The real investors are coming back to L.A.
What we've had for the last several years are the speculators. The ones with no money down. Little credit discipline. Big dreams of getting rich quick. Not all but some time flippers who slapdash lipstick on a pig and call it a filet mignon. Some succeeded. For those that didn't, it will absolutely take time thinning out supply through short sales or foreclosures. But those days are here.
I'm seeing multi unit residential properties dropping off their peaks. And as demand for affordable housing still continues, savvy, long term investors are inquiring. And why not when over the last 15 or so years, rents in Los Angeles County have consistently risen on average 3% per year? Look at this nugget from CAR:
"Year-to-year, asking rents for Class A & B apartments in Los Angeles County rose 5.1% from the 4th QTR 2007."
Almost 4% this year according to Commercial Property News:
"The metro areas showing the greatest growth in residential rents are unsurprising: San Francisco (up 14.6 percent, to a median of $1,850 for a two-bedroom apartment), Seattle (up 10.3 percent, to $1,250), New York (up 9.0 percent, to $1,800), Washington (up 4.9 percent, to $1,900), and Los Angeles (up 3.8 percent, to $1.795)."
Add that to the tax benefits of depreciation and long term appreciation, then for the financially prudent investors the clouds are breaking. The rain is gone.
And for us, the ActiveRain continues.
Tomorrow: Service is Joy
;)
Links;)
Tags (Tag Cloud);)
Archives
Indeed, for us, the Active Rain continues. Here in SW Florida, we had the best first quarter in three years. And you are right on target about the speculators vs the investors. We are seeing the same trend here. A recent auction filled the Fort Myers Convention Center with people who had to have a $5000 cashiers check to get in the door. There is pent-up demand, even with our temporarily depressed rentals!
JimG