Vacancies are up in LA’s multifamily market
Rents rise to highest level on record
The market for multifamily housing in Los Angeles County remained at record levels over the first quarter this year.
But after the county added nearly 3,300 units to the inventory the first three months of the year, the vacancy rate inched up to 3.8 percent, a new report from NAI Capital found.
Landlords have benefited from the historic demand as rents rose to the highest level on record. Average asking rent was $1,861 per unit, up 0.6 percent from the previous quarter, and a 2.7-percent jump since the same period last year, according to Yardi Rent Café.
Market conditions in Los Angeles County have changed dramatically the past year as both investors and developers paused in the face of rising interest rates and construction costs. But NAI Capital reported that the average asking price per unit increased 15.1 percent from the final quarter of 2018, to $258,033.
There are currently 25,627 units under construction and approximately 112,727 units proposed to be built by 2024. However, in the first quarter of 2019, new construction starts fell to a six-year low due to high construction costs, the report found.
These factors indicate that the Los Angeles multifamily housing market is expected to level off in 2019, but it will remain strong as housing demand far outweighs supply, NAI’s report concluded.