Los Angeles Area Apartment Rents Will Likely Rise, Study Says

Daniel Taub Los Angeles-area apartment rents will probably rise this year as demand from new arrivals to the region outpaces the supply of lodging, according to a study by the University of Southern California Lusk Center for Real Estate. Rent increases will probably average 3.5 percent to almost 6 percent this year, according to the center's Casden Real Estate Economics Forecast released today. The average rental rate in 2005 for a two-bedroom apartment will probably rise to $1,500 from $1,455 in Los Angeles County; to $1,520 from $1,467 in Orange County; and to $1,080 from $1,024 in the Inland Empire, the study said. ``Apartment occupancies are at all-time highs in Los Angeles, Orange, Riverside and San Bernardino counties because of a steady stream of young professionals and Latin and Asian immigrants who cannot afford the average home,'' Delores Conway, director of the report, said in a statement. Demand also is coming from ``relocated executives who choose not to get locked into a mortgage,'' Conway said. Los Angeles and Orange counties are among the most expensive housing markets in the U.S., along with San Francisco, Honolulu, New York, San Diego and Boston, according to the National Association of Realtors. The average home price in Orange County rose to $628,000 at the end of 2004, making the premium to buy rather than rent higher than in almost any other U.S. metropolitan area, according to the Casden report. The Casden Forecast analyzes apartment transactions, new building permits, leasing activity and employment data to produce forecasts for rent and occupancy levels, the center said.