Housing in Los Angeles remains at a premium and rent prices keeps rising. Over the last year, the L.A. area reported the third highest rent price increase in the nation, according to a new report.
Average rents prices increased 6.6 percent to $2,461 per month, according to Yardi Rent Café numbers, reported by Globe Street. That growth in the region was helped along by rapidly rising rents in some submarkets, including Lancaster and Santa Clarita, both north of the San Fernando Valley.
Renters are chasing affordability. Those cities have 20 percent more renters than were reported in 2011, and in Lancaster’s case, rents are still about half the L.A. average. Santa Clarita, meanwhile, saw the top multifamily sale of the year when IMT Capital paid $167 million for an apartment complex there in September.
Low housing inventory overall also pushed prices higher.
Metro L.A. saw a 23 percent drop in the number of units projected to be completed in 2018, according to Yardi’s Adrian Rosenberg. Occupancy is around 96.7 percent, and inventory is down 14 percent compared to the same time in 2017.
But low unemployment and relatively strong wage growth also pushed up rents. Sectors including professional and business services, and hospitality grew by more than 3 percent year over year. In the tech sector, major companies have flocked to L.A. to escape the high commercial rent prices in other established tech hubs. The workforce has followed.
Tech industry employment in L.A. grew by 14.7 percent from January 2016 to December 2016. That increase has added 10,200 new high-tech jobs.
Rent price growth slowed in some major markets across the country in 2019, but in L.A. it remained high through the summer.
That slowed a bit in the fall in L.A. as new inventory came online, but the market could tighten again as the pace of building slows, experts said. [GlobeSt] — Dennis Lynch