Annette Haddad
One reason local apartment owners rarely see vacancies is because there are relatively few new apartment complexes being built. A recent study by USC's Lusk Center for Real Estatecolor> found that in Los Angeles County, for example, the number of apartment units is about 1 million. The total inventory has been growing at less than 1% a year for the last five years.
There is a growing number of apartment units coming off the market as they are converted into for-sale housing in the form of condominiums.
Over the last year, condo conversions have escalated, Cox said. According to RealFacts, about 110 large apartment buildings in the West were transformed into condo complexes last year, the majority of which were in Southern California.
The burgeoning trend of conversions stems largely from the region's hot real estate market. Rising home prices have forced many prospective buyers to turn to more affordable options, such as condominiums and town houses.
But lately, condo prices have been appreciating in some areas as fast as those of single-family homes. As of March, the median price for condo resales rose 18.5% to $371,000 in Southern California, while the median price for single-family homes increased 19.4% to $455,000, according to DataQuick Information Systems.
The growing gap between affordability and prices "will limit many new residents to the rental market, allowing apartment owners to continue raising rents in 2005" around the Southland, according to a report by Marcus & Millichap Real Estate Investment Brokerage Co.