Rents in Southern California will climb faster in next two years, study says
A new study forecasts that rent in Southern California will get more expensive over the next two years.
Renters, get ready to pay a little more.
The cost of the average apartment in the Southland is projected to grow more than 8% over the next two years, according to a report out Tuesday.
A new study from USC’s Lusk Center for Real Estate projects that rents will climb 8.2% in Los Angeles County by mid-2016, to $1,856 a month, on average. In Orange County, the prediction is 8.6% growth, to $1,806. And in the Inland Empire, the study forecasts 9.9% rent growth to $1,246 a month.
If those forecasts pan out, rents would grow over the next two years faster than the 3% to 4% clip seen in the last 12 months. Vacancy rates are expected to decline a bit even as more new apartment buildings open.
The study is just the latest to reflect a growing housing affordability crisis, sparked by rising rents, sluggish incomes and relatively tight supply. By some measures, L.A. is the least affordable rental market in the country.
“Though the economy and employment have improved, renters’ incomes are stagnant,” said Richard Green, who directs the Lusk Center. “So while net absorption and occupancy rates are moving in the right direction, affordability continues to worsen.”
The study – which monitors 52 submarkets across Southern California – also reflects great variations within the vast region.
Rents were highest in Santa Monica, where a tech-sector boom has pushed the average rent to $2,618. Newport Beach, South Irvine, Downtown Los Angeles and Hollywood all also topped the $2,000-a-month mark. The Antelope Valley and a number of submarkets in the Inland Empire remain below $1,000 a month.
And there’s some evidence that high-rent hotspots are spilling over into neighboring areas. Rents soared 11.1% last year in Palms and Mar Vista, next door to Santa Monica. Other pockets of growth included Newport Beach, South Irvine and Corona.
Keep an eye on housing and real estate in Southern California. Follow me on Twitter at @bytimlogan