Apartments under construction at Wilshire and Barrington

Construction of a six-story apartment building got underway last week at Wilshire Boulevard and Barrington Avenue in West Los Angeles, one of the area’s major intersections.

The property, formerly anchored by a liquor store and shoe store, was one of the most underutilized sites in West Los Angeles, said Ken Kahan, president of California Landmark, the Los Angeles company building the $35-million complex.

The apartment building called the bw replaces the previous plan for the site, a 28-story condominium building approved in 2004. Condo values and sales fell in the economic downturn, however.

“A high-rise condominium tower does not work in today’s market,” Kahan said.

Set to open in August 2013, the bw will have 78 units expected to rent for $2,200 to $4,000 a month. The design by Los Angeles-based PK Architecture calls for a rooftop garden, modernist lobby and a gym.

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Image: The planned bw apartment complex at Wilshire and Barrington. Credit: California Landmark

Construction of new homes increases, except in West

Construction of single-family U.S. homes appeared to pick up last month, but not in the West.

Single-family homes were started at a rate of 434,000, a 5.1% increase over the prior month.

The increase follows news of an increase builder sentiment. Economists called the jump in new single-family-home starts a positive sign, as the nation's beleaguered real estate market was at least showing life.

"This was a good report," Patrick Newport, U.S. economist with IHS Global Insight, wrote in a note Thursday. "It has supporting evidence that the single-family market is finally getting off the mat and that the multi-family segment is continuing to make small strides, and that we should expect good housing starts numbers the rest of this year."

Overall housing starts -- including the volatile apartment building sector -- fell in October 0.3% over the prior month, to a seasonally adjusted annual rate of 628,000. The decline was attributed to a drop in apartment building construction.

The West was the only region that did not see an increase, falling 16.5%. Starts were up 17.2% in the Northeast, 9.7% in the Midwest and 1.6% in the South.

Another measure of housing activity considered less volatile than starts, permits issued, also showed new building gaining ground last month. New permits in October were at a seasonally adjusted annual rate of 653,000, 10.9% above September and 17.7% above October 2010.

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Photo:  Suburban homes under construction in Rancho Cucamonga. Credit: Getty Images

 

New home construction surges in September; recovery still elusive

New residential construction surged 15% in September, turning in its best performance in 17 months, though economists warned that a housing recovery has yet to take hold.

While new construction is key to getting the economy going, much of the new building came from the apartment sector, which can be very volatile. Many economists also noted that permits pulled for new construction, also an important measure of builders’ plans for the future, declined in September.

Nevertheless, the news of the increase cheered investors on Wall Street as well as several housing analysts who follow the numbers closely.

“A strong residential construction number is a welcome relief for an economy struggling to hang on to expansion and a hopeful harbinger of better days to come,” Celia Chen, a housing economist with Moody’s Analytics, wrote in a research note Wednesday morning. “Caution, however, needs to be taken in interpreting the surprisingly strong top-line housing starts for September.”

Builders started new residential units at a seasonally adjusted annual rate of 658,000 in September, a 15% increase over the prior month and up 10.2% from the same month the year before, according to the U.S. Commerce Department.

Single-family homes were built at a rate of 425,000 units, which is only 1.7% above a revised August estimate, meaning the bulk of the increase came from the building of structures with five or more units.

News of the increase in new home starts came one day after builder confidence in the market rose, according to a closely watched index that measures builder sentiment. The National Assn. of Home Builders/Wells Fargo Housing Market Index jumped by four points to 18 in what was the biggest one-month gain since April 2010, when a tax credit for buyers was fueling purchases. Sentiment remains pretty dismal, however, as a number above 50 indicates more builders view conditions as good than poor.

“A stagnant economy and labor market has meant that housing recovery over the past year has been painfully slow, but we do believe that housing is gradually healing and recovering,” Nishu Sood, a home-building analyst with Deutsche Bank, wrote in a research note Wednesday.

Despite that cautious optimism, economists also pointed to the housing permits number released Tuesday by the Commerce Department, which signaled a more mixed picture for housing. New residential building permits were issued at a seasonally adjusted annual rate of 594,000 units, which is 5.0% below the revised August rate, though still up 5.7% from September 2010.

