Condo buyers are in the driver's seat

"With fewer new condos being built, there will be a drought at some point," said Elaine Golden-Gealer, senior director of the Coldwell-Banker New Homes and Condominium Division for Los Angeles. "The biggest selection is now, and in the next six months to a year. Once those units are sold, the builders will wait until the economy gets better to build again."

Construction has practically come to a stop in Southern California as builders feeling the pinch of a down economy and a slow housing market are pulling the plug on projects, converting condos to rentals and lowering the prices on finished units to get rid of inventory.

Housing analysts say that it takes three to four years for a developer to complete a condo project and that the condo building slowdown actually started in mid-2005.

"The big guys like Horton, Centex and Lennar closed the doors to new projects by early 2007, and most got out alive," said Alan Nevin, director of economic research for MarketPointe Realty Advisors in San Diego. "They finished up phases of projects but have not been willing to go forward with future projects."

For example, work was supposed to have started last year on one of the largest planned condo developments in the Los Angeles area -- 2,600 units in the Grand Avenue project downtown -- but it's been put on hold, Nevin said. "Related Cos. hasn't been able to assemble the financing, so they're uncommitted as to when they'll start now," he said.

"In the Valley, everything's come to a grinding halt," Nevin said. "If you go to North Hollywood, there were 20 condominium projects for sale last year, and most sold. If they didn't, the developer sold some units and held the rest for rentals."

For now, he noted, potential condo buyers are in the driver's seat, with builders offering incentives and reducing prices to move completed units.

Neil and Angela Symes looked for a year before finding a one-bedroom condo, which they bought in June. The couple decided to downsize to one car in November, and because Angela commutes to her job in Long Beach, they needed their home to be within walking distance of Neil's office in Glendale.