Southern California's red-hot rental market cooled down a bit at the end of 2014 as more new apartment buildings opened.
Rents in Los Angeles County climbed a relatively modest 2.5% in the fourth quarter, compared with the same time a year earlier, according to new figures out Tuesday from real estate data firm Reis Inc. The average apartment now rents for $1,493. In Orange County, rents were up 3.1%, to an average of $1,647.
While the Southland remains among the costliest rental markets in the country, the pace of rent hikes here and elsewhere have slowed as developers have completed more apartment buildings in recent months. Similar trends are playing out across much of the country, and rent growth slowed down in the fourth quarter to 0.6% nationally.
Market analysts expect growing demand, particularly from young adults, to easily fill those units -- and, indeed, L.A.'s vacancy rate ticked down to 3.1% in the quarter -- but the new supply should help keep prices in check, said Reis senior economist Ryan Servino.
"Rent growth will moderate in the coming years," he said. "Although it will still be positive, it will not be able to sustain the 3.5% or so pace of growth that occurred in 2014."