If Prices Are So High, Why Aren't People Selling?

Sure there's a lot of equity out there. Owners can make a killing. Then why are so few owners not selling?

Prices are too high to rent. If they sell, the rents are way higher than their current fixed mortgage.

Prices are too high to buy. If they sell, it's hard to upgrade these days unless you move to a different location. Most people might make a lateral move or even downsize, but it's hard to upgrade.

At the end of the day, it's better to own.

Condos and Lofts Selling Nicely in DTLA, Rentals Softening a Tad

According to The Real Deal, "As Los Angeles grapples with a severe affordable housing crisis, a new study shows condo and loft sales remain strong...Prices in DTLA continued to increase, rising almost 4.5 percent year-over-year to $697 per square foot. That’s a more modest jump than last year, which saw prices rise up by 11 percent."

Rentals, however, are showing a softening, but still not a dip in prices. Competition is fueling this. 

Bitcoin + Real Estate

No, Bitcoin is not a Federally recognized currency in the U.S. (a fail on their part).

Yes, Bitcoin is accepted to purchase real estate. The reason is because the cryptocurrency is transferred to the Seller from the Buyer, so as long as both parties agree, it's ok. However, there are certain fees in escrow (if using an escrow company) that must be paid by "legitimate" currency.

A Frank Lloyd Wright house in Berkeley is accepting Bitcoin.

Buying a condo in DTLA? A house in the Hollywood Hills? You can swing a Bitcoin deal as long as you have your ducks in a row in cold hard Bitcoin, or even if you're financing a portion of the deal with Bitcoin--you just need the right lender.

Sounds Crazy, But Renting More Affordable Than Buying in LA

The rent increases in LA have been unreal. For $2500/mo, you might find a 650sf studio in Downtown without parking.

If you think Renters have it bad, Buyers actually have it worse. The most recent Home Price Index from CoreLogic showed home prices increased 7% from November 2016 to November 2017.

"Renting is now more affordable than buying a home in the nation’s top 14 most populated counties including Los Angeles County, California; Cook County, Chicago area, Illinois; Harris County, Houston area, Texas; Maricopa County, Phoenix area, Arizona; and San Diego County, California."

Rent prices are also continuing to rise, though, so ultimately, it's still more ideal to own and get into a 30-year fixed mortgage rather than dealing with the 4-6% rent rises LA has been experiencing every year. 

Great Article on the [Second] Arrival of DTLA

From Bloomberg
https://www.bloomberg.com/news/articles/2018-01-05/where-to-eat-sleep-and-shop-in-downtown-la

"The emergence of Downtown Los Angeles, dubbed DTLA, is no news flash: The area has been on the rise since the late 1990s. But that was the start of a long uphill climb. By 2009, it had already undergone the transition from bleak badlands to vibrant cultural mecca, thanks to early pioneers like the L.A. Live entertainment complex and the Standard Hotel.  Since then, a slew of new hotels, restaurants, and museums have joined, and the neighborhood is showing no sign of slowing down.

'I don’t think it would be inaccurate to say that 15 years ago, it was an urban wasteland,” said real estate developer Tom Gilmore, referring to DTLA. An architect by trade, Gilmore almost single-handedly spearheaded the inner city’s rejuvenation. He first took note of DTLA’s architectural stock in the early ’90s: The inner city was a ghost town with potential, brimming with abandoned beaux arts and art deco buildings.' 

Gilmore’s strategy? To purchase and convert four old buildings into loft apartments, then add bars and restaurants. The timing couldn’t have been better. Simultaneously, Staples swooped in to build its 21,000-seat arena, and Lillian Disney (Walt’s wife) had lined up Frank Gehry to design a metallic curved concert hall—venues that were sure to draw thousands of visitors.

Those three projects and the Broad Museum have been cornerstones to a $20 billion investment in DTLA—with cash coming not just from Gilmore, but from a handful of forward-looking hoteliers, foreign companies, the city of Los Angeles, and several private sources. 

In the past 15 years, more than 3,500 hotel rooms have been added within the DTLA area, with several notable newcomers arriving in 2017, such as the 889-room InterContinental (now the tallest building on the West Coast, at 73 stories) and the offbeat, $30 million Hotel Figueroa, a redo of a 1926 icon.

The neighborhood’s highest-profile opening yet, the NoMad, is coming this month to the historic Giannini Place building. After standing empty for 17 years, it’ll now have 241 Italian-inspired rooms designed by Jacques Garcia, a library, a rooftop pool, and a restaurant by Daniel Humm and Will Guidara (of New York City’s Eleven Madison Park). A Soho House is reportedly on its way, too, this summer. 

To Gilmore, these are the brightest signs yet of the neighborhood’s arrival. “When a tastemaker brand like the NoMad comes in, you realize that whole block is going to change because of them, and you know that the bump from that is going to be significant,” he said.

Balancing out the big names is Row DTLA, a 30-acre complex of historic buildings that has been overhauled into a creative district: It includes a smart collection of independent retailers, businesses, and restaurants, and draws up-and-coming talent by offering short -to medium-term pop-up leases. That’s what allowed French independent menswear label Bonaparte 13 to open its first permanent store in the U.S. here, after testing the waters.

'They’re carefully curating the stores that come in here with a strong bias toward independent retailers,' said Andy Griffith of A+R, a stalwart furniture company in L.A. that recently opened at Row DTLA. Joining him in the neighborhood are other cult brands that have found standalone spaces. Locally born clothing brand 3.1 Phillip Lim recently opened a concept store in the Arts District, and Korean eyewear brand Gentle Monster opened its second U.S. store wedged between the historic Orpheum and Tower theaters. 

For all its progress, DTLA is far from finished. Gilmore, for one, says the area is only halfway there. There are major projects still under way: the renovation of Pershing Square and the addition of the Regional Connector Rail, part of a $1.7 billion high-speed rail project that will link a trio of lines (it’s expected to be completed in 2021). "