Southern California rents, $2,400 and climbing, surge amid booming apartment demand

Apartments along Reseda Blvd for rent or lease in Reseda, CA. on August 4, 2022. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

Rent across Southern California continued its upward surge as tenants struggle to find a home amid the tightest market in at least two decades.

While vacancies eased slightly in the spring quarter, availability rates remain among the lowest in data dating to the year 2000.

“In many of the SoCal markets, there has been a longstanding challenge in delivering new housing,” said real estate economist Carl Whitaker, research director for Dallas-based rental market tracker RealPage. “The lack of supply relative to local housing demand means limited vacancy.”

Vacancy rates this spring ranged from 2.5% in Orange County to 2.7% in the Inland Empire and 3.2% in L.A. County, according to a Southern California News Group composite of three leading apartment indexes — RealPage, CoStar and Moody’s Analytics-Reis. That’s up slightly from last winter, but it’s still well below the region’s average of 4-5% during the decade preceding the pandemic.

Eviction bans and rental assistance programs are among the reasons vacancies are low since those programs helped thousands of tenants keep their homes during the pandemic. Further boosting rental demand, more millennials are moving out on their own, and would-be homebuyers who got priced out of the for-sale market are continuing to rent.

As a result, nearly every apartment index shows rent is soaring by double digits.

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Orange County’s average rent for a vacant unit jumped 18.5% from the spring of 2021, hitting a record-high average of $2,570 per month, the composite index shows. That’s up $400 a month from the year before — and it’s more than $1,000 higher than 2010’s average rent.

Inland Empire rents were rising almost as fast, climbing 16.4% year over year to a record-high average of $2,002 – breaking the $2,000 per month barrier for the first time in Riverside and San Bernardino counties. Inland Empire rents jumped by more than $650 a month over the past five years.

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Los Angeles County rents continued to rebound from pandemic-era rent drops, rising 14.1% last quarter to a record-high of $2,407 — up almost $300 a month from the year before.

L.A. County numbers were mixed. CoStar figures showed L.A. County’s rent growth down from the previous quarter, while RealPage and Moody’s both showed rent growth was up.

The rental market has been on fire since the summer of 2021, when vacancies plummeted and rents began rising by double-digits. Economists said most rentals were essentially full, while some tenants said they were offering to pay a year’s rent upfront or were offering to pay more than landlords were asking.

“There was a massive amount of pent-up demand that released in 2021,” RealPage’s Whitaker said. “Put another way, think of the demand that never happened in 2020, essentially resulting in two years’ worth of demand happening in a short summer window.”

For rent signs like this one can be deceptive since landlords sometimes fail to take down signs or remove vacant listings from websites after a unit gets filled. With vacancies low, some tenants have resorted to offering a full …read more

Source:: Los Angeles Daily News

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