Transformation is occurring in downtown Los Angeles with a number of mega-development projects underway or on the drawing boards. Greenland U.S. Holding Inc. broke ground this year on the first phase of the mega-project named Metropolis. The $1 billion project is a combined residential, retail and hotel urban development. The first phase consists of a 19-story hotel with the capacity for 350 rooms and a 38-story residential tower. Both structures are expected to be completed by 2016. Ongoing residential and commercial developments are expected to bring more workers into the downtown area, which will increase consumer spending.
Housing markets remain tight in Southern California, allowing home owners to continue gaining equity in their homes at a relatively fast pace. Case-Shiller home prices for Los Angeles and San Diego were up 16.8 percent and 18.9 percent, respectively, from a year ago in March. After peaking in 2006, home values in Southern California plummeted by around 42 percent. According to March’s Case-Shiller Home Price Index, single-family houses in Los Angeles still have to gain another 23 percent from current prices to attain their pre-recession peak. So, a recovering housing market remains an integral part of the economic story for Southern California for the next few years.
Southern California labor markets continue to improve. The construction sector grew 8.8 percent from a year ago in April, adding over 28,000 jobs to the area economy. Most sectors showed solid growth while financial activities and government-related industries have been a drag on area labor markets in the first part of 2014. Southern California nonfarm payrolls are expected to increase 2 percent or 150,000 jobs in 2014.
Click here for the complete Southern California Regional Economic Update: SouthernCA 2014Q1.