Los Angeles County apartment rents increased at a slower pace in the third quarter, although that's not much relief for tenants now paying, on average, nearly 6% more than they did before the recession.
The average apartment rent in the three-month period ended Sept. 30 reached $1,688 a month, a 2.6% increase from the same period last year, according to a new report from Marcus & Millichap. In the third quarter of 2012, rents climbed 4.4%.
Developers are in the midst of an apartment building boom within the county. That's helped slow rent growth, but not enough to give tenants the upper hand over landlords and send rents down. The commercial real estate brokerage forecasts developers to finish 6,100 units this year, and roughly 9,000 in 2014.
Construction has been particularly robust in an area spanning from Los Angeles' Miracle Mile east through Koreatown and downtown, said Tony Solomon, a vice president with Marcus & Millichap's West L.A. office.
"The cranes are in the sky. The sticks are in the ground," he said.
Vacancy rates remained low in the third quarter amid heavy demand for rental units. A large population of young adults, who tend to prefer renting, has helped persuade developers to ramp up construction in recent years. The L.A. County vacancy rate was 3.6% last quarter, down from 3.7% in the second quarter.
Rents — which are now 5.9% higher than their pre-recession peak — will keep climbing, but there are other head winds for landlords in addition to new supply, Solomon said.
"Rent growth has probably got out front of the general economy and general inflation," he said.
Those looking for an affordable apartment would be best to search in the Antelope Valley or the East Los Angeles market. Average rents in the high desert were $816 last quarter, while in East L.A. rents averaged $1,195, Marcus & Millichap said.
The most expensive market was the Santa Monica-Marina del Rey area, where average rents hit $2,690 in the third quarter. Next was the Brentwood, Westwood and Beverly Hills market, with rents of $2,587.