So far most of the pricing reductions in the L.A. housing market have been due to lack of easy credit and unaffordable prices, not the economic slowdown. That will be phase 2. Yet it looks like the fall-out from the banking crisis and the slowing economy are having an impact on the L.A. office market, with analysts predicting it to only get worse from here. From a Wall Street Journal story:
...brokers say the property market in and around the city is bracing for even tougher times as budget-conscious companies are looking to trim real-estate costs. Already-declining demand for office space in the Los Angeles region, one of the country's largest office markets, is expected to accelerate, says Whitley Collins, senior managing director of the Los Angeles region brokerage for Jones Lang LaSalle Americas Inc.
He sees a worst-case scenario in which metropolitan area companies over the next 12 months could put as much as 10 million square feet of office space back on the market and rents could decline by as much as 25%. "We're seeing a softening, but we're not nearly seeing the softening we'll see," Mr. Collins says.
