Experts say that these developers are not being speculative or over-optimistic about the demand for new housing. Many ambitious residential projects were downgraded or cut altogether during the recession, and that sense of caution still lingers with lenders — partly why so few condominiums are being built despite the overall boom, according to Thomas Bohlinger, an executive vice president at brokerage firm CBRE.
Still, the last two years have ushered in a renewed sense of confidence for builders and lenders, and the Downtown boom correlates to both rising rents and costs of home ownership in the city, said Richard Green, director of the University of Southern California’s Lusk Center for Real Estate.
“We have some of the lowest vacancy rates in the country, and Downtown has a lot of parking lots to build on,” Green said. “On the Westside, prices per square foot are very high, which is partly why the attention has shifted. But it’s all a function of the L.A. market improving fundamentally.”