So Long, Suburbia!

There is strong evidence that the wave of the future in real estate and development will take a switch back turn in an entirely different direction during the next decade of recovery and progress. Project Staff and Senior Resident Fellow for the Urban Land Institute, John Mc Ilwain, reports in Housing in America: The Next Decade that we are in for a continued bumpy ride for the next two to three years and cautions against wishful thinking. Though home prices are stabilizing and even beginning to rise in many parts of the nation, home values overall face another ten percent decline while true stabilization is not predicted until 2011 (I suspect that 2011 may even be wishful thinking). The biggest obstacles to recovery continue to be high unemployment rates and toxic mortgages where principal balances are higher than the value of the homes. Mc Ilwain's report also posits that the private market financial system needs to be restored by removing government backed agencies (FHA, Freddie Mac, Fannie Mae, U.S. Treasury, and the Federal Reserve) that are supporting nearly all housing financing in today's climate.

Most interesting, is the report's long term forecast that highlights emerging trends to expect as the recession dissipates and demand for housing returns. Aging baby boomers, Gen Y'ers, and immigrants will create the strongest demand for housing, though home ownership will retreat to levels not seen in twenty years. The rental markets will gain strength while demand for energy efficient, sustainable, urban living environments that provide a 24/7 lifestyle will begin to outpace the desire for suburban utopia.

Despite dire market conditions, we are beginning to see some renewed movement towards predicted urban growth trends here in Hollywood:

Madrone, a hip urban enclave of condos and retail space planned for the corner of La Brea Ave. & Hollywood Blvd. has been standing half finished and abandoned for nearly three years after the original builder filed bankruptcy. Finally, the project sold at a Trustee's Sale to the original equity partner last August, a new construction loan was secured, and hammers are swinging again as of early June. Once completed, the marketing plan for this 180-unit project will offer the units as rentals.

Just down the road on Vine St. and Hollywood Blvd., The Pali House Hotel (sister to Pali House Hotel in West Hollywood) has been salvaged by real estate developer, CIM Group, who purchased the construction loan and picked up the asset at auction after the original builder, Palisades Development, fell victim to pie-in-the-sky aspirations for the 67-key efficiency hotel. Now in presumably more capable hands, CIM Group has a vision of incorporating
the music legacy of the surrounding Capitol Records site into the design & marketing concept for Pali House. As the epicenter of urban development in Hollywood, any and all new growth emerging near the infamous corner of Hollywood Blvd. and Vine St. will be crucial in shaping the overall framework for smart growth in Los Angeles. Stay tuned!

Also, for you nostalgic foodies & bar rats out there, I will be hitting the streets in the upcoming weeks to uncover some of L.A.'s hidden and obscure treasures. I'll be avoiding all the flash-in-the-pan hot spots and instead will be focusing on vintage, old-school cool; where the place reeks of grease, history, and authenticity. I have a few in mind and more yet to be discovered, so please let me know if you have any in mind that are worth noting.

Finally, I am considering a 'just for fun' blog series to highlight the most eligible bachelors in L.A. Real Estate. I already have a candy box full of a few in mind, so drop me a line if you think of anyone you'd be interested in having me interrogate!!

By the way, I sell Real Estate in Los Angeles, so don't hesitate to contact me for any questions regarding the market here in Urban L.A.!