Written by Wendy Bowman
Building resilient communities is high on the agenda at the Urban Land Institute’s (ULI) 2017 Fall Meeting, set for Oct. 23-26 at the Los Angeles Convention Center. The gathering—which unites internationally renowned land-use and urban-development experts for four days of networking and education—will focus on various issues such as housing affordability, gentrification and social equity, technology advancements and demographic shifts, as well as DTLA’s resurgence as a highly sought-after place to live and work.
“ULI’S FALL MEETING IS A MUST-ATTEND EVENT FOR PEOPLE AT ALL STAGES OF THEIR REAL ESTATE CAREERS, AS WELL AS THOSE WHO ARE NOT DIRECTLY INVOLVED IN REAL ESTATE BUT WHOSE WORK AFFECTS OR IS AFFECTED BY REAL ESTATE.”
The event, expected to draw more than 6,500 industry leaders from around the globe, will feature a different focus each day. Among the highlights: tours of some of the metro area’s most innovative developments (Monday, Oct. 23); lessons learned from experts in the real estate industry and beyond (Tuesday, Oct. 24); and industry trends, including what’s next for the residential, hospitality, office, industrial and retail sectors, as well as the impact of driverless transportation technology on all property types (Wednesday, Oct. 25). On Thursday, Oct. 26, real estate “deal day” will feature the chance to explore and initiate development projects and to share best practices in the art of making deals.
Also of note is the impressive lineup of speakers, including NBA basketball legend Earvin “Magic” Johnson, chairman and CEO of the investment conglomerate Magic Johnson Enterprises; Wall Street Journal columnist Peggy Noonan; and globally renowned architect Frank Gehry, designer of L.A.’s Walt Disney Concert Hall.
Findings from ULI and PwC’s Emerging Trends in Real Estate 2018 survey also will be discussed during a general session spotlighting the most favorable markets for investment and development in the coming year. (Last year, L.A. ranked fifth out of more than 75 markets.) “ULI’s Fall Meeting is a must-attend event for people at all stages of their real estate careers, as well as those who are not directly involved in real estate but whose work affects or is affected by real estate,” says Boyd. “There is no better place for sharing knowledge, ideas and lessons learned about creating communities that are resilient, prosperous and livable.”
California home sales tempered in 2014, falling roughly 8.2 percent behind the previous year. But with positive housing indicators and a strengthening economy, experts are predicting a 2015 marked by increased home sales and a better balance between sellers and traditional home buyers.
According to the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) “2015 California Housing Market Forecast,” economists expect a 5.8% increase in existing home sales in 2015, which translates into 402,5000 total units. They further expect median prices to continue upward, with a forecasted 5.2% increase bringing the median home price up to $478,700.
Last year’s sluggish home sales resulted in large part from dramatic increases in home price coupled with depleted market inventory — an environment that caused many investors to exit. Without traditional consumers stepping in to take their place, 20 months of double-digit year-over-year home price growth finally normalized to single digits in 2014.
“Stringent underwriting guidelines and double-digit home price increases over the past two years have significantly impacted housing affordability in California, forcing some buyers to delay their home purchase,” said C.A.R. President Kevin Brown in a press release. “However, [in 2015], home price gains will slow, allowing would-be buyers who have been saving for a down payment to be in a better financial position to make a home purchase.”
C.A.R. expects 30-year mortgage interest rates, which repeatedly defied forecasts last year, to remain at historically low levels despite a slight increase to a year average of 4.5 percent. This bodes well for potential buyers, who Brown wants to remind that 20 percent down is not always required to buy a home.
“There are numerous programs available that allow consumers to buy a home with less down payment, including FHA loans, which lets buyers put down as little as 3.5 percent,” he said.
Looking to economic recovery, last year was the strongest since the recession hit in 2008 and closed out with a 5.6 percent unemployment rate nationwide. Currently hovering around a 7.9% unemployment rate, Los Angeles is is forecast to return to pre-recession employment numbers in the coming year.
Yet even with job growth, low interest rates, and slowing gains in home prices, affordability remains a key issue, particularly in the state’s luxury markets. According to C.A.R.’s Traditional Housing Affordability Index, just 27 percent of households will be able to purchase a median priced home in California based on traditional assumptions. This forecast is 3 percent lower than 2014 projections, and is down significantly from 56 percent in the first quarter of 2012. Much of this is attributable to the fact that household income declined while home prices swelled.
With affordability where it is, the homeownership rate for 18- to 34-year-olds continues to fall as the number of Millennials renting or living with parents continues to rise. Household formation for this same demographic is remarkably slow, contributing to Census data that shows an addition of just 476,000 new households in the 12-month period ending in March 2014. By contrast, the two periods prior had an average of 1.3 million added households. Even in today’s “renter nation,” the C.A.R. 2014 Millennial survey shows that over half of this group places homeownership as an eight or above on a scale of one to ten, where ten is “extremely important.” Roughly the same percentage expects to purchase a home within five years.
“With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015,” concluded C.A.R. Vice President and Chief Economist Leslie Appleton-Young.