Apartment rental prices in Los Angeles are expected to rise over 8% over the next two years, according to a study conducted by USC’s Lusk Center for Real Estate. The study estimates that rent prices will increase 8.2% in Los Angeles County by mid-2016, at an average of $1,856 a month.
It’s worse in Orange County, where the estimate projects an 8.6% rise with an average price of $1,806, and even worse in the Inland Empire, with a 9.9% jump and an average rental price of $1,246 a month.
Rental prices had grown roughly 3% to 4% clip in the last 12 months, according to the Los Angeles Times. Despite the price climb in rental prices, vacancy rates are estimated to drop because more apartment buildings are opening.
Real estate website Zillow asserted in August that Los Angeles and Orange Counties are the least affordable rental markets in the nation.
Richard Green, who directs the Lusk Center, pointed out, “Though the economy and employment have improved, renters’ incomes are stagnant. So while net absorption and occupancy rates are moving in the right direction, affordability continues to worsen.”
The Lusk Center study showed a wide variance among rents in the Southern California region. Santa Monica’s average rent was $2,618 per month; Newport Beach, South Irvine, Downtown Los Angeles, and Hollywood averaged $2,000 per month, while the Antelope Valley and much of the Inland Empire averaged under $1,000 a month.
But areas in which rents were high evidenced significant growth last year: Palms and Mar Vista, near Santa Monica, rose 11.1%, and apartment rental prices in Newport Beach, South Irvine, and Corona also increased.