellers nor buyers have the advantage. If previously owned condos continue to sell at their current pace, the available homes would sell out in 2.4 months, according to the Mark Co. The remaining eight units are in the final phase of Barker Block, a former furniture warehouse in the arts district near the Los Angeles River. As of Monday, there were two multimillion-dollar penthouses at the EVO, where the Mark Co. “It says there are people who could afford to live anywhere, and they are choosing to live downtown.”Īt the moment, there are only two options for those looking for a new condo downtown. “The fact that it actually sold out - it’s huge,” said Elizabeth Lande, international estate broker with Engel & Volkers. Sales surged in 2013, and the final six units sold this year, according to the Agency, the brokerage firm handling sales for AEG. Live in 2011, downtown’s most extravagant condo development remained mostly empty amid a hangover from the economic collapse.īut last month, the luxury project sold out its 224 condos when a Chinese buyer paid more than $4 million for a penthouse, AEG said. When developer AEG opened its luxury Ritz-Carlton Residences at L.A. With so little new construction, once-struggling condo projects are rebounding. “If you are developing condos, you don’t know whether there will be buyers around.” “If you open your doors to a bad market, you drop your rents and get your apartments occupied,” Green said. Others who expect to change jobs or careers prefer the flexibility of renting.ĭevelopers see a different kind of flexibility in building apartments over condos, said Richard Green, director of USC’s Lusk Center for Real Estate. An additional 1,361 units are scheduled to become available in 2015.ĭevelopers say younger adults, many saddled with student debt and delaying marriage, are likely to remain renters for the foreseeable future. Nearly 1,600 downtown apartments are scheduled to open by the end of the year, said Enrique Wong, regional manager of commercial real estate brokerage Marcus and Millichap’s downtown office. Now, most new developments are rentals rather than condos. Condo construction all but stopped after last decade’s housing crash, and projects once pitched as condos became rentals. Most developers, burned by the last boom-and-bust cycle, are still sitting on the sidelines. But the tower isn’t scheduled to open until July 2016 at the earliest, according to the company’s chief executive, Ifei Chang. Greenland USA plans to start construction next week on a 308-unit condo tower near Staples Center, one piece of its massive Metropolis project. The growing demand has lured at least one major developer. “People are willing to overlook that,” Marsico said. And buyers, he said, are settling for homes they normally would shun - units without parking, for instance, or in buildings entangled in litigation. Real estate agents like Kerry Marsico are tracking down absentee owners who don’t live in their condos and urging them to sell.
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