...According to Dr. Delores Conway, director of the Casden Real Estate Economics Forecast at USC, the scale of the downturn is virtually unprecedented.
"Labor costs have come down, and definitely the price of materials like copper, steel and stainless steel are down, but the financing is the problem," Conway says. "We've seen a lot of planned projects being put on hold simply because the market has changed. Unemployment is rising: It's 9.3% in Los Angeles, and 8.4% for the state.
"In the office market, this is the first year I've seen real pressure on demand. There's declining demand in every sector, so every submarket is declining." Conway describes a construction industry under siege by cascading forces, all beginning with the bursting of the housing bubble. Declining home values continue to drive down new home construction, while declining personal wealth continues to slow consumer spending and drags down commercial construction...