“We would warn against getting too excited as the fundamental picture has not changed; household formation is still too low and the excess supply is still too high to warrant a major rise in home building,” read part of an analysis by Capital Economics.

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Photo: Homes under construction in Southern California. Credit: Getty Images

Barry Minkow heads back to prison

Barry Minkow's twisting road through life will carry the former San Fernando Valley teen tycoon back to prison Wednesday to serve his second sentence for securities fraud.

In an email to The Times, Minkow said federal prison authorities had ordered him to begin his five-year sentence at a Lexington, Ky., facility that "from the outside looks like Leavenworth Penitentiary" rather than the minimum-security prison camp he had hoped for and a judge had recommended.

Minkow burst onto the national stage in the 1980s after starting ZZZZ Best, a carpet-cleaning company, in his parents' garage in Reseda. He wound up spending more than seven years in prison after it was revealed that ZZZZ Best was a sham built on credit-card fraud and fabricated work orders.

Expressing remorse, he reinvented himself as head pastor at San Diego's Community Bible Church and founded the Fraud Discovery Institute, a detective shop that set out to expose Ponzi schemes and corporate wrongdoing.

But in March he pleaded guilty to one count of conspiring to damage Lennar Corp. by attacking the Miami-based home builder in reports he acknowledged were filled with falsehoods. He had been hired by a San Diego County developer whose partnership with Lennar in Rancho Santa Fe had soured.

Minkow told U.S. District Judge Patricia Seitz in Miami that he had become addicted to narcotic painkillers he used to treat his migraine headaches, finally kicking the habit when he realized he was under criminal investigation.

He also told the judge that abusing steroids as a teenage weight lifter had rendered him unable to produce sperm or testosterone, saying he needs constant treatments to limit his body's production of the female hormone estrogen.

Seitz granted his request to be placed in a prison program for treating addiction. She also recommended that Minkow be placed in a work camp at Maxwell Air Force Base in Alabama, but the federal Bureau of Prisons decided camp wasn't appropriate.

"The Feds found a way to be a bit punitive and put me in an 'administrative medical facility' which houses inmates of all levels," Minkow said in his email.

His attorney, Alvin Entin, said the decision was made because of "mental issues" as well as Minkow's "physical problems." 

In any case, Minkow said, "I deserve it and will be fine."

He noted that the prison is much nearer to the small town in Tennessee where he has lived recently with his wife and two adopted sons.

"Lisa and the boys will have a much easier time driving three and a half hours rather than eight hours to Maxwell," Minkow said.

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Photo: Barry Minkow in his church office, 2009. Credit: Bloomberg / Sandy Huffaker

Southern California home sales and prices fall again in July

Home sales in Southern California fell to their lowest level for a July in four years -- though the decline from a year earlier was the smallest in 13 months. The median price was down 4% to $283,000.

The drop in sales from June was more pronounced, especially for houses that cost more than $500,000, as the job market sputtered, economic uncertainty intensified and some potential homebuyers got cold feet, real estate information service Dataquick said.

A total of 18,090 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in July. That was down 11.9% from 20,532 in June and down 4.5% from 18,946 in July 2010, according to San Diego-based DataQuick.

“The latest sales figures look a bit worse than they really are, given this July was a fairly short month, but they still suggest some potential homebuyers got spooked,” said John Walsh, DataQuick president. “Reports on the economy became increasingly downbeat and, no doubt, some people fretted over the possibility the country would default on its obligations.”

Prices also continued to slide. The median, the point at which half the homes sold for more and half for less, has declined year-over-year for the past five months. It has been unchanged or lower than a year earlier each month since last December, when it posted a 0.3% annual increase.

“If there’s a shred of good news in the data it’s that last month’s sales weren’t much worse than a year earlier,” Walsh said. "For the first time in many months, we get an apples-to-apples comparison to year-ago sales, given that in July 2010 the market lost its crutch -- federal homebuyer tax credits.”

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Photo: Homes under construction in Southern California. Credit: Getty Images