Navigating the real estate market in the current economy can be a daunting task for seasoned real estate professionals yet alone the average American. Making prudent decisions in the current market can often mean the difference between what is fiscally responsible or what is financially ruinous, and distinguishing between the two is not always apparent.
When the stock market gains and loses 300 + points from day to day, uncertainty abounds in virtually every quadrant. Luckily, academics are studying the markets to make sense of the chaos. According to the USC Casden Forecast: 2011 Multifamily Market Report, vacancy rates and rents are projected to continue to decline in 2011. The report sites the fact that jobs created in 2010 and 2011 will allow those forced into consolidated living arrangements to secure non-shared housing units.
According to the report the creation of new housing in Los Angeles will continue to decline with just over 2000 units created in 2011. The report noted that in Los Angeles, “Only 221 of these units are part of condominium repositioning projects.” It appears Americans are not in the buying mood; and developers have taken note. The report estimates that 2000 new housing/real estate projects were put on hold under market constraints.
The Los Angeles Department of Housing reports that vacancy rates for multifamily units in Los Angeles were relatively high at 7 percent in 1998 but continued to decline into 2000. Those rates remained steady until about mid 2008 when vacancy rates began to increase but then showed signs of decline. That decline has continued and is confirmed by the 2011 Casden Report. Additionally the the majority of family dwellings currently under construction in Los Angeles are multifamily units, and not single family housing or condominiums. If you are in the market to buy a condominium you may find that you are definitely in a “buyer’s market,” since most Americans tend to be straying away from the traditional concept of ownership and relying more heavily on rental options instead.