Westside experts weigh in with economic and housing forecasts for the new year
It has become a January tradition that The Argonaut asks local experts to predict trends that will dominate their respective fields for the coming year. For 2019 we offer one of our own: The biggest theme in local news will be the economy — more specifically how our neighborhoods respond to housing prices that are squeezing out the middle class, small businesses struggling to compete among an upsurge in global chains, and a homelessness crisis so pervasive that its physical and psychological consequences cannot be ignored. 2019 isn’t just a question of what will happen, but what will happen to our community character and identity along the way.
Will California Pass New Laws to Make Housing More Affordable?
By Assemblymember Richard Bloom (D-Santa Monica)
Over the past several years we have passed numerous measures to address California’s housing crisis, including reforms to local housing planning and significant investments in affordable housing projects. I am proud to have several of my own bills included among these recent accomplishments, including a measure that streamlined the “Granny Flat” permitting process and led to the approval of thousands of new units in Los Angeles and beyond. Our work, however, is not done. Californians should expect new legislation on housing affordability
One of the most significant challenges our cities and counties currently face is the shortage of funding for affordable housing construction, which can partially be attributed to the dissolution of redevelopment agencies. I experienced this challenge firsthand as mayor of Santa Monica. I am pleased to report that Assemblymember David Chiu of San Francisco and I are co-authoring AB 11, a bill that will create new funding sources for affordable housing and infrastructure projects. Our local governments and community partners are asking for this, and we are determined to deliver.
Many of the bills we have passed in recent years will help improve housing affordability in the long run by reducing the barriers to housing construction and alleviating the crippling housing shortage. However, the impacts of these measures will take years to unfold, and in the meantime we must also provide relief to the many Californians who are cost-burdened or at risk of eviction. We cannot do this without meaningful tenant protection legislation. My colleagues and I have introduced several measures to address that issue over the years. Though many have stalled, we must continue to fight for California tenants.
California’s housing crisis has been decades in the making and will take more than a few years to solve, but I am optimistic that we will make significant progress in the coming legislative session.
Now That It’s Built, What’s the Outlook for Playa Vista Real Estate?
By Aris Anagnos Realtor and Global Marketing Agent, eXp Realty
Toward the end of 2018 we started to see the market shift from a strong seller’s market back to a more ordinary housing market. Where once there were very few listings on the market driving up already inflated prices, we now have
a more normal housing inventory in Playa Vista.
Currently there are 36 active listings in Playa Vista. Before August we averaged 12 to 15. I began to notice this shift in mid- to late July, while inventory was still low. Negotiations that used to take us 10 to 15 days, if your home was priced correctly to start a bidding war and drive up the price, now took closer to 30 days. And by the start of August the amount of condos for sale in Playa Vista went from eight in the beginning of July up to 20!
How does this impact property values in Playa Vista? If your property is in good condition, you should be able to sell for a great price — but it will take longer than in years past, and if you aren’t realistic about the price it won’t sell. While there are now more homes available and more opportunity for homebuyers in Playa Vista, we are very insulated and properties should continue to appreciate (albeit more slowly) due to the area’s popularity, location, employment opportunities and thriving community.
This is not true in many other communities. As inventory has gone up we are seeing home prices fall, but due to the high rate of employment around Playa Vista the area continues to thrive. Last year 18 single-family homes sold in Playa Vista, with an average price of $2,433,900 per property and $758 per square foot; meanwhile there were 100 condo sales, averaging $1,167,001 per property and $738 per square foot. I believe this year’s average sales prices in Playa Vista will look very similar, despite the slowdown in sales and cooling off of prices that we’re seeing in other areas.
What Kind of Year Should Brick-and-Mortar Retailers Expect?
By Dr. Velitchka Kaltcheva Professor of Marketing, Loyola Marymount University
Brick-and-mortar retailers are generally doing better than in recent years, with a few notable exceptions of course. Although online retailers still pose serious threats to traditional retailers, there are strategies that can help local businesses compete.
One way is to focus on a niche and cater specifically to customers who demand such products. Retailers large or small can focus on a certain style of clothing or supplies for a specific activity. A fashion retailer might specialize in retro styles characteristic of the 1940s and ’50s and connect directly with customers involved in rockabilly, car culture and other activities with nostalgic aesthetics. A sporting goods store might specialize in “all things mountain” or “all things boat.” Niche retailers typically offer higher-performance, higher-quality merchandise at premium prices.
Brick-and-mortar retailers can also compete with mighty online competitors by pooling resources and creating new value for customers. The alternative strategy to niche retail would be to compete by increasing the scope and scale of the business, thus improving its cost position. To achieve this, brick-and-mortar retailers may consider entering into strategic alliances through long-term cooperation agreements or equity investments. The larger scale of these strategic alliances can be leveraged in negotiating with suppliers and optimizing many aspects of the business. Strategic alliances are also likely to generate synergies that can be leveraged in cross-promotions, media buying and other areas of communications and messaging.
Members of alliances will not only be able to afford shoppers more competitive prices, but also productively employ their brick-and-mortar assets to offer immediacy and convenience that exclusively online retailers are unable to offer. As part of these broader alliances, brick-and-mortar retailers can offer desired services such as “same day delivery,” “order online, pick-up same day in store,” or “return in store for immediate credit.” After all, customers want options and variety.
Next Week’s Expert Predictions:
• Will Homelessness Decrease in Greater Los Angeles?
• Is Now a Good Time to Invest in the Stock Market?
• What will be the Major Themes of the Arts in 2019?