Southern California residential rents are likely to rise for two years as home prices climb and apartments remain in short supply, according to a study by the University of Southern California’s Lusk Center for Real Estate and the state’s Realtors group.
In Los Angeles County, rents climbed to an average of $1,435 a month in the second quarter, up 2.9 percent from a year earlier, according to the 2013 USC Casden Multifamily Forecast, released today. That was the biggest jump in the four major Southern California markets, said the Lusk Center and the California Association of Realtors, which coauthored the study.
While rents are rising in the region, the increase in home prices is outpacing them. The median price paid for all new and resale houses and condominiums sold last month in Southern California was $385,000, up 25 percent from a year earlier, according to San Diego-based DataQuick. The median price, unchanged for three months, is the highest since April 2008, the research firm said.
“Despite marked improvements in employment and the overall economy, the rapid increase in home priciest and interest rates are pricing first-time home buyers out of the local market,”Richard Green, director of the USC Lusk Center, said in a statement today. “As more and more of these households become renters instead of buyers, we will continue to see fewer vacancies and higher rents.”
A shortage of apartments also has a contributed to rising rents. In Los Angeles, Orange and San Diego counties and the Inland Empire, about 6,700 new apartment units were completed in the year through June 30, while 11,900 units were rented in the same period, the study showed.
Rents in Orange County, the area’s pricest rental market, rose 2.8 percent to an average of $1,572, followed by San Diego County with a 2.8 percent gain to $1,388 and the Inland Empirewith a 1.9 percent increase to $1,059, the study showed.
The Casden Multifamily Forecast in April 2012 also predicted two years of residential rent increases in Southern California.