The downtown Los Angeles housing market is progressing and has wonderful potential. However, the developers are setting prices (per sq. foot) at a level commensurate with Santa Monica (where you’ll also get a little amenity we call the Pacific Ocean) and Beverly Hills (where you’ll find What’s-Her-Name).
There are about 150 residential projects in the works in downtown right now. That sounds promising, until you listen to what people are saying about that number. For example, a Downtown News editorial qualified an assertion with “no one pretends all 147 projects will make it to market.”
Downtown has a lot of potential, but potential don’t feed the family, pal. Little Gwendolyn has a lot of potential too, but it doesn’t mean I’m going to pay a 10 year-old $5,000 to do my taxes.
The problem is that downtown developers are charging $550-650 per square foot NOW. So, let me get this straight. They want me to take a chance on their project, but they want me to pay them as if downtown were already a thriving destination. Basically, the developers want me to take the gamble FOR them. They’ll go buy another yacht and I’ll sit in my overpriced loft, eating Ramen and hoping the market will turn.
Don’t get me wrong. I love living downtown and I rabidly agree that the area is dripping with potential. Here’s the thing. I am not going to go buy a size 6 dress TODAY just because I bought an exercise tape and have every intention of avoiding Beard Papa.
The reality of downtown NOW:
- Three restaurants stay open over the weekend, on of which is IHOP.
- We have one grocery store (Ralph’s) to service everyone.
- We drive to Pasadena to go to Trader Joe’s or Whole Foods because Ralphs just doesn’t cut it when it comes to organic choices and produce.
- I am asked for fifteen cents six hundred million times each week. After I decline the request, the asker yells and spits at me.
- I dodge every puddle I see because ya never know if it’s pee (it probably is).
- Broadway is ear piercingly loud and aggressive.
- The vehemently promised Grand Avenue AND Park 5th projects are on hold. Nothing else is selling.
Mr. Developer was hesitant to weigh in on my rant. I don’t know. Something about an important morning meeting and 3 am being an inappropriate time to call for quotes. Whatever.
Mr. Developer did explain that people buy in two situations: a rising market or something is undervalued. “Neither situation applies in downtown Los Angeles. As we watch the market correct from overvalued to undervalued [fingers crossed], we are seeing no momentum and everything is still overvalued.” Why would we want to buy in a falling market? “Projects haven’t yet reset prices to reflect the market.”
And then I think he fell asleep because I heard snoring.
By the way, I saw something I wasn’t supposed to see (heehee!), and I can tell you NO ONE is selling much, if anything, in all of downtown. Yet, when you walk into a <50% sold building which has been open for six months, the agent tries to convince you to hurry so you don’t miss out.
What if I do buy and the value of my home goes down? This has happened in all the buildings that are open right now. The suckers living there have already lost about $100K. I know someone who bought in a building that isn’t even open yet and she is already upside down.
Developers are offering to cover some mortgage payments, homeowners association dues and closing costs. They’ll do just about anything to avoid lowering their asking prices. Welp, guess what. None of us can qualify for those insane prices anymore. Actually, current homeowners could probably qualify, but they can’t sell their houses!
Let’s all grab a bite at a downtown eatery (on a weekday before 5pm, of course) and wait for the punk a** developers to come to their senses.
Grand Avenue rendering from Grand Avenue Committee
Yacht photo by re-ality on Flickr
Closed sign photo by squeakymarmot on Flickr
1st building photo by ericrichardson on Flickr
2nd building photo by fredcamino on Flickr
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1 response so far ↓
1 Rambo Goddam // Feb 26, 2008 at 3:59 pm
totallly agree. it’s like these idiots want to convince you it’s the new manhattan, but they aren’t investing in the things that make a pedestrian city a great place to live - namely small restaurants, delis, grocers and shops. american developers are clueless. you can bet your ass though, if you get a loft you will also be getting a parking spot for your suv.
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