DALLAS (AXIOMETRICS) – Annual effective rent growth in the Los Angeles apartment market reached a record level at 6.4% in July 2015, according to Axiometrics, the leader in apartment and student housing research and analysis.
That means renters are paying much more than they were a year ago. The average apartment in the Los Angeles-Long Beach-Glendale Metropolitan Division cost $2,138 per month in July, $130 more than the $2,008 average rent in July 2014.
“LA rent growth was the highest it has been since Axiometrics began monthly reporting of annual effective rent growth in April 2009,” said Stephanie McCleskey, Axiometrics Vice President of Research. “Job growth was 2.5% in June, above the national average, and new supply is moderate, so there is no risk of oversupply with all the jobs being added (116,500 in the 12 months ended June 2015.”
Some 2,997 new units were delivered in the first half of 2015, with 4,416 more identified for delivery in the second half of this year. Construction is expected to boom next year, with 10,730 units expected to come to market.
“Because Southern California emerged from the recession more slowly than did other areas of the country, the aparment market is still playing catch-up in terms of new construction,” McCleskey said. “However, Axiometrics’ Supply/Demand Model shows supply overtaking demand this quarter, so rent growth may start to moderate.”
Some other highlights from the Los Angeles metro division:
- Annual effective rent growth in July ticked up 15 basis points (bps) from June’s 6.3%. The July rate was 154 bps higher than the 4.9% recorded in July 2014.
- The LA metro’s occupancy rate of 95.9% was a 5-bps decrease from June and a 3-bps decrease from July 2014.
The annual effective rent growth rate declined in the other three LA-Area metros, while the occupancy rate declined in the entire area:
- The Riverside-San Bernardino-Ontario MSA’s rent growth continued to moderate, though its 7.2% rate in July was the highest in the area. Rent growth decreased 40 bps from June’s 7.6% but represented a 171-bps rise from the 5.4% of July 2014. Inland Empire occupancy was 95.1%, 63 bps lower than June and 66 bps lower than July 2014.
- Inland Empire average rents are still the lowest in the LA area: $1,370 in July. That monthly figure represents a $91 increase from the $1,278 of July 2014.
- The Oxnard-Thousand Oaks-Ventura Metropolitan Statistical Area (MSA) still sported the highest occupancy rate (96.6%) among the four LA-area metros in July, though occupancy declined from June’s 96.8%, though it increased from the 96.2% of July 2014.
- Oxnard’s annual effective rent growth rate of 7.0% represented an 85-bps decrease from June’s 7.9% but a 19-bps increase from the 6.9% of July 2014.
- Average monthly rent in the Oxnard MSA was $1,897, some $124 more than the $1,773 of June 2014.
- The annual rate of Orange County effective rent growth decreased for the fourth straight month, to 5.0% in July, a 34-bps decline from June’s 5.4%. Still, July’s figure was 190 bps higher than the 3.1% of July 2014.
- The average rent in the Anaheim-Santa Ana-Irvine Metropolitan Division was $1,920, a $92 increase from the $1,828 of July 2014.
- Orange County occupancy was 95.6%, down from the June’s 95.9% and July 2014’s 96.2%.
By Ross Coulter for Axiometrics. Axiometrics’ specialty is monitoring the apartment and student housing markets, providing an in-depth view of volatile market trends. Axiometrics’ granular data-collection methods and enlightening analysis help clients make profitable – and intelligent – decisions. To learn more visit www.axiometrics.com, follow @Axiometrics or on LinkedIn, or call 214-953-2242.