Research Briefs

After an international bidding war, a Westside mansion often described as a French palace has changed hands for $102 million, making it the most expensive residential sale ever recorded in Southern California...

Adding to the competition for such trophy estates is the fact that the Los Angeles-area housing supply is constrained by its geography, said economist Gary Painter, director of research for USC's Lusk Center for Real Estate. In this built-out environment there are few estates with acreage from which to choose.

The demand has much to do with the growth of Downtown as a cultural center, featuring amenities and nightlife that rival those of any neighborhood in Los Angeles.

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. 

Many market watchers see stable prices, but no growth. Homes sell quickly, but there aren't many to choose from. And buyers are still struggling with high prices and an uptick in interest rates.

"We've basically run out of houses that people can afford," said Richard Green, director of USC's Lusk Center for Real Estate. "Three or four years ago, if you were a family making $60,000 there was plenty of stuff you could buy in Southern California. That's gone."

Hollywood began a comeback this century and has attracted billions of dollars of investment in housing, hotels, shops and entertainment. The neighborhood is enticing to a younger generation of entertainment professionals unperturbed by its seedy recent past, real estate expert Richard Green said.

"It was intimidating 30 years ago, like Times Square," said Green, director of the USC Lusk Center for Real Estate. "It's much nicer now. Hollywood is gentrifying very rapidly."

“For the past few years, it has sort of been a parlor game in L.A. real estate,” said Jenny Schuetz, a real estate professor at the University of Southern California. “Are we finally going to get an NFL team? And where?”

There are at least four other L.A. sites that have been proposed for a new stadium.

"Our keynote speaker, USC Lusk Center director Richard Green, discussed the connection between housing and the economy. If home builders delivered 1.5 million houses per year, the economy would be much steadier than it is, because housing leads the business cycle of life. Don't worry about a collapse in demand: By the time the Boomers retire, the Millennials will be entering their home-buying years.