Downtown Los Angeles Real Estate Market Report February 2023
REAL ESTATE NEWS — The urban L.A. property sector continues to drop following 5 months of softening market numbers. February this year brought less than half as many listings sold, as properties take about 300% longer to sell compared to the same period in the previous year. Here are the numbers for Feb.:
2022 saw 63 listings sold; average DOM 40; median DOM 14; median price $540,000; average price $834,000; total volume $53 million
2023 only 28 listings sold; average DOM shot up to 55; median DOM up to 46; median price $600,000; average price $666,000; Total volume dropped to under $19 million.
The real estate market in urban Los Angeles is continuing to decline, with February 2023 showing a significant drop in listings sold and properties taking 300% longer to sell compared to the same period in the previous year. In 2022, there were 63 listings sold with an average of 40 days on the market, while in 2023, only 28 listings were sold with an average of 55 days on the market. Median and average prices also increased in 2023. Statistics based on real estate professionals multiple listing service data for DTLA and nearby loft neighborhoods MLS areas 23, 42 and 1375.
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Downtown Los Angeles has been undergoing a transformation into an expensive luxury neighborhood. The Mills Act program can help prospective home buyers find a great deal on amazing lofts. The program provides property tax benefits that represent significant savings on historic homes, which encourages preservation and rehabilitation of these buildings. However, just blocks away from these historic properties, the Skid Row neighborhood is home to an increasing number of homeless individuals living in luxury tent mansions. This blog post will explore both the Mills Act program and the Skid Row tent mansions.
The Mills Act program is an economic incentive program that helps private homeowners, including loft condominium unit owners, in California with the restoration and preservation of qualified historic buildings. For Los Angeles, the program is administered and implemented by the City of Los Angeles. Mills Act contracts are between the property owners and the city and county government granting the tax abatement. The program helps city hall design preservation programs that accommodate Downtown and the entire city’s needs and priorities for rehabilitating its neighborhoods, encouraging seismic safety programs, contributing to affordable housing, promoting heritage tourism, and fostering pride of ownership.
The Mills Act program offers significant property tax relief, which helps defray costs to rehabilitate and maintain the historical and architectural character of Downtown LA properties for at least a ten-year period, which usually gets renewed. The program is especially beneficial for recent buyers of historic properties and for current owners in historic buildings. Participants may realize substantial property tax savings of between 40% and 60% each year for newly improved or purchased older properties. Valuations of Mills Act properties are determined by the Income Approach to Value rather than by the standard Market Approach to Value. The income approach, divided by a capitalization rate, determines the assessed value of the property. In general, the income of an owner-occupied property is based on comparable rents for similar properties in the area, while the income amount on a commercial property is based on actual rent received. As County Assessors are required to assess all properties annually, Mills Act properties may realize slight increases in property taxes each year.
The Mills Act program encourages the preservation of historic properties and is a significant boon for homeowners. However, just blocks away from the luxury lofts, the Skid Row neighborhood is experiencing an increase in the number of homeless individuals living in luxury tent mansions. These tent mansions are a stark contrast to the luxury lofts that the Mills Act program encourages preservation of.
One resident, Stephanie Williams, says she is living her best life on Skid Row. A fashion designer, she sews for the community. Not just sleeping in a tent, she controls a sprawling estate compound of several large, upscale tent-like residences with deluxe features. Her real estate is free for her. Her tent mansion boasts a hardwood floor, a bamboo bed with an upscale mattress and linens, appliances, a full kitchen, and a private hot tub spa. Williams is one of many homeless individuals living in luxury tent mansions in Skid Row.
These tent mansions are not the norm for Skid Row, where homelessness is on the rise, and the living conditions are deplorable. The tent mansions stand in stark contrast to the homeless encampments that have become synonymous with Skid Row. The tent mansions represent an extreme case, where a select few have managed to create a luxurious living space, while many others continue to live in abject poverty. The tent mansions are a result of a new generation of homeless individuals that are living on the streets, many of whom have jobs, savings, and access to resources that allow them to create these luxurious living spaces.
The tent mansions have raised eyebrows among policymakers and advocates who work with the homeless population. While the tent mansions are not illegal, they highlight the stark reality of the homeless crisis in Los Angeles.
Get a free list of Mills Act historic lofts for sale in Los Angeles. Fill out the online form:
