LA rent prices keep rising. Blame high demand, low inventory

Average rents prices rose 6.6% to $2,461 a month, according to a Rent Café report

Los Angeles /
Dec.December 28, 2018 10:00 AM
Santa Clarita Valley (Credit: Flickr and iStock)

Housing in Los Angeles remains at a premium and rent prices keeps rising. Over the last year, the L.A. area reported the third highest rent price increase in the nation, according to a new report.

Average rents prices increased 6.6 percent to $2,461 per month, according to Yardi Rent Café numbers, reported by Globe Street. That growth in the region was helped along by rapidly rising rents in some submarkets, including Lancaster and Santa Clarita, both north of the San Fernando Valley.

Renters are chasing affordability. Those cities have 20 percent more renters than were reported in 2011, and in Lancaster’s case, rents are still about half the L.A. average. Santa Clarita, meanwhile, saw the top multifamily sale of the year when IMT Capital paid $167 million for an apartment complex there in September.

Low housing inventory overall also pushed prices higher.

Metro L.A. saw a 23 percent drop in the number of units projected to be completed in 2018, according to Yardi’s Adrian Rosenberg. Occupancy is around 96.7 percent, and inventory is down 14 percent compared to the same time in 2017.

But low unemployment and relatively strong wage growth also pushed up rents. Sectors including professional and business services, and hospitality grew by more than 3 percent year over year. In the tech sector, major companies have flocked to L.A. to escape the high commercial rent prices in other established tech hubs. The workforce has followed.

Tech industry employment in L.A. grew by 14.7 percent from January 2016 to December 2016. That increase has added 10,200 new high-tech jobs.

Rent price growth slowed in some major markets across the country in 2019, but in L.A. it remained high through the summer.

That slowed a bit in the fall in L.A. as new inventory came online, but the market could tighten again as the pace of building slows, experts said. [GlobeSt] — Dennis Lynch 


Related Articles

arrow_forward_ios
Renderings of One Beverly Hills and Beny Alagem. (One Beverly Hills, Getty)
Beny Alagem’s $2B Beverly Hills project gets go-ahead
Beny Alagem’s $2B Beverly Hills project gets go-ahead
The San Pedro Fish Market is one of the top-grossing restaurants in the U.S. (Getty, Facebook via San Pedro Fish Market and Restaurant / Photo Illustration by Alison Bushor for The Real Deal)
San Pedro Fish Market plans new “supersize” restaurant
San Pedro Fish Market plans new “supersize” restaurant
The Chateau Marmont (Getty) and protest signs (Unite Here Local 11)
Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
Small Business Administration administrator Isabel Guzman (Getty, iStock)
Starved for relief: Restaurants seek $76B, far more than budgeted
Starved for relief: Restaurants seek $76B, far more than budgeted
Goodman CEO Greg Goodman and a rendering of the facility. (Goodman)
Goodman’s massive logistics center will target e-commerce tenants
Goodman’s massive logistics center will target e-commerce tenants
California is waiting to adopt the CDC maskless decision. (Getty)
California still says mask up at office, for now
California still says mask up at office, for now
PocketList shuttered after having formally launched in L.A. last July. (Getty, PocketList)
Spencer Rascoff-backed rental listing platform shuts down
Spencer Rascoff-backed rental listing platform shuts down
(iStock)
Rent prices will keep rising in suburbs: USC report
Rent prices will keep rising in suburbs: USC report
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...