Across United States urban markets, we are seeing an influx of both local and global buyers who are purchasing residences as a “safe haven” for their financial portfolio. These buyers are looking at homes as “safe deposit boxes with a view,” and they are attracted by values that, in most markets, are still below the peak pricing we observed prior to the Great Recession.
A great number of our clients consider real estate in the United States a hedge against every other market. They see real estate as a hedge against inflation, against the commodities markets, and a safe haven from international political risk and volatile economic environments. Condominiums, in particular, are of great interest to these buyers, since maintenance of that type of home is largely handled by the Homeowners’ Association.
Downtown L.A. is the epicenter of the city’s metropolitan infrastructure, and numerous major developments underway or on the books will increase this role. These include The Broad Contemporary Art Museum, the Downtown Streetcar, a complete renovation and repositioning of Macy’s Plaza, the new 70-story Wilshire Grand Hotel, expansion of the Los Angeles Convention Center, and, of course, the highly anticipated Farmer’s Field football stadium, to name just a few. As the only L.A. property to offer five-star hotel services, coupled with panoramic city views from all Residences, The Ritz-Carlton Residences at L.A. LIVE represents a spectacular opportunity to partake in Downtown L.A.’s fast-moving renaissance.
The demand for prime property is intensified by limited inventory in key neighborhoods. Downtown Los Angeles currently has just 74 condominiums available, and, although there are several new projects under development, almost all new construction is planned for rental residences. With 526 sales in 2012, less than two months of supply are currently available downtown, and, with a pipeline of less than 100 for-sale residences, constraints on supply will only intensify.
With 98 sales for a total of $127 million sold last year, The Ritz-Carlton Residences L.A. LIVE was the most successful new condominium property in Southern California in 2012. The property achieved an average price 226% above the local downtown market. Consequently, primary residents, second-home owners, and investors — who have all enjoyed solid returns on their investment — have flocked to The Residences, and now more than 80% of the building’s 224 Residences have been sold.
L.A.’s downtown population is expected to grow by 18% over the next three years, so demand is expected to grow commensurately. We believe that all these factors make this is a great opportunity (and time) to buy and own at Southern California’s finest address.
The above article originally appeared in a ‘Special Market Report’ for AllAccessLiving.com