LOS ANGELES, CA - As the latest housing market statistics continue to be released, economists affiliated with the USC Lusk Center for Real Estate are available to discuss how shifts in home prices and total home sales in California are paving the way for changes in housing. According to the Lusk Center economists, California has become ground zero when it comes to developers' ability to accommodate changing market conditions and lay the groundwork for nationwide movements. Here are some of the topics the economists can address:
Downtowns are being recast: In 5 to 10 years you will see urban cores with greater housing density and more affordable units. The limited supply of land and stringent entitlement requirements in markets such as California have pushed up development costs. In response, developers are shifting towards high-density projects so the project can get financed.
Big back yards are giving way to city balconies: People in their 20s and 30s are choosing more affordable downtown living in high rises that are close to their jobs and exciting cultural centers. They are marrying later and putting off child rearing so there's no pressing need to move to a big house in the suburbs. Single professionals like the city life.
The cooling market is cooling spending jets: The pace of consumer spending will slow as the housing market recedes from its recent highs, according to the preliminary findings of a study conducted by the USC Lusk Center economists. Mortgage refinance activity had dropped sharply in recent years. There is every expectation that it will continue to drop leading to a downturn in consumer spending on discretionary items including foreign vacations, luxury furnishings and entertainment.
Apartments have gained in popularity as investors cool towards housing: While single-family markets cool in the western states, apartment markets are warming up. Apartment rents increased 7 to 8% in 2005, and will continue to rise this year. Investors are shifting from buying and renting condominiums to investing in rental apartments as higher home prices are keeping potential buyers in the rental market.