What's next for L.A. residential real estate?

Want to get an idea of how MetroIntelligence Real Estate advisors sees the past and future of L.A. residential real estate? As part of our ongoing association with Beacon Economics, we've been writing the real estate sections for their conference books. Here are the bullet points summarizing our thoughts for the coming year and beyond:

• Falling home prices in Los Angeles County have made them exponentially more affordable, with 37% of households able to buy the median-priced home at current interest rates, up from just 2% to 3% during the last half of 2005 through all of 2007.
• Although the S&P/Case-Shiller Index has shown small increases of home prices in recent quarters, those rises could be short-lived as interest rates rise and support by the federal government in the form of tax credits expire.
• A combination of state tax credits favoring new homes as well as cost cutting by home builders has helped new home sales rebound by 66% since the trough in the first quarter of 2009; yet since prices took longer to crest during the boom, they're still falling slightly even after declining by 24% since peaking at nearly $525,000 in mid 2007.
• Due to price declines of 36% over the past two years year, sales of existing homes - of which about 35% are foreclosures - rose by 75% during the same time period; between the third and fourth quarters of 2009, both sales and prices managed to rise by just over 6%.
• Due to price declines of 24% over the past two years, sales of existing condominiums rose by 110% during the same time period; between the third and fourth quarters of 2009, condo sales continued to rise by 19% even as prices began to rebound by a small yet positive 1.4%.
• Due to larger economic issues, apartments remain under considerable pressure, with vacancy rates rising by 50% over the past two years to 7.5% and forcing rents down by 8% during the same time period to $1,614 per month, which are projected to fall by another 6.7% by the end of 2010.
• Although the pace of new foreclosures did temporarily dipped due to various moratoria throughout most of 2009, they did began to rise again by nearly 7% between the third and fourth quarters of 2009, and more recent indications show rises in loan defaults between February and March of 2010.

To read the entire section, click here to download in a .pdf format.