Forces Behind Price Boosts
Coincident with the start of the traditional family moving period--from May to Labor Day--are warnings from many quarters of higher home prices and costlier commercial rentals.
Camp-outs followed by sell-outs at sales offices of new tracts, just about anywhere you care to mention in the Southland, are sending clear signals.
Locally, home builders feel the pinch of the slow-growth mode, planning their projects wherever allowed and hoping to get in under the newly imposed wire, which curbs growth by limiting sewer connections. The decree by the Los Angeles City Council is part of a three-year water conservation/sewer expansion plan.
When there is such an exhibited desire and demand for housing, the price will go up. If the quantity is being limited, it’s a sure bet that the price tag will shoot even higher. It’s happening in such diverse and active areas as Agoura, Rancho Cucamonga, Pasadena and Corona.
The number of families throughout the nation unable to buy “decent and affordable” homes is growing at an alarming rate, the recently issued study, “The State of the Nation’s Housing,” declares. The higher cost of housing in California compounds the issue.
The report, sponsored by the Ford Foundation and compiled by the Joint Center for Housing Studies at Harvard University, sums it up this way:
“This report paints a picture of America clearly divided between housing ‘haves’ and ‘have-nots.’ ”
In commercial real estate, the demand factors apply, although you don’t have leasing agents camping out--yet.
“The news for building owners who have prime real estate or those who have undeveloped land with vested entitlements is that it is becoming more prime,” says Jay Carnahan, Transpacific Development Co.'s senior vice president for marketing.
“If you have less product and the same or more demand, the rents will go up; if you have a building or vacant land with vested entitlements, and property around you is under Proposition U, your property is now worth more,” he adds. “The market is starting to tighten up.”
All this foreboding suggests some rough prime times ahead.