Friday, August 09, 2013

LA Times: The Return of Condo Conversions

by Calculated Risk on 8/09/2013 09:59:00 AM

An interesting story from Cale Ottens at the LA Times: Condo conversions inch up in Los Angeles

Apartment building owners in Los Angeles and throughout California are once again converting to condos, but not at the torrid pace of 2007, when condo conversion peaked before the Great Recession.
Before the last recession, it was common for apartments to convert to condos when the market was hot. But the trend came to a screeching halt when the housing bubble burst.

At the peak in 2007, the city issued 208 permits allowing apartment complexes to be converted. But that number has declined every year since. The city issued a mere 38 permits last year.
The number of condo conversions, however, probably won't get anywhere near the levels they were before the economic downturn, said Chris Foley, a principal at real estate marketing firm Polaris Pacific in San Francisco.

The only conversions Foley said he expects to see throughout the state are the properties originally intended to be condos but turned into apartments when the housing market tanked and condos weren't selling.
Right now it seems like most of the conversions from apartments to condos are buildings originally intended to be condos, but were converted to rental units during the housing bust. So far I haven't seen older apartments being converted to condos as was happening during the bubble.