Rent has been steadily rising in Los Angeles County since the Great Recession. In the last year alone, apartment prices have risen by 2.6 percent to an average of $1,688 a month across the county.
This increase has been driven in part by young adults looking to move away from home, the Los Angeles Times reported. But the difficulties inherent in home buying are also playing a factor, according to Dr. Richard Green, director of the Lusk Center for Real Estate at USC, who said that many people are being forced to rent.
“People can’t buy houses because it’s harder to get mortgages,” said Dr. Green. “We have a lot of twenty-somethings out there, and you don’t have supply.”
Santa Monica and Marina del Rey have the most expensive rents in the county, averaging $2,690, followed by Brentwood, Westwood and Beverly Hills where $2,587 is the standard monthly tab. The cheapest markets are East Los Angeles ($1,195 ) and Antelope Valley, where the rental average was $816. (LA Times)
Yet people aren’t shying away from Southern California. They’re likely coming from further and further away.
“I still think people are going to move here, if not from other parts of the US, from other countries,” said Dr. Green. “And maybe increasingly China instead of Mexico, and when you put that together there’s real rent risk from the standpoint of a tenant.”
The hefty demand has spurred an increase in construction. Real estate brokerage firm Marcus and Millichap forecasted 15,100 rental units to be finished by the end of 2014. Though the new apartments should help increase the vacancy rate in Los Angeles, which currently sits at a low 3.6%, it may not be enough to ease the strain on your wallet. A “natural vacancy rate” is typically between six and seven percent in a healthy market.
On Which Way, L.A.? last week, Warren spoke to realtors and reporters about the steady climb in rents. Are institutional investors helping to drive up prices? And what are the unintended consequences in the affected communities? Listen below: