Despite a decline in real estate prices throughout the county and the country, home values on the Westside remain strong, according to real estate experts who spoke at the Westside Economic Collaborative’s 6th Annual Westside Economic Summit.
Betty Graham, president and COO of Coldwell Banker’s Greater Los Angeles Company, emphasized, “Los Angeles Westside residential real estate is not behaving like the headline numbers” where sales are down 20 to 30 percent, often because of the collapse of sub-prime mortgages. In fact, according to the Combined LA/Westside Multiple Listing Service, over the last 12 months Westside residential sales are only down 7.1 percent. Home and condo prices have increased by 8.3 percent since the third quarter of last year, to an average sales price of $1,118,000.
The apartment market is no different, according to Marcus & Millichap’s Regional Manager, Justin White. “Solid employment and household growth, along with low housing affordability, are expected to continue support strong demand for rental housing and keep vacancy rates low on the Westside,” said White.
When it comes to Westside office space, there has been unprecedented growth in rents over the last two years, according to Grubb and Ellis’ executive vice president of transaction services, Neil Resnick. In Santa Monica, there has been a 36.2 percent increase in office rents from the third quarter of last year to this year. However, the biggest escalation in Westside rents occurred in Westwood, where rents are now 78.2 percent higher this quarter than last year. Resnick also noted that new large commercial developments in Santa Monica, including 2nd Street at Colorado, Lantana East, and Lantana South, as well as Corporate Pointe in Culver City, will be soon be leasing space. However, the office vacancy rate is expected to remain between seven and nine percent.
At the November 2 event held at the Skirball Cultural Center, Sachse Real Estate President Ed Sachse noted, “Westside retail has been riding the big wave of economic growth and increased consumer spending over the last five years.” The hottest retail streets are Robertson, Melrose, and Rodeo Drive. Sachse is forecasting that Third Street Promenade rents, which are currently $18 – $20 per square foot, will be escalating to $20 – $25 in 2008, while rents on Montana Avenue that are currently $7 – $8 per square foot will be increasing to $8 – $9. He also noted that the redevelopment of Santa Monica’s Civic Center and the development of high-end apartments “along Main Street’s northern end” would mean increasing retail rents on Main Street.
The Westside Economic Collaborative represents Westside businesses, governments, and residents from the cities of Beverly Hills, Culver City, Los Angeles, Malibu, Santa Monica, and West Hollywood. Its mission is to “strengthen the local economy by promoting local initiatives, fostering the development of skilled workforce, and building first-rate, sustainable neighborhoods.”