Los Angeles-area rents, already among the nation's highest, jumped by 7 percent in 2005, and a similar bump this year is expected to push the average monthly rent to more than $1,500, according to a recent University of Southern California forecast.
The run-up in rent is fueled by high demand for apartments and few vacancies. About 97 percent of the region's apartments are currently occupied. Additionally, an increasing number of apartments are being converted to condominiums, further reducing the number of rentals available.
“The supply of apartments now is really tight. Demand is still so strong and people have to find a place to live,” said Delores Conway, director of the Casden Real Estate Economic Forecast at USC's Lusk Center for Real Estate.
As an example, she used the hot market last summer when USC students were on the hunt for affordable rentals.
“All the students were arriving and they were having a hard time finding apartments because they would go there, and if they didn't take (the unit) right away, it was gone.”
Apartment building owner and manager Christopher Spencer doesn't need a study to tell him demand – and rents – are up. The real estate investor recently listed an Encino studio apartment for $995 and received 51 inquiries. The interest allows him to be “super picky” about his tenants. If someone shows up late for an appointment to view the unit or is not polite during the visit, he or she is disqualified. Bad credit or past eviction? Also disqualified. Sometimes, Spencer said, he'll allow prospective renters to bid on a unit. “A lot of times I'll get a higher offer than I asked, if the unit is really clean or in a good location,” he said.