LOS ANGELES—As of October, condominium prices in the downtown market have appreciated 13% year-over-year, bringing the new pricing index to $701 per square foot, according to the Mark Co.'s latest monthly trend sheet. More over, the Mark Co. found that prices appreciated 1% month-over-month, from September to October.

“This is a pretty sizable increase, and it can really be attributed to the fact that downtown L.A. is a very viable place to live, and people want to live in a downtown area,” Alan Mark, the Mark Co. president, tells GlobeSt.com. “Another reason is that there is a real lack of inventory in that market. There really hasn't been anything new built since before the recession, except for the second part of Barker Block, which is pretty small.”

Prices are appreciating faster for new or recently developed properties, but Mark notes that has a lot to do with the limited supply. There are currently only 312 new condominium units available in the downtown market, which is 15-times higher than it was a year ago. Although downtown development is heavy, the majority of the units under construction are for-rent apartments, not condominiums. New units are also garnering a higher price tag because of the quality amenities, like fitness centers, pools and rooftop lounges, inside the building.  “People want something that is relatively new, and amenities are important. At the same time, when you look at the loft buildings, some do have amenities and some don't, and that is because many people see Downtown L.A. as an amenity.”

While inventory is relatively low, resale condominiums in the market have a current 2.8-month sale pace. When looking at the resale condominiums category alone, sales were actually down 6% month-over-month; however, year-over-year prices are appreciating, up about 6% from the same time last year. These properties are garnering an average of $504 per square foot, significantly lower than condo sales for newer properties. At month's end, there were 105 resale condominium listings and 29 pending sales.

The Mark Co.'s pricing index is based on 10^th floor, 1,000-square-foot condominiums. The company pulls data from recent sales and tracks new construction for inventory changes. “We normally forecast anywhere from 5% to 7%, but we are really seeing double that and I expect to see double digit increases a year from now as well. Again because there is just such limited product being offered, and not much new product will be landing in the marketplace.”