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

TRD 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
LA promo

Coming Soon: The Real Deal Los Angeles’ Winter 2020 issue!

Governor Gavin Newsom and a rendering of a planned project in Koreatown

Average Los Angeles rent jumped 65% over past decade

From left, clockwise: Daydream Apartments’ Griffin and Grace on Spring, Douglas Emmett’s The Glendon at Westwood and Carlyle Group’s Sofia Los Angeles

Here are LA’s 5 biggest multifamily sales of 2019

Relevant Group’s Richard Heyman and the project site (Credit: Google Maps)

Relevant Group plans 87-unit apartment complex in South LA

A rendering of the project

Developer files plans to build 87-unit apartment complex in Pico Union

From left: Howard Schwimmer and Michael S. Frankel, with 1601 W. Mission Boulevard and 2757 E. Del Amo Boulevard (Credit: Google Maps)

Rexford Industrial adds to LA portfolio with $100M in acquisitions

Andrew McDonald and At Mateo in the Arts District

Cushman’s West Coast chief talks expansion, DTLA market, the death of the starving baby broker & more

3339 Exposition Blvd. and Asher Luzzatto

Luzzatto Co. assembling creative office hub in West Adams

arrow_forward_ios
Loading...