Apartment rents in the greater Los Angeles region are expected to rise by about 12%, based on a University of Southernreal estate economic forecast. With strong population growth and a relatively healthy economy, demand for rental units in the LA area has soared, according to USC’s Lusk Center For Real Estate. Little new construction also will help apartment owners boost rental rates — in Orange County alone, multifamily completions fell to about 2,500 units a quarter in 2002, roughly half the rate of 1999.
"Tenant incomes won’t increase as fast as rents, so some may have to budget more for their rent payments. Apartment market conditions will remain extremely tight across the Los Angeles region well into 2004," says Raphael Bostic, Ph.D., director of the study.
Los Angeles County will hold steady at 95% occupancy through the third quarter of this year, says Bostic, which is considered full occupancy. Exceptions are the west Los Angeles and South Bay submarkets, where rents have been flat as a result of heavy technology and communications reliance.
The forecast analyzedfrom M/PF Research that covered the Los Angeles, Orange and Inland Empire apartment markets.
"Unlike many other apartment markets in the United States, the Los Angeles regional market has not seen significant deterioration in occupancy rates in recent months. This is a dramatic change from the mid-1990’s, when full occupancy was rare," says Bostic.