"Not Paying Some A**hole's Mortgage"

I ask all my buyer clients why they've decided to buy. A client of mine who just bought a small house in NELA had told me it was because he was sick of paying rent to a Landlord who was a piece of work. After the relationship had continued to get worse and his non-rent-control house increased to $3200/mo, my client decided that was it. No more paying someone else's mortgage.

He ended up buying a house where his PITI (principal, interest, taxes & insurance) equated to about $3350/mo. For $150 more per month, he is now paying himself to own a place in which he can paint, remodel, add onto, landscape, and park 24/7. 

With prices what they are currently, it's difficult to own for cheaper than you rent. We aren't in 2011 anymore. But sometimes the peace of mind and pride of ownership is worth every penny. 

Plus he gets to write off a mortgage interest and property taxes, and rent out the detached studio as an AirBnb whenever he wants. And he's still close enough to the neighborhoods he frequents, which are DTLA, Pasadena Glendale & Atwater. 

DTLA is in the Top 5 Most Expensive Places to Rent in Los Angeles County

According to Zumper, DTLA has among the highest median rent prices for 1 bedrooms, even topping Beverly Hills and Bel Air. From highest average prices:

1. Santa Monica -$3160
2. Ocean Park - $2700
3. Venice - $2560
4. Marina de Rey - $2520
5. DTLA - $2410

Those looking into investment properties should be looking into DTLA. And did I mention no rent control as well?

Number of Renters Continue to Rise

According to a new report by New York University’s Furman Center, there has been an increase in renters around the country. "For many, slow income growth and a lack of savings are the reason for renting over buying even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country. 'As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,' Ingrid Gould Ellen, the Furman Center’s faculty director."

It’s a renter’s world out there.
Major U.S. cities are seeing an uptick in the amount of renters compared to homeowners, according to a new report by New York University’s Furman Center and Capital One.
Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
Rents grew faster than inflation in all of the 11 largest metro areas in the country, except for Dallas and Houston where rates remained flat, according to the report. Washington D.C. saw the biggest rent increase, with a 21 percent jump in median rent.
Philadelphia had the lowest percentage of renters in 2013, with 44 percent. Across the country, 36 percent of households are being rented, while 64 percent were owner-occupied. Developers and economists expect that the trend of renting over owning will continue. [WSJ] — Claire Moses 
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

It’s a renter’s world out there.
Major U.S. cities are seeing an uptick in the amount of renters compared to homeowners, according to a new report by New York University’s Furman Center and Capital One.
Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
Rents grew faster than inflation in all of the 11 largest metro areas in the country, except for Dallas and Houston where rates remained flat, according to the report. Washington D.C. saw the biggest rent increase, with a 21 percent jump in median rent.
Philadelphia had the lowest percentage of renters in 2013, with 44 percent. Across the country, 36 percent of households are being rented, while 64 percent were owner-occupied. Developers and economists expect that the trend of renting over owning will continue. [WSJ] — Claire Moses 
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

It’s a renter’s world out there.
Major U.S. cities are seeing an uptick in the amount of renters compared to homeowners, according to a new report by New York University’s Furman Center and Capital One.
Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
Rents grew faster than inflation in all of the 11 largest metro areas in the country, except for Dallas and Houston where rates remained flat, according to the report. Washington D.C. saw the biggest rent increase, with a 21 percent jump in median rent.
Philadelphia had the lowest percentage of renters in 2013, with 44 percent. Across the country, 36 percent of households are being rented, while 64 percent were owner-occupied. Developers and economists expect that the trend of renting over owning will continue. [WSJ] — Claire Moses 
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

It’s a renter’s world out there.
Major U.S. cities are seeing an uptick in the amount of renters compared to homeowners, according to a new report by New York University’s Furman Center and Capital One.
Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
Rents grew faster than inflation in all of the 11 largest metro areas in the country, except for Dallas and Houston where rates remained flat, according to the report. Washington D.C. saw the biggest rent increase, with a 21 percent jump in median rent.
Philadelphia had the lowest percentage of renters in 2013, with 44 percent. Across the country, 36 percent of households are being rented, while 64 percent were owner-occupied. Developers and economists expect that the trend of renting over owning will continue. [WSJ] — Claire Moses 
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpufv

It’s a renter’s world out there.
Major U.S. cities are seeing an uptick in the amount of renters compared to homeowners, according to a new report by New York University’s Furman Center and Capital One.
Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
Rents grew faster than inflation in all of the 11 largest metro areas in the country, except for Dallas and Houston where rates remained flat, according to the report. Washington D.C. saw the biggest rent increase, with a 21 percent jump in median rent.
Philadelphia had the lowest percentage of renters in 2013, with 44 percent. Across the country, 36 percent of households are being rented, while 64 percent were owner-occupied. Developers and economists expect that the trend of renting over owning will continue. [WSJ] — Claire Moses 
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

