Booming downtown Los Angeles can expect to see some changes in the coming years with an increase of residents looking to the area for living instead of work. To many, this comes as no surprise as the area has shown significant increase in living interest over the past years, but some suggest that the current state of the Los Angeles market may also have something to do with the rise in downtown residency.
One theory for the increase of interest in downtown living is the incredible state of the current Los Angeles market. The area is seeing record highs in its housing market with the highest sales seen since the Great Recession. Homeowners report seeing high selling rates and significant increase in home value. Home shoppers are interested in the current low interest rates and promise of higher home values.
Another theory for the increased popularity of downtown Los Angeles is the steady rise of rent rates throughout the Los Angeles area. Studies have shown that Los Angeles residents who rent use almost 48 percent of their income for housing while home owning Los Angeles residents use only around 41 percent. As a result, more and more residents are finding greater interest in home ownership rather than renting.
The combination of increase in home value and rising interest rates as well as the cultural relevance and historic value of the area peaks the interest of Los Angeles residents and those looking to move to Los Angeles. Residents and home shoppers interested in living in the area may be in luck, as there are an impressive amount of empty buildings due to the change in the area’s lifestyle from commercial to residential. While the interest in downtown Los Angeles’s residential properties continues to increase, the area is seeing the one of the nation’s highest vacancy rates for commercial buildings. Due to changes in desired workplace environments, creative freedom reigns over the formerly desired fortress-like offices.
Alexis Breitkreutz is an analyst for New Home Source.