Zepp, executive director of business and legal affairs at Paramount Pictures' Digital Entertainment division, and his wife, Lucy, an account supervisor for a PR agency, closed on their condominium in a new 10-unit project on North Bronson Avenue in July. They were drawn not only by its proximity to the Paramount Pictures lot on Melrose Avenue but also by its open design and the intimacy offered by a smaller development.
The Zepps, both 30, are among a group of buyers whose first-home purchase is in the increasing stock of small condominium projects, mostly new developments taking the place of older duplexes or single-family homes cropping up in dense urban neighborhoods.
Much of the activity is taking place in Hollywood and West Hollywood, though projects are being built in Culver City, Venice, Century City and other pockets throughout the region. And although units in these smaller condo projects are generally priced higher on a per-square-foot basis than those in apartment-style buildings, the appeal for many first-time home buyers is the ability to buy into a new, more intimate urban development as well as the lower homeowners association dues.
There are no hard data on how rapidly the number of small condo complexes has grown -- firms that track the real estate market generally cut off their research at 10 or 20 units. But there is some evidence of the growing trend. For example, Vigen Onany & Associates Inc., a La Crescenta real estate consulting firm that has put together budgets for homeowners associations at hundreds of condominium projects, claims to handle roughly 50% of that market and has done budgets for more than 1,200 small projects since 2000. That year, the firm said, it put together association budgets for 160 developments of 10 units or fewer in Southern California. Last year, that number reached 650, up from 400 a year earlier. It has since backed off to just 350 projects so far this year.
Although buyers cite location, design and lower monthly costs as primary factors in choosing smaller condo developments over single-family homes or units in high-rises, as entry-level housing goes, many of these projects are pricey. Yet enough buyers are willing to pay the higher initial cost for visually interesting designs to support this market.
"People don't want cookie-cutter," said Richard Papalian, president of Papalian Capital Partners in Pacific Palisades, which is developing projects of four, 10 and 12 units in the Miracle Mile and West Hollywood.
"When you start to have a large open space and contemporary feel, it's more expensive to build," he said. "It's not, 'How many bedrooms and baths can I cram into so many square feet?' "
The Zepps paid "in the mid- to high-$800,000" range, roughly $460 per square foot, for their 1,850-square-foot unit in the building developed by Hollywood-based Urban Environments.
By comparison, DataQuick Information Services, which tracks residential real estate trends, reported a median price per square foot of $367 for a condo in Los Angeles County in October. There is no independent tracking of sales in projects of 10 units and fewer.
One offset to the higher per-square-foot price can be lower homeowners association dues. Because smaller projects generally don't have pools, gyms or full-time front-desk or maintenance staff, monthly dues to cover taxes, insurance, water and gardening bills can be one-third of those at a larger complex.
"One appeal is dues of $150 a month," said Tony Myers, an agent at Re/Max All Cities-Brentwood, who has sold condos in small developments. "Some people like to keep the . . . dues low and have special assessments" when a capital expenditure is needed, he said.
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source: latimes.com
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