L.A. County Rents Shoot Above $1,000
The average monthly rent for an apartment in Los Angeles County pushed above $1,000 in the third quarter for the first time ever, rising 7.8% from a year ago to a record $1,012, according to a study released Friday.
The county’s increase was the biggest among five Southern California counties, according to RealFacts, a Novato real estate research firm, and reflected the continued pressure that the region’s booming economy is placing on the housing market, as the number of new jobs continues to outpace the number of units being built.
The county’s occupancy rate rose to a record 97.4%, from 96.8% a year ago, meaning that many landlords found new tenants before an opening occurred, the survey showed.
The trend is not likely to change any time soon.
“Renters should expect to see rent increases, anywhere from 3% to 8%,” said Stephen Stein, a regional manager at Marcus & Millichap Inc., a San Francisco-based real estate consulting firm. “It’s a reflection of the economy.
In Orange County, which cracked the $1,000-a-month level in the second quarter, rents rose 7.3% in the three months ended Sept. 30, to an average of $1,026 a month.
RealFacts surveyed 414 apartment complexes in Los Angeles County that contained at least 90 units each, for a total of 95,350 units. That’s less than 20% of the apartments in the county. But increases among higher-priced apartments tend to pull up rents in the rest of the market.
Santa Monica had the county’s highest average rent, at $3,053 a month. That was based on four complexes with an average of 171 units each. Wilmington had the county’s lowest average monthly rent, at $500, based on one complex with 184 units.
Stein said that while landlords are enjoying a booming market, many endured several years of little or no rent increases in the early and mid-1990s.
“Landlords are experiencing some higher costs and moving rents because they’ve had to keep them low so long,” Stein said. “This is simply part of their recovery.”
Rental housing historically has been the bridge that leads to homeownership, but as rents consume increasingly larger portions of take-home pay, consumers are finding it more difficult to save enough money to buy a home.
Home prices, meanwhile, have climbed to record levels throughout much of the region over the last year. That has doused ownership dreams for many and given landlords leeway to raise rents without losing tenants.
But rising costs come at a time when housing needs have soared. Los Angeles and Orange counties ranked among the top five markets nationwide in terms of housing demand, but construction in both markets remains limited, according to one recent survey.
While multifamily construction has grown in Los Angeles, to 4,800 units last year, that pales in comparison to 1986, when the county added a record 53,000 units.
In the rest of the Southland, rents in Ventura County rose 7.3% from a year ago, to an average of $954 a month; in Riverside County, by 6.6%, to $692 a month; and in San Bernardino County, by 7.3%, to $724 a month.