Even lower-density cities are seeing an uptick in renters, according to the report cited by the Wall Street Journal.
New York City no longer has the largest share of renters among the country’s other big cities, the report found. Miami — where 65 percent of the population are renters — has surpassed New York. The percentage of renters in New York has been dropping, with 71 percent in 1970 and 64 percent in 2013.
For many, slow income growth and a lack of savings are the reasons for renting over buying, according to the newspaper, even though mortgage rates are still at a historic low. As a result, the demand for rental apartments is up in many cities, which in turn is pushing up housing costs across the country.
“As the number of renters grow, if the supply of rental housing does not keep up, as it has not in most of these cities, then vacancy rates will fall, rents will rise, and more renters will struggle with the costs of housing,” Ingrid Gould Ellen, the Furman Center’s faculty director, told the newspaper.
- See more at: http://therealdeal.com/blog/2015/02/09/majority-of-population-in-big-u-s-cities-rents-report/#sthash.0DBFKEWC.dpuf

Buy Low, Sell High

It seemed that not long ago, shortsales and foreclosures were the norm. Those who borrowed badly lost out, but DTLA fans made a killing buying up properties that were oftentimes half of what the previous owners had paid. Now that we're pretty much back at the height, many happy owners are following the old investing adage: buy low and sell high. The really savvy owners are buying low, selling high, and then buying two. Recent client scenario: he sold high, and is using his sizable net profit for downpayments on two properties because borrowing is so cheap right now. He will live in one and rent out the other. And guess what? Because rents are so high, the tenant will end up paying for my client's mortgage, with some extra cash flow to boot. The plan is to hold onto both properties for the next 6-10 years, then sell one off when the value goes up. Seriously, everyone should be doing this.

What about those who didn't buy low? You do the other savvy thing: buy and hold. Then in 6-10 years, when the skyline of downtown has become littered with luxury condos and double the amount of restaurants and retail, then you can sell and upgrade or buy some vacant land to sit on :)

2015 Median Prices Expected to Rise 5.8%

According to the California Association of Realtors (C.A.R.), the housing median price is anticipated to increase by 5.8% in 2015. From 2013 to 2014, there was an increase of 11.8%, and DTLA was overall higher than the state average.

Median Price from Sep 2013 vs Sept 2014

Stats are out: The median home price in California was $428,290 back in September 2013. The median home price in September 2014 was $460,940. That's a 7.6 percent increase. And need I say again that interest rates are at an unprecedented low?

DTLA Real Estate Climate as of June 2014

Lots of buyers who've decided they want to buy in DTLA are asking me key questions before they take the leap. As a homeowner and investor in downtown myself, here are my answers to these questions:

"Am I buying at the height?" 
Understandable question since prices have been steadily climbing to near-2007-peak prices--and in some super-desirable buildings (think Eastern Columbia, Biscuit Company Lofts, Barker Block)--beyond peak prices. I always tell my clients the same thing: "This isn't the height." What's so sublimely different now than what happened back in the crash of 2009 is the inventory is super low in DTLA. Supply and demand always affect prices, and there is a great demand for condo and loft housing right now yet the pickings are slim. Buildings that were once slated to be condos (e.g. The Chapman, The Roosevelt, Apex, etc.) became rental-only buildings because of the crash--and the owners of these buildings are happy to just rake in the continuously increasing rents. Most of the new developments such as One Santa Fe in the Arts District, 8th & Hope near South Park, and Ava in Little Tokyo for example, are all rentals. It's no wonder the newest phase of Barker Block is nearly sold out with only 7 units left as of today.

"Is there a bubble that will burst?"
Two reasons the climate is different from that of the 2007-2009. First, the loose lending practices that dominated the height of the market are now gone. It's been a lot more difficult for buyers to get qualified for a loan and many lenders are requiring a larger down, the upside being that this has helped buyers have instant equity as soon as they've purchased. While this means some buyers who have little savings for a downpayment or bad credit might experience hurdle and blocks, those who can qualify for a loan will be buying  what they can actually afford, and this should help prevent short sales and foreclosures. Secondly, the the investment happening in DTLA right now is from businesses, NOT just homebuyers and residential developers. Back in the bubble days, a bunch of buyers/investors scrambled to buy a condo due to speculation, but business investment was pretty much non-existent (Except for good old Ralphs and Cedd Moses' bars such as Seven Grand and The Golden Gopher). Now, there are more developments and new businesses that have and will create jobs, such as The Bloc, Clean Technology Incubator, Gensler Architects, One Santa Fe, The Ace Hotel, The JW Marriott, The Residence Inn, the upcoming Case Hotel, Arts District "Mall", Urban Radish, 7th & Fig. And this is just the tip of the iceberg.

"Is all this building around DTLA going to affect my purchase?"
Depends on what you're buying to do. If you're planning on living in your home, then you've got it made. Enjoy the rise in values as DTLA continues to revitalize. If you're buying to invest and rent out, this gets more tricky because in the near future, beginning this Fall, there will be an influx of new rental-only buildings. (Think Ava Little Tokyo, Olive & 9th, 8the & Hope, Avant, One Santa Fe). You'll have competition with these new developments that will attract tenants who want the newest place to live. That said, some condo buildings will always be in demand by renters because of their uniqueness and location, such as The Residences at The Ritz Carlton, Barker Block, Molino Lofts, Biscuit Lofts, Eastern Columbia, The Rowan, to name a few.