USC: rents to rise in SoCal through 2023, metro centers to join suburbs on hikes
Pandemic trend of stagnation, declines in parts of region poised for reversal
The post-pandemic days of falling rents and free months are dwindling, says a recent University of Southern California study.
The 2021 USC Casden Economics Forecast projects rents will rise by triple digit dollar amounts on a monthly basis over the next two years across Southern California, according to the Commercial Observer.
The study predicts average total rent in Los Angeles County to rise by $252 to $2,325 by the end of the third quarter of 2023. Ventura County could see a $310 increase during that period, and Orange County a $410 hike.
USC projects a $241 increase in the Inland Empire to $2,068. The two- county area – comprising the San Bernardino and Riverside markets – recorded the highest rent hikes in the nation in the first quarter, but would remain the most affordable market in the region if USC’s projections pan out.
The pandemic prompted some urban renters to seek larger apartments and less crowded areas outside metro centers. Rents stagnated and even fell in some parts of urban L.A. County, while rent growth accelerated in suburban markets as vacancies tightened.
USC earlier this year forecasted that trend would continue through 2021 and now similarly forecasts a continuation through 2023.
Richard Green, the director of the USC Lusk Center for Real Estate and a co-author of the Casden Economics Forecast, said that vacancies are again falling in urban areas, but that “the outskirts remain low and will see rents go up at a much higher rate than the cities.”
“The question now becomes whether this historic move from the cities to the outskirts will remain permanent or return to pre-pandemic levels,” he said. “This will have an impact on the entire region should multifamily construction ramp up.”
Rent hikes could be problematic for renters who still owe their landlords back rent. As of this spring, L.A. renters collectively owed their landlords an estimated $3 billion in back rent, although the state’s rental assistance program has likely erased a chunk of that.
[CO] — Dennis Lynch