The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: John Vosilla who wrote (30136)	4/26/2005 4:02:32 AM
From: Elroy Jetson	Read Replies (3) of 306849

I'm not so sure I agree with this comment from what I see in Los Angeles. A big shortage in older existing product, targeting the middle and lower end, in the urban fast growing land restricted bubble markets. If my gardener owns seven "rental" homes, I sure they're not better than middle and lower end homes. I think the largest horde of "investor" homes are located in the same city they live in. If 1990 is any guide almost all of these "investors" will disgorge these homes. As for new construction in land-locked Los Angeles • • • you cannot imagine the huge number of large lots which are currently being built into condos and apartments. Two single family homes, a group of bungalows, or one-story apartment buildings are torn down and becoming four story residential buildings about evenly split between condos and apartment buildings. When you drive through most residential neighborhoods with compatible zoning, you see one of these sites under construction every other city block - sometimes two or three on one block. This began two years ago and has picked up volume exponentially. Not surprisingly, residential rents from Beverly Hills to Mid-Wilshire have declined roughly 15% over the past two years - and the decline is starting to pick up speed. Drive to communities past Pasadena, like Alhambra, Placentia etc and every other building has a "For Rent" sign on the front with $600 for a one bedroom and $850 for a 2+2 which is a larger decline than 15%. At least in Los Angeles, if only the current projects under construction are completed, there is not going to be a shortage of anything - from luxury large square footage down to multi-family lodging for newly arrived illegal immigrants. .

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