Downtown Los Angeles is not proving to be the magnet for residential living that its developers and boosters anticipated, reports the Los Angeles Times.
The housing slump seems to have disproportionally dampened demand and prices in Downtown Los Angeles, while nearby markets such as Silver Lake-Echo Park remain more or less flat. According to Dataquick, the median sale price for 4th quarter 2007 in Downtown Los Angeles was $497,360 -- 16% below the peak reached in early 2007.
Downtown developers are offering hefty incentives -- from Mini-Coopers to gobs of upgrades -- to lure buyers to languishing units. The Downtown Los Angeles residential building boom -- fueled in part by an easing of parking, zoning and seismic safety rules in 1999 -- may have preceded the influx of services and the wholesale gentrification of neighborhoods that would make the area livable to the residents.
With a huge homeless population, lack of green space -- and not a Whole Foods in sight-- Downtown urban pioneers ventured into a transitioning neighborhood that is still quite rough around the edges -- although it may be viewed from the penthouse unit with Brazilian cherry wood floors and Poggenpohl kitchen.
Long-term, the fundamentals are excellent and those buying prime units in the best buildings will likely be rewarded disproportionately in the next housing cycle. With the construction of the Staples Center, Nokia Theater, Disney Concert Hall, the urban core is regaining its cultural luster. Many businesses have established themselves there. And with car-jammed freeways, those who work there will save time and money by living in Downtown Los Angeles. But for now, builders fret and homeowners gnaw their fingernails over a softening local market.
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