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Wednesday, September 06, 2006

 

Another Developer Decides L.A. Too Big A Risk


Yet another indicator of a slowdown in the Los Angeles housing market was reported today by the Los Angeles Times. The LA housing market, and all those adjectives that came with it the past few years (soaring, booming, skyrocketing, etc...) now appears analogous to a pop fly approaching its apex, which raises more questions than it answers. What now? Do prices drop? Do they level off and float? And what about the concerns expressed by many people about the condo conversions that have pulled so many rent-stabilized apartments out of LA's housing pool? Might a slowdown be good news in that regard? No one has the answer yet, but situations like this one seem to offer at least enough fodder for a hearty debate:
Suburban home builder Standard Pacific Corp. has opted out of an agreement to buy a major Los Angeles condominium project, another sign that downtown's once-sizzling condo market might be losing steam.

The condo development, adjacent to Union Station, was behind schedule and was having trouble attracting buyers for the units priced in the $600,000 range. Instead of being sold as condos, the 272 units will be leased as apartments beginning today by the project's owner, Lincoln Property Co. of Dallas.

"The delays of getting buyers into the building, combined with the market softening, all conspired to cause us to reach the conclusion we did," Steven Ross, director of planning for Standard Pacific's Los Angeles division, said Tuesday.

Although prices in the downtown market — one of the last in the Southland to heat up and stay hot — continue to rise year over year, sales have slowed considerably while the supply of units continues to grow, creating what some analysts say is a condo glut.
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