In urban L.A., developers are building trendy homes on tiny lots – latimes.com.

Richard Florida in this article argues that tech companies are moving back into the City.  His statistics shows the San Francisco-Oakland metropolitan surpassing the Silicon Valley as the number one location for venture capital investment in 2012

America’s Leading Metros for Venture Capital – Richard Florida – The Atlantic Cities.

Jones Lang LaSalle shows that over the last 20 years, the Los Angeles Westside had much more volatile rents than Downtown Los Angeles.  JLL claims that the Westside has startup tenants, while Downtown Los Angeles has more established tenants.  The gap between the two widens in booms and narrows in busts.  A 30% spread of Westside rents over Downtown rents predicts recession, according to JLL.  You can enlarge the chart by clicking on it.

Developers are starting construction of a new retain center that will increase the restaurant selection near Washington and National, close to ( but no so easy a walk) to the Hayden Tract.  The Hayden Tract is a popular creative office district in Culver City.  You can read more of about this development n the article below.

Chef Michael White and Blue Bottle Coffee Confirmed For Platform, a One-Of-A-Kind Center at Hayden Tract – Vital Updates – Eater LA.

Economist Robert Shiller conceded Tuesday, June 25, 2013, on Bloomberg News that its a good time to be a flipper and that housing prices will probably rise for the next year.  However, he does not think the rise is prices is a long run trend.  Rather, he sees it as a short term phenomenon that cannot be compared to the long run up in prices that began in 1998.

Just to put the recent rise in the 30 year mortgage to 4.1% into perspective–it is still at a 100 year low except for recent times.

Snapchat Offices

Snapchat just snapped up $80 million of venture capital funding on a $800 million dollar valuation.  Snapchat is a 10 employee firm located in a 2,600 square foot bungalow house at 523 Ocean Front Walk, Venice.  This house was previously rented to for retail stores looking to tap into the Venice boardwalk trendy retail scene.    This office location is right out central casting for a Los Angeles startup.  It is what the world would want to believe where every startup in Los Angeles works.  However, as most commercial real estate people knows–this is an oddity.  However, it may attract some startups  to Los Angeles instead of other competitive locations, when a startup can move not only to a beach house in Venice but also achieve some level of success.

Snapchat headquarters on Venice Beach

Why Snapchat’s rumored funding raises the high stakes for LA’s startup ecosystem | PandoDaily.

One of the only opportunities to buy homes for rent may be coming to an end.  HIstorically low interest rates, a firm rental market, and a collapse in home prices, allowed investors to buy single family homes not only below fair value but also at cap rates that were as good or better than those available in multifamily properties.  In the last year, prices in many of the best  markets have increased significantly.  The increased supply of rental homes has caused rents for rental homes to stagnate.  Now interest rates are on the rise.  Already in Los Angeles, the ability to buy rental homes at apartment cap rates is gone.  Other areas of the country may be in the 7th inning.  Soon  private equity and investors will start their exit from this value play.  That does not mean that homes sales and home prices will stop rising.  The article below reviews that discussion.

Historic Home Buying Opportunity Ending – Business Insider.

The Los Angeles Time article below discusses the current movement of young people back into the City as renters in smaller living spaces.  The article argues that Millennials are burdened by student debt and the memory of the housing collapse and therefore more likely than past generations to remain renters versus home buyers.  Many academics claim a movement of  Millennials to urban areas.  A 2011 survey for the National Assn. of Realtors showed that — despite headlines about the new urban-ism — fewer than 20% of adults prefer to live in cities, while twice that percentage still favor single-family homes in the suburbs.

More Millennials than ever before are moving to the cities and renting.  As they grow older and start families, they may be more likely to buy homes and move to suburbs for better schools. As confidence is restored and housing prices recover–Millennials will desire to own versus rent.  But renting and urban living will probably be more accepted by the Millennial generation than  several of the previous generations before them,  Read the full article below.  .

Are millennials a window of opportunity or a closed door for home builders? – Los Angeles Times.